Chart of the Day: A Case for Diversification aka the Chicklets Chart

Today’s Chart of the Day, often referred to as the Chicklets Chart, is updated annually to reflect the returns of the major factors in the equity market going back to 2011.  

Factors include size, dividend level, growth/income, and international/domestic. A quick scan of each year shows how each factor’s returns vary - some go from best to worst, some are flat year-to-year, and some, like the Large-Cap S&P 500 (in dark blue), which combines many of the factors into one, tend to sit in the middle each year. 

We refer to this chart as the "Case for Diversification" because it demonstrates that concentration in one factor can add unneeded risk in your portfolio.