Stocks Flat for Four Years
The Value Line Geometric Index represents more than 1,600 of the largest stocks in the United States, equally weighted.
The index is basically flat over the past four years, which can explain to investors could feel that their investment accounts haven’t done as well as they would have wished (chart courtesy of www.stockcharts.com).
In my opinion, investors who felt that they were doing well in 2020 and 2021 likely did so by being over exposed to the most expensive sectors of the stock market. In 2022 those investors could have lost more than the stock market averages, as highly valued stocks tend to lose more during a bear market than the broader index.
Likewise investors who were invested in the value category could have felt that their returns were not that good over the past four years due to the highly valued bubble stocks receiving a significant amount of investor attention.
LPL 396894-1
DEFINITIONS
Value Line Geometric Index - The Value Line Composite Index is a stock index containing approximately 1,675 companies from the NYSE, American Stock Exchange, Nasdaq, Toronto, and over-the-counter markets. The Value Line Composite Index has two forms: The Value Line Geometric Composite Index (the original equally weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.)
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