Year End Reports


2018 Year End Report

The very beginning of 2018 promised to be more of the same from 2017, as stocks initially propelled themselves higher on tax cuts and a business-friendly environment in Washington. But the year has been a surprising disappointment for many. Instead of continuing on their steady upward trajectory, stocks had a turbulent 2018, rocked by rising interest rates, economic slowdowns in China and elsewhere, and trade tensions and political uncertainty at home. The markets whipsawed, rising to a record in January, then correcting through the spring only to rebound to more record highs and then finish off the year in a downward spiral.

2017 Year End Report

Economic growth in the U.S. and around the world gained momentum throughout 2017, fueling some eye-popping gains in global stock markets and encouraging optimism for consumers. Despite the political turbulence and early legislative failures by the Trump administration, December's passage of the tax plan was seen as a key victory that will propel the economy solidly into 2018.

2016 Year End Report

We can call 2016 the year of "contrarian surprises". The market had one of the worst starts to the year ever. By mid-February, the S&P 500 had fallen over 10% and the Russell 2000 was down nearly 16%. These losses were on top of what was a lackluster and very narrow market in 2015, where most of the gains came from a handful of large growth stocks. But by the end of the year, the market had rallied in a big way, with the small-caps and value stocks that had performed so poorly in 2014 and 2015 leading the way.

2015 Year End Report

Overall, 2015 was a mixed year for stocks, and while the S&P 500 came in essentially flat for the year, there was a lot of damage underneath the surface in small- and mid-caps and value stocks. Based on our own internal figures, 56% of all stocks in our investable universe fell in price during the year. Many of the large-gaining positions came from a handful of stocks. In 2015, we saw the term FANG (Facebook, Amazon, Netflix and Google) get introduced, and if you didn’t have exposure to these growth names or some of the high-flying biotechnology firms, your portfolio may have been left in the dust.

2014 Year End Report

When 2014 began, most forecasters were expecting another year of tepid US growth. Most believed interest rates finally would rise, and oil prices would also push higher. And, given the huge gains in US markets in 2013, it seemed most were predicting that stocks would pull back, or perhaps eke out meager gains. Top performing strategies were the John Neff and Momentum-based models, two very different fundamental approaches

2013 Year End Report

If you were listening to some pundits, you might've mistaken the opening bell of 2013 for a death knell. When the year started, we were staring at a looming budget sequestration, a lingering debt crisis in Europe, and a slowdown in China. Many viewed the challenges as insurmountable, or close to it, for stocks. But the market didn't get the message. For the full year, the Peter Lynch and Martin Zweig inspired guru portfolios lead the pack.

2012 Year End Report

In 2012, the "Wall of Worry" was steep for the market -- and stocks climbed it with a stubbornness that surprised many. In fact, while there was significant volatility at times, the index didn't have one day where its closing price put it in the red, year-to-date. That's the first time that's happened since 1979, and just the ninth time it's happened since 1928. At the top of the list performance wise was the Ben Graham value investor model and the portfolio based on Warren Buffett's approach.

2011 Year End Report

As the late, great Benjamin Graham said, in the long term, the stock market is a weighing machine, judging stocks based on measurable criteria like earnings, sales, debt, profit margins, and return on equity. But in the short term, as Graham also noted, it is a voting machine -- that is, it is highly subject to the whims and moods of investors. And for much of 2011, fear was driving most investors' votes, thanks to a number of macroeconomic issues around the globe. Growth models excelled in 2011, with the Validea Momentum strategy and the model based on James O'Shaughnessy coming in in the #1 and #2 slots for the year.

2010 Year End Report

Heading into 2010, a myriad of potential problems confronted the economy and stock market -- problems that had many pundits predicting a tough year, and many investors waiting on the sidelines. But despite growing debt woes in Europe, a burgeoning U.S. deficit, and an unemployment rate that remained stubbornly high, both the economy and stock market proved remarkably resilient. The best performers for the year were the Book/Market portfolio, based on the work of Joseph Piotroski, followed by the James O'Shaughnessy growth/value model.

2009 Year End Report

The contrast between the stock market at the start of 2009 and at the end of 2009 was about as stark as it gets, and not just in terms of price level. When the year started, fears of financial Armageddon hovered over equities. But by year end, stocks surged, with the S&P 500 gaining about 65% from its March low through the end of the year, and the Nasdaq Composite jumping close to 80% over that span. Two of our models more than doubled the S&P 500 in 2009. The strategy based on Joel Greenblatt's Magic Formula and the Warren Buffett-based model each had a blowout year.

2008 Year End Report

2008 was one of the worst in the history of the U.S. stock market. While investors and analysts entered 2008 hoping that the subprime mortgage mess could be contained, it quickly became clear that the problem's tentacles reached much farther than many thought. The Ben Graham model portfolio and the Small-Cap Growth investor portfolio, based on a strategy by The Motley Fool, had losses far less than the market in what was a gut-wrenching year for most stocks.

2007 Year End Report

In 2007, the solid gains made by most major stock indexes belied some significant disparities in the market's performance. One of the major disparities during the year involved the gap between growth and value stocks. While extensive research shows that value stocks tend to outperform growth companies over the long term, the opposite occurred in 2007. Momentum and growth stocks were in favor this year, and that helped the Validea Momentum and Small-Cap growth investor portfolios lead the pack in terms of relative performance.
Performance Disclaimer: Returns presented on are model returns and do not represent actual trading. As a result, they do not incorporate any commissions or other trading costs or fees. Model portfolios with inception dates on or after 12/30/2005 include a combination of back tested and live model returns. The back-tested performance results shown are hypothetical and are not the result of real-time management of actual accounts. The back-testing of performance differs from actual account performance because the investment strategy may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. Back-tested returns are presented to provide general information regarding how the underlying strategy behind the portfolio performed in our historical testing. A back-tested strategy has the benefit of hindsight and the results do not reflect the impact that material economic or market factors may have had on advisor's decision-making if actual client assets were being managed using this approach. The model portfolios offered on Validea are concentrated and as a result they will exhibit high levels of volatility and their performance can be substantially impacted by the performance of individual positions.

Optimal portfolios presented on represent the rebalancing period that has led to the best historical performance for each of our equity models. Each optimal portfolio was determined after the fact with performance information that was not available at portfolio inception. As a result, an investor could not have invested in the optimal portfolio since its inception. Optimal portfolios are presented to allow investors to quickly determine the portfolio size and rebalancing period that has performed best for each of our models in our historical testing.

Both the model portfolio and benchmark returns presented for all equity portfolios on are not inclusive of dividends. Returns for our ETF portfolios and trend following system, and the benchmarks they are compared to, are inclusive of dividends. The S&P 500 is presented as a benchmark because it is the most widely followed benchmark of the overall US market and is most often used by investors for return comparison purposes. As with any investment strategy, there is potential for profit as well as the possibility of loss and investors may incur a loss despite a past history of gains. Past performance does not guarantee future results. Results will vary with economic and market conditions. is a research provider that is owned and operated by The Reese Group, LLC. offers model portfolios, screening and stock analysis that is not customized to any individual. No information on should be construed as investment advice. Validea Capital Management is a separate investment advisory firm registered with the state of Connecticut. Validea Capital offers investment management services directly to clients and is a separate entity from The Reese Group, LLC. The Reese Group and Validea Capital are affiliated entities and share partial common ownership.