2007 Proves Underwhelming for Small Caps and Value Stocks

by James B. Cloonan

2007 Proves Underwhelming 
for Small Caps And Value Stocks Splash image

The underperformance of value stocks and smaller capitalization stocks relative to large-cap growth stocks continues.

That is reflected in the performance of the Model Shadow Stock Portfolio, which is up only 2.0% for most of 2007 (through November 30), compared to 6.1% for the market as a whole, as represented by the Vanguard 500 Index fund (see Figure 1).

However, the Model Shadow Stock Portfolio does continue to outperform both small- and micro-cap indexes (complete data are shown in Table 1). While it seems likely that the portfolio will extend its six-year run of positive returns, it may not match the return of the total stock market for 2007.

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James B. Cloonan is founder and chairman of AAII.


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