Читать книгу Investing For Dummies - Eric Tyson - Страница 45

Stocks are generally classified by the size of the company. Small-company stocks aren’t stocks that physically small companies issue; they’re simply stocks issued by companies that haven’t reached the size of corporate behemoths such as IBM, Walmart, or Coca-Cola. The Standard & Poor’s 500 index tracks the performance of 500 large-company stocks in the United States. The Russell 2000 index tracks the performance of 2,000 smaller-company U.S. stocks.

Small-company stocks have outperformed larger-company stocks during the past seven decades. Historically, small-company stocks have produced slightly higher compounded annual returns than large-company stocks. However, nearly all this extra performance is due to just one high-performance time period, from the mid-1970s to the early 1980s. If you eliminate this time period from the data, small stocks have had virtually identical returns to those of larger-company stocks.

Also, be aware that small-company stocks can get hammered in down markets. For example, during the Great Depression, small-company stocks plunged more than 85 percent between 1929 and 1932, while the S&P 500 fell 64 percent. In 1937, small-company stocks plummeted 58 percent, while the S&P 500 fell 35 percent. And in 1969 to 1970, small-company stocks fell 38 percent, while the S&P 500 fell just 5 percent. During the 2020 COVID-19 contraction, the S&P 500 fell about 33 percent while the small-company Russell 2000 dropped nearly 44 percent.

Contrast these areas with the many rural parts of the United States where the price of real estate is relatively low because of the abundant supply of buildable land and the relatively lower demand for housing.