Have resource stocks become more prone to extreme moves

John Robertson
John Robertson PortfolioDirect

Have resource stocks become more prone to extreme moves? Since 2005, the annual changes in the small resources share price index in eight out of nine years have been within the top 20% or bottom 20% of all rolling 12 month returns experienced within this segment of the market over the last 20 years. See my chart illustrating the distribution of returns at (VIEW LINK). Results to date for 2013 are heading for another extreme (negative) outcome. The answer to the question impacts how we think about the possibility of catching up on lost performance within the sector. Continuing wide swings offer the chance to catch up but a reversion to more normal returns will make this tough.

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