Market Data Bank: 1st Quarter 2001
LARGE VALUE VS.
LARGE GROWTH
Large-growth stocks were hammered again. As stocks skidded into
bear territory, large growth plunged 20.9%. Meanwhile, large-value
stocks suffered much less and suddenly became the three- and five-year
leader.
SMALL VALUE VS.
SMALL GROWTH
While small-cap growth stocks plunged 15.2%, small-value eked out
a 1% gain. With small value up 19.5% in the 12 months ended March
30 versus a 39.8% loss in small growth, the wisdom of diversification
became stark.
THREE BEST AND
WORST SECTORS
Tech stocks continued a free-fall last quarter. They were the worst
performers among the 12 Russell 3000 sector indexes for the third
straight quarter. Only auto stocks showed a gain as the stock market
sell-off broadened.
FOREIGN, US STOCKS
& US BONDS
$1 invested in US stocks on April 1, 2000 plunged in value to $0.78
at the end of March 2001, and $1 in foreign stocks fell in value
to $0.74. Meanwhile, $1 in bonds grew to $1.12, showing the value
of diversification.
LARGE VS. SMALL
STOCK EARNINGS
While this isnt supposed to happen in a slowing economy,
earnings growth on small-caps have continued to strengthen relative
to large-caps. Relatively stronger earnings may have helped small-caps
outperform large stocks.
PRICE-TO-EARNINGS RATIO
For several years, price-to-earnings ratios on small-caps have
been lower than p/es on large-caps. But with small-caps outperforming
large-caps over the past year and offering stronger relative earnings,
the gap narrowed.
Small-cap stocks represented by Russell 2000 index, large-cap stocks
represented by Russell 1000 index. Foreign stocks represented by
the Morgan Stanley Capital Internationals Europe, Australia,
Far East Index, and US bonds by the Lehman Bros. Government/Corporate
Bond Index. P/E ratios exclude negative earnings.
Small-cap stocks tend to be more volatile than large-caps. Bonds
offer a fixed rate of return while stocks will fluctuate. Indices
are unmanaged and do not represent any specific investment. Foreign
investing involves special risks including political unrest, economic
instability and currency fluctuation. Past performance does not
indicate future results.
Source: Frank Russell Company
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This article was written by a professional financial journalist
for Chris Cooper & Company and is not intended as legal or investment
advice.
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4/17/01
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