Over the past few weeks most of our posts have focused on putting the recent stock market volatility in perspective and subduing concerns about the strength of the U.S. economy.

One of the important points we have stressed is the importance of remaining disciplined to your investment strategy because capital markets have rewarded long-term investors. One of the graphics we often show to illustrate this point is the chart included below. This chart shows the growth of $1 from January 1, 1926 through December 31, 2018 had you invested in US small cap stocks, US large cap stocks, long term corporate bonds, long term government bonds, and cash.

In the 1950s psychologist Solomon Asch conducted a series of experiments to investigate the extent to which social pressure from a majority group could affect a person to conform. Asch’s experiments were simple vision tests. A group of eight male college students were placed in a room, shown a card with a line segment on it, and then shown another card with three line segments labelled A, B, and C. One of the line segments on the second card was the same length as the line segment on the first card, while the other two line segments were clearly of a different length. Participants were asked to write down their answers and then give their answers aloud. Seems like a pretty straight forward experiment, but there was a twist.

On September 21, 2018, the Global Industry Classification Standard (GICS) sector structure will experience the biggest change in its history. Specifically, the Telecommunication Services sector will be broadened to include companies from the Consumer Discretionary and Information Technology sectors and renamed Communication Services.

Sector investment strategies have been around for decades and the proliferation of exchange-traded funds, or ETFs, have made these investment strategies available to the masses at a relatively low cost. The problem with sector investment strategies is that while businesses change with technological advancements, the traditional sector classification system has remained unchanged.

The financial media loves to write articles about how much money you would have if you invested $1,000 in a particular stock on a particular date. Often times the authors of these articles will reference the best performing stock of the year and trace the history back to the stock's initial public offering, or IPO.