Small Stocks For The Long Run

Written By: Richard J. Kish and Karen M. Hogan

The growth of self-directed retirement accounts and discussion of possible overhaul of the Social Security system has increased the need for educating the individual investor about asset allocation and portfolio design. This paper analyzes individual asset returns and returns generated from three commonly suggested portfolios. The returns are analyzed over the period 1926 through June 1998, and four holding periods within that period. Investing in small stocks maximizes long run performance. Key words: Decision-making, Diversification, Individual investors, Investment, Household portfolios

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