The benefit of investing in small U.S. stocks is clear. Over the 42-year period from Jan. 1, 1970, to Dec. 31, 2011, a $10,000 investment in large U.S. stocks would have grown to $507,362.

While that sounds impressive, if that same sum had been invested in small U.S. stocks, the value of the portfolio would have been much greater: $693,816. (The performance of large U.S. stocks was measured by the S&P 500, while the performance of small U.S. stocks is represented by the Ibbotson Small Companies Index from 1970 to 1978 and the Russell 2000 from 1979 to 2011.)

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