While the academics and money managers argue over the pros and cons of active vs. passive strategies investors often ignore the noise and focus solely on returns. “Did I beat the S&P 500? Good.” That’s all some people seem to care about. What a shame.
Prudent investing requires a full and complete understanding of what is being invested in and why, what the risks are, which variables are controllable, etc. Similarly it helps to understand how an index is constructed if ROR is going to be the measuring stick.
To this point we decided to peel back one layer of the onion and take a look at YTD returns (through 11/30/15). Over this time period the S&P 500 returned 1.04%. 147 of the 500 stocks comprising the index are up at least 10%. 163 are down at least a similar amount. Here’s how the best and worst stocks have faired:
1) Netflix (NFLX) +152.72%
2) Amazon.com (AMZN) +114.21%
3) Activision Blizzard (ATVI) +86.90%
4) Total System Services (TSS) +64.78%
5) NVIDIA (NVDA) +58.20%
500) CONSOL Energy (CNX) -76.67%
499) Chesapeake Energy (CHK) -73.07%
498) Southwestern Energy (SWN) -66.98%
497) Fossil Group (FOSL) -65.26%
496) Freeport-McMoRan (FCX) -64.98%
Where do you want your money? You sure you want to match the index?
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