KNL 5 year decline, page-12

Here's a small post i wrote some time ago and quoted an interesting Bloomberg article about small-cap trading. Didn't receive a single "like", ha, because the reality of small-cap trading is far from as simple as trends;

Here's a timely reminder about small caps from Bloomberg. I've singled out two great and timely paragraphs;

"There’s just one thing. Most small-cap mutual fund investors don’t stay invested long enough to benefit from that performance edge. They treat small-cap stocks like fashion accessories. They move in and out of small caps as the markets rise and fall, rather than holding them to diversify their portfolios for the long term.

To treat small caps as a trend and then chase them like one is a sure way to hurt returns. Many investors buy and sell mutual funds at precisely the wrong times, resulting in returns that are worse than the performance of the funds they invest in. That happens most often in niche sector funds, like those that focus on small caps, Morningstar data show. Individual investors lagged the very sector funds they invested in by 3.1 percent per year over the last decade period. They only lagged 1.7 percent behind the performance of large-cap U.S. equity funds they bought."

http://www.bloomberg.com/news/2014-10-09/don-t-treat-small-cap-stocks-like-a-fashion-statement.html