What Boxes are Your Investments in?

In a previous post I discussed the need to re-balance your portfolio on a regular basis. One of the first steps to doing this re-balance is to first determine the make-up of your current mix of investments. There are a variety of free tools that let you accomplish this. In this post we’ll talk about the “9 Boxes” or Style Box popularized my Morningstar.

The Style Box will allow you to visually map your portfolio into the 9 categories of:

    • Large value
    • Large blend
    • Large growth
    • Medium value
    • Medium blend
    • Medium growth
    • Small value
    • Small blend
    • Small growth

The horizontal rows represent “valuation” and the vertical columns represent market cap. Here is an example comparing a portfolio to the Dow Jones US Total Market Index.

9 Boxes Example

As a point of further reference let’s compare the above example with the Market Barometer on Morningstar’s web site today (August 29, 2013).

9 Boxes Example-2

In this comparison it shows that in the last 3 months and 12 months small cap stocks, ETF’s and mutual funds have out-performed the large caps. Therefore we might want to consider re-balancing some of our portfolio into small or even mid-cap investments.

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