Hero, Zero or Dolly Parton?
“Investing should be more like watching paint dry or watching grass grow.”
—Nobel laureate economist Paul Samuelson
For Philadelphia Phillies fans the last few weeks have been a good reminder of how quickly things can turn. On August 23, the Phillies came to bat in the bottom of the ninth inning against the St. Louis Cardinals trailing 4-0. Through eight innings they had managed only four hits. Bryce Harper doubled to start the ninth, but the next two hitters made outs. The Cardinals were one out away from a comfortable win.
Then things changed. J.T. Realmuto singled. Justin Crawford walked. Edmundo Sosa doubled home three runs. Bryan De La Cruz singled home Sosa to tie the game. And Kyle Schwarber ended it with a 459-foot home run: Phillies 6, Cardinals 4.
Five days later, they did it again. The Angels led the Phillies 3-1 in the ninth inning in Anaheim. With one out and two runners aboard, Bryson Stott appeared to hit a go-ahead three-run home run, only to have Angels right fielder Wade Meckler reach over the wall and rob him, leaving the Phillies with two outs. The crowd was euphoric. Momentum had shifted entirely to the Angels.
J.T. Realmuto then walked to load the bases. Edmundo Sosa came off the bench and hit the first grand slam of his career. Phillies 5, Angels 3. In the span of a few pitches, the team that seemed certain to be the hero became the zero. That is baseball.
It is also a pretty good description of investing. In the short run, financial markets have a way of making us feel either very smart or very foolish. A particular stock, sector or asset class can look unstoppable for a while. Then something changes. Last year’s hero becomes this year’s disappointment. Sometimes it happens gradually. Sometimes it feels more like the bottom of the ninth.
That is one of the reasons the chart below is so useful. It shows annual returns for different asset classes over time, with the best performer each year at the top of the column and the worst at the bottom. Try finding a pattern:
Large-cap stocks are near the top one year and further down the list another. The same is true for small-cap stocks, international stocks, emerging markets, REITs, high-yield bonds and commodities. They all have their moments. There are plenty of heroes in the chart. There are also plenty of zeros. Then there is the “white box.” The white box represents an illustrative diversified asset-allocation portfolio.1Source: J.P. Morgan Guide to the Markets®. 3Q 2026. Bloomberg, FactSet, MSCI, NAREIT, Russell, Standard & Poor’s, J.P. Morgan Asset Management. Large Cap: S&P 500; Small Cap: Russell 2000; EM Equity: MSCI EME; DM Equity: MSCI EAFE; Comdty: Bloomberg Commodity Index; High Yield: Bloomberg Global HY Index; Fixed Income: Bloomberg U.S. Aggregate; REITs: NAREIT Equity REIT Index; Cash: Bloomberg 1-3m Treasury. The “Asset Allocation” portfolio is for illustrative purposes only and assumes annual rebalancing with the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the MSCI EAFE, 5% in the MSCI EME, 25% in the Bloomberg U.S. Aggregate, 5% in the Bloomberg 1-3m Treasury, 5% in the Bloomberg Global High Yield Index, 5% in the Bloomberg Commodity Index and 5% in the NAREIT Equity REIT Index. Annualized (Ann.) return and volatility (Vol.) represent the period from 12/31/2010 to 12/31/2025. All data represent total return for stated period. Past performance is no guarantee of future results. Guide to the Markets – U.S. Data are as of June 30, 2026. Although the “white box” is illustrative and not based on a PMA portfolio, it reflects the philosophy behind the way we invest.
The white box is analogous to the hitter who keeps the ball in play with singles and doubles. Getting on base. Moving runners along. Being consistent. That player may not lead the league in home runs, but over the course of a long season, he can play a critical role.
Similarly, a diversified portfolio’s objective is not to swing for the fences with every investment decision. Doing that may produce some spectacular home runs, but it also may produce a lot of strikeouts. We prefer portfolios designed, to the best of our ability, to string together singles and doubles while reducing the chances of striking out repeatedly.
Of course, no investment strategy avoids losses altogether and no results can be guaranteed. Every portfolio will have bad innings and difficult seasons. But, there is an important difference between having a bad at-bat and building your entire strategy around an all-or-nothing swing.
Look again at where the “white box” lands from year to year. Over the fifteen year period its annual returns are never at the very top or bottom. That may not produce great cocktail-party conversation when one particular corner of the market is soaring, like the Magnificent Seven or A.I. stocks are now, but in our opinion it is how money that may need to last for decades should be managed.
In short, PMA believes that investing is less about making one brilliant prediction after another – we see that as a far-fetched endeavor – and more about deciding how much risk is appropriate, diversifying broadly, keeping investment costs reasonable, using transparent investments, and maintaining a long-term perspective. Perhaps those things are not particularly exciting and they are not supposed to be. The goal is not to build a portfolio that feels like a hero every month, it is to build one that clients can live with, stay committed to and benefit from over many years.
Which brings me to Dolly Parton — her recent passing prompted a lot of deserved reflection on her extraordinary personality and career in music and movies. But, Dolly Parton was also a remarkably savvy businesswoman. She understood what I tried to emphasize above: long-term success comes from making informed decisions, working hard and staying with it for a very long time.
One of the best examples came early in her career. Elvis Presley wanted to record “I Will Always Love You.” For a young songwriter, having Elvis record one of your songs was about as close to a guaranteed hero moment as you could imagine. But, there was a catch. Elvis’s manager wanted Dolly to give up a significant portion of the publishing rights. She said no.
In the short run, saying no to Elvis probably felt like walking away from the biggest home run of her career. But, Dolly understood the value of what she owned and she kept her publishing rights. Nearly two decades later, when Whitney Houston recorded the song, that patience paid off! The song became an enormous worldwide success. That decision was not lucky, it was patient. And it was not an isolated event.
Over a career spanning decades, she built businesses around her music, film career, publishing rights and eventually Dollywood. Not everything she did was a home run. But she did not need everything to be a home run. She kept working and succeeding. She protected herself from catastrophic strikeouts.
That is what PMA believes in. The financial world encourages people to judge long-term strategies over very short periods. An investment approach that has worked for decades can suddenly feel inadequate because another asset class has outperformed it for six months or a year. That can lead to the temptation to chase the winner and abandon a long-term perspective.
A diversified portfolio means accepting that you will likely never have all of your money in the single best-performing asset class or individual stock. That can be frustrating, but it also means you are less likely to have all of your money in the worst-performing one. That tradeoff is not a weakness of diversification, it is the reason for diversification.
Dolly Parton owned good things, protected them, made sensible decisions, worked hard and stayed committed to the long game. That is an approach to which we can all aspire.
