Wauchula State Bank Financial Blog | Managing your Wealth (3)

06/14/22

Small- and Mid- vs. Large-Cap Stocks

As of today, small- and mid-cap stocks on a year-to-date basis are performing better than their large-cap counterparts by 3% and 2%, respectively.

There is an ebb and flow but going all the way back to 1994 small- and mid-cap stocks have outperformed large-cap stocks by an annual 0.66% and 1.49%, respectively. Financial theory supports, and so far this year it is also true, that when you add them to your portfolio they lower your risk due to the additional diversification.

Since this follows our motto of obtaining the “highest returns, for the least amount of risk,” we include small- and mid-cap stocks in all our portfolios.

Chart of the Day, Managing your Wealth

06/13/22

The "Chiclets Chart"

One of our clients calls this the “Chiclets Chart” because of its resemblance to that classic brand of candy-coated chewing gum.

Chart of the Day, Managing your Wealth

06/10/22

Active vs. Passive Funds

Today’s chart from Morningstar shows annual net flows into passive funds (in purple) vs. active funds (in orange), and their dominance for the last 11 years.

Estate Planning, Savings, Managing your Wealth

06/1/22

What’s the Difference Between a Will and a Trust?

Estate planning is an important subject that almost everyone—but especially older people—needs to address. Many believe that estate planning is for those with substantial means. However, estate planning determines how an individual’s assets are preserved, distributed, and managed, so even people with assets limited to a residence, bank accounts, and a retirement plan need to form a plan.

Chart of the Day, Managing your Wealth

04/7/22

Sale and Dividends

There are two ways to make money in stocks:

Chart of the Day, Managing your Wealth

04/5/22

100% of the Time

I think about this chart often during discussions with clients on having too much exposure to single stocks.

Chart of the Day, Managing your Wealth

03/23/22

Bond Length Matters

Duration describes the time it takes for a bond holder to get all their money back and/or the change in price for each 1% change in the interest rate.

Chart of the Day, Managing your Wealth

03/16/22

S&P 500 Wins Again

This chart from an article in today’s Wall Street Journal shows the percentage of funds that underperformed the S&P 500 in the last 12 years. Again, passive indexes beat 85% of the active managers last year, and the majority have done so for 12 consecutive years. This is one of the reasons why we champion passive index funds.

Chart of the Day, Managing your Wealth

03/14/22

Car Dealer Profits

I am reminded of this chart every time I drive by a car lot. Before the pandemic, financing and insurance profits made up 70% of the dealer’s profits. Now, due to price appreciation of their inventory, that percentage has changed. However, the dollar profits from financing and insurance continue to increase. Car dealers have become more like finance and insurance companies.

Chart of the Day, Managing your Wealth

03/12/22

Stay Invested

Below is a great chart from Putnam, which shows that over the last 15 years, if you missed the top 10 best days of market gains, your return would have gone from 10.66% to only 5.05%.

On Our Minds