In this volatile and uncertain environment, proper asset allocation is the first step to ensure safety for a long term retirement investment (such as a 401K, 403B or variable annuity) portfolio. The second step is to decide what to invest in each asset identified in the first step. It has been well recognized that high quality, multi-national large cap growth companies are the place to invest in equity portion of a portfolio.

The following table shows how U.S. stock styles stack up currently.

Assets Class Symbols 12/06
Russell Largecap Growth IWF 3.25% -1.19% ^
Russell Largecap Index IWB 2.85% -2.09% ^
Russell Largecap Value IWD 2.67% -2.83% ^
Russell Smallcap Growth IWO 2.51% -4.92% ^
Russell Smallcap Index IWM 2.01% -5.33% ^
Russell Midcap Value IWS 1.68% -3.36% ^
Russell Midcap Indedx IWR 1.56% -3.5% ^
Russell Smallcap Value IWN 1.53% -5.94% ^
Russell Midcap Growth IWP 1.49% -3.47% ^

The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

Large cap growth stocks are usually those high quality (stable cash flow, higher earnings growth) companies. Russell Large Cap Growth ETF (IWF) has the following top 10 holdings:

Company Symbol % Assets
Apple Inc. AAPL 5.44
Exxon Mobil Corporation Common XOM 4.50
International Business Machines IBM 3.51
Microsoft Corporation MSFT 2.92
Google Inc. GOOG 2.32
Coca-Cola Company (The) Common KO 2.04
Philip Morris International Inc PM 1.89
Oracle Corporation ORCL 1.85
Schlumberger N.V. Common Stock SLB 1.57
Pepsico, Inc. Common Stock PEP 1.56

Most of them are multi-national companies that derive revenues worldwide.

See also

High Quality Stock ETN: Morningstar Wide Moat Focus