2021 was another year much like the last few. Mega Cap Growth stocks dominated with strong
earnings amplified by their stock prices increasing faster than would be justified. In other words, the
stock prices of Mega Cap Growth stocks continue to outperform their underlying values of sales and
earnings. Or more simply, price/sales and price/earnings ratios have increased.
Many other investment sectors, both at home and abroad were left behind. As a result, a diversified
portfolio underperformed the broad U.S. averages highlighted nightly in the news.
But things change. I remain that a diversified, balanced portfolio does not offer the thrill of being in the
right place at the right time, but, over the long run offers a smoother path to reaching one’s goals, with
less dramatic volatility.
Going forward, my chartbooks will focus on individual asset categories and hopefully add greater
understanding of my confidence in a balanced, diversified portfolio.
As always, know what you own, do no overinvest, and stick with quality.
-Cliff Jarvis