Since COVID hit in 2020, the dominant global investment has been large US stocks, and more specifically those stocks considered growth technology stocks (aka US Large Cap Growth). However, research has shown that over most 5- and 10-year periods, US Large Cap Growth is not the best performing investment. (1(a))
The key to proper portfolio management is not to chase performance and buy whatever just happened to be the best performing investment recently, but by constructing a portfolio of investments that will deliver returns from future economic growth, and ones that may react differently to surprise changes in economic policy and condition to reduce volatility. The disciplined oversight and management of this diversified portfolio of investments over time is what will help our clients reach their financial goals.
Please take a couple of minutes to watch this video on diversification:
Disclaimer Note: Any videos linked in this newsletter are provided for educational purposes only and do not constitute investment advice or a recommendation of any specific investment or strategy. Diversification does not ensure a profit or protection against loss in declining markets. References to investment strategies or market environments are general in nature and do not reflect results achieved by any specific investor or client.
For the past several years, the investment landscape was dominated by a very narrow group of performers: super-large, growth-oriented U.S. tech companies. Since the pandemic, these giants consistently led the market, making it feel as though owning anything else—like international stocks, small companies, or bonds—was unnecessary. However, relying solely on one sector is a risky strategy, especially as you approach retirement. Market cycles inevitably shift, and we are now seeing a significant change in that trend.
The good news for balanced investors is that diversification is finally back in style and adding tremendous value to portfolios. Over the last 18 months, and notably in 2025, international stocks have emerged as some of the top performers globally, driving a large portion of overall returns. This shift proves that while U.S. tech had a spectacular run, it won’t be the winner every single year. By spreading investments across different asset classes, you position your portfolio to capture gains from wherever the next wave of growth originates.
Ultimately, the goal of a diversified strategy is to achieve higher potential returns with less overall risk. This balance is crucial for creating consistent cash flow; when one area of the market faces a downturn, other parts of your portfolio can step up to provide the liquidity you need. At Village Wealth Advisors, we focus on navigating these shifts so you can worry less about market volatility and stay focused on your long-term financial goals. If you know someone who could benefit from this perspective, we would be honored to help them navigate their own financial journey.
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The market commentary and economic observations in this newsletter are provided for general informational and educational purposes and only reflect the views of Village Wealth Advisors as of the date of publication. These views are subject to change without notice and should not be construed as investment advice or a recommendation to buy or sell any security. Diversification does not ensure a profit or protect against loss in declining markets.
Statements regarding economic conditions, interest rates, market trend, political developments, or potential outcomes are forward-looking in nature, based on current assumptions and analysis, and involve risks and uncertainties. Actual results may differ materially. There is no guarantee that any forecast, projection, or opinion will be realized.
The information provided does not take into account the specific financial circumstanced, objectives, or risk tolerance of any individual investor, and references to market conditions or trends do not imply results for any particular client portfolio. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results.
(1(a)) Fama, E. & French, K. (2021). “The Value Premium.” Review of Asset Pricing Studies.
