U.S. growth stocks are certainly one of the seven or eight investments I usually recommend all clients have in their portfolios.
Evidence-based fund managers have freed themselves from tracking popular indexes by establishing their own parameters for cost-effectively investing in most of the securities within the asset classes being targeted.
There are many other variations on these themes. The point is, indexes using different weightings can reach significantly different conclusions about the performance of the same market slice.
Think of index points as being like thermometer degrees. Most of us can’t explain exactly how a degree is calculated, but we know hot from cold. We also know that Fahrenheit and Celsius both tell us what the temperature is, in different ways.
Roger Gibson, the author of the must read book "Asset Allocation: Balancing Financial Risk," shows that including some portion of commodities in your portfolio of well diversified equity, bonds, and real estate produces better compound average returns--higher, risk-adjusted returns.