Assessing the LATINA Style 50 Report: LATINA Style 50 vs. S&P500 2019 Results

Karen Vergara is a
Financial Advisor at Allgen Financial Advisors Inc.

By Karen Vergara, CPA, Allgen Financial Advisors, Inc

Without a doubt no one could have predicted the tumultuous and unprecedented times that we are currently living in, especially when 2019 was a year of growth and market records. As a Latina in the financial industry, I ponder at the effect that both years will have on our Latino population in terms of economic opportunities and challenges. It is important to keep things in perspective and remember that the ebbs-and-flows of the market are part of a functioning economic cycle and although we are still awaiting how 2020 will end, I am pleased to report on the LATINA Style 50 results for 2019.

Since 2001, Allgen Financial Advisors (www.allgenfinancial.com), a Registered Investment Advisory Firm, has been comparing the returns of companies in the LS50 to the stock market by using the S&P 500 index and the results for this year are in. In 2019, the S&P 500 had an average annual return of 28.9%, while the companies in the LS50 had an average 28.6%, a difference of -.3%.

For the 19 years since this report has been commissioned, the LS50 has outperformed by offering a total average annual return of 10.78%, while the S&P 500 has returned 8.43%, a positive difference of 2.35% during the period. To put these numbers into context, a hypothetical investment of $100,000 in the LS50 in the beginning of 2001 would have resulted in a final account balance of $516,111 while an equivalent investment in the S&P500 would have resulted in a final account balance of $349,561 at the end of 2019. That represents approximately an additional $167,000 for an investor choosing to invest in the LS50 index versus the S&P500.

While this analysis is by no means comprehensive, as there are additional variables that must be considered when making investment decisions, it portrays the importance of investing for the long term since market fluctuations are bound to occur. I applaud the LS50 companies that undertake the work to ensure investing in diversity and inclusion continue to be a worthwhile endeavor and look forward to seeing how these companies perform during a year that will be recorded in history books.

Disclaimer This analysis is based on available data at the time of analysis. Some company performances have been omitted as they no longer exist or were not publicly traded. This analysis and returns are also based on a yearly rebalancing of the portfolio to take into account the different companies that are chosen as part of the index each year and an equal weighting of each company. In addition, the measured performance and conclusions derived therein reflect a retrospective look at market performance as the study is conducted after the companies have been selected. It is never prudent to invest based on historical stock performance alone. In addition, the LS50 index is not a real market index but rather a dynamic collection of companies as chosen yearly by LATINA Style magazine. The rates of return and performance illustrated do not reflect any costs associated with investing in either index. As such, the above article should not be construed, nor is it written to provide financial advice as individual situations may vary and past performance is not indicative of future results. Any decision to invest in equity markets should be consulted with a financial professional.

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