Weak Sister
What is a Weak Sister?
A weak sister is a security, economy or operating unit that performs worse than all the others.
How Does a Weak Sister Work?
Let's say John Doe's portfolio contains five stocks: Company A, Company B, Company C, Company D and Company E.
Company A and B have returned 25% over the last five years. Company C has returned 15%. Company D has returned 40%. Company E has returned only 1%. In this portfolio, Company E is the weak sister and is pulling down the average return of the whole portfolio.
Why Does a Weak Sister Matter?
Weak sisters drag down overall performance, which is why there is often a temptation to get rid of them. However, weak sisters can sometimes surprise everyone and thus may be worth sparing. Because they are valued the lowest or have the lowest expectations, and growth or improvement can be dramatic.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
