Morningstar Style Boxes: AND THE MAKE-UP OF THE MARKET

• Robert Schramm• Milwaukee Bogleheads• March 3, 2015

Student Level Expertise

Ages: 20’s and up

M* Equity Style Box

Total Stock Market

·  Giant represents the largest 1 percent of U.S. companies.

· Large represents the next largest 4 percent of U.S. companies.

· Medium represents the next 15 percent of U.S. companies.

· Small represents the next 30 percent of U.S. companies.

· Micro represents the bottom 50 percent of U.S. companies.

Market Capitalization

Indexes

• S&P 500o379 Industrialo14 Transportationo46 Utilityo61 Financials

S & P 500 Index

• Largest 50 Stocks60%• Largest 100 Stocks

70%• Largest 200 Stocks

88%• Largest 300 Stocks

95%• Other 200 Stocks

5%

% Market Value

S&P 500http://us.spindices.com/index-family/us-equity/market-cap/

S&P 400 Mid-Cap

S&P 600 Small Cap

S&P Value 500

S&P Value 500

Small Cap Value

I-Shares Micro Cap

REIT

Health Care

US Equity Market Structure

Exchange Companies % Tot. Mkt Value

NYSE 1665 80%

American 375 >1%

Nasdaq 3015 19%

Bulletin Board 3500+ >1%

Major Market Index Penetration

More Indexes• Russell 2000

o Smallest 2000 of 3000 Largest Companies

• Wilshire 5000o Value weighted of most active US stocks

• Wilshire 4500o All of the 5000 except those in the S&P 500

More Indexes• MSCI EAFE

o (Morgan Stanley Capital International Europe Australia and Far East Index)

o 20 countries excluding Canada and the US

• MSCI Emergingo 20 world emerging marketso (Argentina, Brazil, Chile, Colombia, Greece, India, Peru, Philippines,

Portugal, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela)

Do you try to time the market?

• Investors would do well to learn from deer hunters and fishermen who know the importance of “being there” and using patient persistence – so they are there when the opportunity knocks.

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Charles EllisInvestment Policy

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Milwaukee Bogleheads®

• A DIY investment group, followers of John Bogle's Index investing strategies, the Milwaukee local chapter of Bogleheads.

• This presentation was made March 3, 2015 by Bob Schramm of our chapter.

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Disclaimer

• All examples are for illustration purposes only and are not investment recommendations.

• The views expressed in the presentation, are those of the presenter, commenters, guests and participants and may not reflect the views of the Bogleheads organization.

• Use your discretion in using examples presented here for your own investment purposes.