Our “Off The Wall” Blog
is now Monument #Unfiltered

Subscribe below to receive our unique, straight-forward, unfiltered wealth advice delivered straight to your inbox.

Diversification Matters. Stocks Matter.

Diversification & Stocks Matter

Everyone knows that markets have been in the dumps this year.

But did you know if you look back at the trailing 12-months from the end of November (11/30/22), the Dow was actually up 0.31%?

While we always seem to focus on the calendar year as a start/stop date when evaluating performance, it’s somewhat irrelevant to an investor who’s looking to grow their wealth.

But before I dive in deeper, I have two housekeeping notes:

#1 – We’re on Instagram. I’ve been writing less frequently because we have been publishing more digital content on Instagram and our Podcast channel (more on that in #2).

If you are on Instagram, be sure to follow us. We’ve been posting quick and timely videos (or “reels” as they’re called). We will include links to our Instagram videos in our blog updates but, to see them in real time, be sure to follow @monumentwealth on Instagram and hit the “bell” icon (see below) to get alerted when new content is posted. Instagram is fast and easy for us to post quick and informative video updates. Plus, everyone likes watching the dogs in action and seeing the more personal side of our team members. Be there or be square!

Monument Wealth on Instagram

#2 – Our Podcast has taken off.  I have always loved podcasts, but I never anticipated how popular the medium would become for Monument. The feedback we get is that our OFF THE WALL Podcast is interesting in a way our blog is not – it’s conversational and provides not only an opportunity for us to have guests but to also allow listeners to ‘sit in’ on conversations we have as a Team.  As a Team, we are talking about the markets and building wealth all the time, so we decided to simply start recording those conversations and sharing them.

We are currently aiming to do one asset management/market overview topic with Erin, Nate and myself once a quarter, but we can also record and quickly publish one if there is a timely topic to discuss. They are fun, easy and, for some, more entertaining than the blog. Bottom line is, we are really focusing on delivering you the best content experience in 2023.  Be sure to see the Podcast page and use the links to subscribe to one of the popular podcast players – Apple, Google, Spotify, we’re there.

Ok, so back to the markets….

As of 11/30/22, the Dow was down -4.81% YTD. Now compare that to the Nasdaq, down -26.70% YTD. If the year ended on 11/30/22, this would have been the SECOND largest positive spread of the Dow to the Nasdaq since 1973 (the year the Nasdaq started publishing data).

That’s a big difference…about a 22% spread. And that’s just price returns which doesn’t account for adding in dividends.

The largest positive spread took place in…drumroll…2000.

How about the opposite?

The two largest years of outperformance for the Nasdaq over the Dow came in 2020 and 1999, where the Nasdaq outperformed by 36% and 63% respectively.

Ok, so here’s the “So what?!” part…

Consider this…

Meta: 52 week high $352.71, currently $122, needs to increase 187% to get back to the high

Google: 52 week high $152, currently $101 and needs to increase 51% to get back to the high

Apple: 52 week high $183, currently $147 and needs to increase 25% to get back to the high

Amazon: 52 week high $177, currently $92 and needs to increase 94% to get back to the high

Netflix: 52 week high $632, currently $318 and needs to increase 99% to get back to the high

With that in mind, two things matter: Diversification & Stocks

First, diversification matters.  A good portfolio has several pistons in the engine and together, they go up and down to make the car go forward.  Right now, investors who overconcentrated in big popular tech names are hurting way more than investors who for example, hold a portfolio of dividend paying stocks. That pendulum will swing back and forth but sometimes the best time to make a comment about diversification is when that pendulum swing is at its apex.

Second, stocks matter. Just as I saw in 1999-2000, a lot of individual investors start catching FOMO (fear of missing out) and start buying or over concentrating in the highflyers.  I get it, it’s not easy to watch stocks you don’t own keep going up and it’s even harder to part ways with them when they keep going up.  Like diversification, that pendulum will swing back and forth but sometimes the best time to make the comment about overconcentration (and frankly overconfidence) is when that pendulum swing is at an apex.

Point – it’s easy to get overconcentrated when stocks are going up 1) overtly by falling in love with them and loading up or 2) covertly through normal growth within a diversified portfolio.

Have a solid, unemotional plan and process to deal with that.

DBA Signature

Get Monument #Unfiltered: Our Free Private Wealth Newsletter

Our no B.S. wealth advice delivered 2x per month, max. Tuned specifically for busy, high-net-worth business professionals and investors who want straightforward advice without the fluff.

David B. photo

David B. Armstrong, CFA

President & Co-Founder

Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....

Learn more ...


Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.

A copy of Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results.  It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.

Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.