Tags: Tastiest | Stock | Flavor | Vanilla

Last Year's Tastiest Stock Flavor: Plain Vanilla

By    |   Wednesday, 01 Jan 2014 10:21 PM

The best investment strategy last year was just to buy U.S. stocks and not worry about diversification, The Wall Street Journal reports.

The Standard & Poor's 500 Index generated a total return of 32.1 percent in 2013, and the Russell 2000 Index of small-cap stocks produced a return of 38.7 percent.

As for bonds, the Barclays U.S. Aggregate Bond Index has dipped 1.9 percent this year amid concern about the Federal Reserve tapering its bond purchases.

European stocks, emerging-market stocks and commodities also underperformed major U.S. stock indices.

Editor’s Note: See Sean Hyman Explain His Biblical Money Code for Investing

"People like it when diversification adds to value, but they see diversification has detracted value this year," Edward Painvin, chief investment officer at money-management firm Chase Investment Council in Charlottesville, Va., told The Journal.

Meanwhile, broad stock indices far outperformed hedge funds investing in stocks. The HFRI Equity Hedge Index looks on pace to end the year with an increase just under 14 percent, Ken Heinz, president of Hedge Fund Research, told The Journal.

So simple was better in 2013.

"The more colorful your pie chart, the worse you did," Lawrence Glazer, managing partner at Boston's Mayflower Advisors, told the paper.

Many experts say stocks are due for a correction soon.

"I don’t think the market is overvalued, but will it continue this nice smooth ascent with almost no volatility?" Tobias Levkovich, chief U.S. equity strategist at Citigroup, told Bloomberg. "We will see a more volatile year that might scare off some investors, which might be good. Sentiment is getting way too positive. It’s beyond complacency."

Editor’s Note: See Sean Hyman Explain His Biblical Money Code for Investing

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The best investment strategy last year was just to buy U.S. stocks and not worry about diversification, The Wall Street Journal reports.
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2014-21-01
Wednesday, 01 Jan 2014 10:21 PM
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