And The Last Shall Be First

In the two charts below you will find performance charts of selected asset classes as represented by ETFs in 2013.  This is not an exhaustive list of assets but it is a list of asset classes we follow for our different investment strategies.  Chart in red on both is the S&P 500 and is there on each for comparison purposes.

Here's how those same asset classes have done in 2014 below:

Folks, this is why you need to have some diversification of different assets in your portfolios.  Last year growth was all the rage.  You can see that in the performance of investments like the Fidelity Nasdaq Composite Index {ONEQ}.  You strip out growth in 2013 and everything else was more or less dreck.

Note how that has changed so far in 2014.  Virtually nobody thought bonds or gold would be some of the top performing asset classes this year or that REITS would move to the front of the pile.  But there you have it and there they are.  The magic of diversification.  Nobody knows how the rest of the year will unfold but it's a pretty sure bet that if your portfolio is diversified you're feeling a lot less pain right now than if it's concentrated in growth or you're loaded up with momentum names like we showed yesterday.

*Long many of these ETFs in client and personal accounts although positions can change at any time.  I will mention that we are long ONEQ in certain client portfolios since I singled it out above and we are long ETFs representative of the S&P 500 in both client and personal accounts.