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Ten Facts for the New Year


1) Since 1927, value stocks have outperformed growth stocks by 4.1% per year on average.


2) Over the last ten years, growth stocks have outperformed value stocks by almost 10% per year on average.


3) Over all trailing ten-year periods since 1937, growth has outperformed value only 15 times out of 83. Value outperformed the other 68 times.


4) Of all the ten-year periods of growth outperformance over 85 years, 9 of the 15 have occurred in the last twelve years.


5) From December 31, 1995 through the peak in early 2000, the NASDAQ 100 Index was up 973%, compared to 146% for the S&P 500. From peak in March 2000 to trough in September of 2002, the NASDAQ index was down 76%, compared to -45% for the S&P 500. In the same period the Russell 2000 Value was up 5%.


6) In the five years ending December 15, 2021, the NASDAQ index was up 214%, compared to +108% for the S&P 500.


7) On December 29, 1989, the Japanese stock market represented 45% of world stock market capitalization, while the Japanese economy represented 11% of world GDP, a 4:1 ratio. In the 32 years since, Japanese stocks have returned -1.9% per year on average. Today, Japan’s stock market represents only 7.4% of world market cap.


8) On December 31, 2021, the US stock market represented 55.9% of world stock market capitalization, while the US economy represents 15.8% of world GDP, a 3.6:1 ratio.


9) Since 1954, the Fed funds rate has been below 0.5% in only 35 out of 270 quarters. All of those quarters have been since 2009.


10) On December 15, 2021, the Fed indicated they expect to raise interest rates three times in 2022. From that date through the end of January, the NASDAQ was down 8.5% and the S&P 500 Index down 4.1%, but the S&P 500 Value Index was up 0.52%.


As Benjamin Graham once said, “In the short run, the market is a voting machine. In the long run, the market is a weighing machine.”


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