The Wisdom of Di ve r s i f i c a t i o n

Take a moment to study this chart. As you can see, not one investment category has performed consistently over the 20-year period. For example, in 1984, the gold sector was the worst performer. By 1987, it was the best. Fast-forward to 1999, when, at the peak of the dot-com boom, small-cap growth stocks we re the best p e rformers. The next year they hit rock bottom. This is why you need a well-balanced, diversified port f o l i o. By allocating your assets among a variety of categories, you protect yourself from unpredictable shifts in the market. In other words, you avoid putting all your eggs in one basket.

Ranking of Investment Categories from Best to Worst Over the Last 20 Years
1984
Bond Best Large Value

1985
Intl

1986
Intl

1987
Gold

1988
Small Value Intl

1989
Gold

1990
Bond

1991

1992

1993
Gold

1994
Intl

1995

1996

1997

1998

1999

2000

2001
Small Value Gold

2002
Gold

2003
Small Growth Small Value Gold Best

Small Small Growth Value Mid Cap Large Value

Large Large Large Large Small Small Value Growth Value Growth Growth Value Mid Cap Small Value Intl Mid Cap Large Growth Intl Mid Cap Large Value Bond Mid Cap Large Value Gold

Gold

Gold

Intl

Large Large Growth Growth

Intl Small Value Large Value Bond Mid Cap Small Growth Large Growth

Large Large Large Growth Growth Value Small Value Large Value Small Growth Mid Cap Bond Small Small Growth Value Mid Cap Bond Small Value Gold Mid Cap Small Growth Gold

Bond Small Value Mid Cap Large Value Intl

Intl

Mid Cap

Bond

Large Large Growth Value Large Value

Mid Cap

Mid Cap Large Value

Mid Cap

Small Value

Mid Cap Bond

Bond Mid Cap Large Value Small Growth

Small Large Large Value Growth Value

Mid Cap Bond Mid Cap

Mid Cap

Large Large Value Growth

Large Large Growth Value Bond Bond

Intl Mid Cap Large Value

Small Small Small Large Small Growth Growth Growth Value Growth Large Bond G r o w th Bond Small Value Intl Gold Small Value Intl Bond Large G r o w th Gold

Large Large Large Bond Growth Value G r o w th Small Small Growth Value Gold Small Value Small Value

Small Small Small Growth Growth Value Intl Small Value Gold Bond

Intl

Intl

Intl

Worst

Large Large Large Large Growth Growth Growth Growth Small Growth Intl Small Bond Growth

Worst

Small Small Small Growth Growth Growth

Gold

Gold

Intl

Gold

Intl

Bond

Gold

Gold

Source: Steele Systems, Inc., TSE Stock Exchange, and Bloomberg.