Several books about indexing point to historical outperformance for small cap value stocks. I visited Portfolio Visualizer (
https://www.portfoliovisualizer.com/backtest-asset-class-allocation) and plugged in 3 portfolios:
* 100% large cap ("lg")
* 50% large cap / 50% small cap value ("mix")
* 100% small cap value ("sv")
I walked over each decade (Portfolio Visualizer has data from 1972 to now), and used the real return (the return minus inflation, which is shown when hovering over the (i) next to the performance):
1972-79: -3.3 lg 1.6 mix 6.2 sv "sv" best
1980s: 11.4 lg 13.6 mix 15.6 sv, "sv" best
1990s: 14.7 lg 13.2 mix 11.2 sv, "lg" best
2000s: -3.5 lg 1.0 mix 5.0 sv, "sv" best
2010s: 11.8 lg 11.7 mix 11.4 sv, "lg" best
Looking back:
1972-2018(sept): 6.2 lg 8.3 mix 9.9 sv "sv" best
40yr, 1979-2018, 8.1 lg 9.8 mix 11.0 sv "sv" best
30yr, 1989-2018, 7.8 lg 8.7 mix 9.3 sv "sv" best
20yr, 1999-2018, 4.1 lg 6.0 mix 7.6 sv "sv" best (ignores bull run, includes dot-com and 2008 crashes)
15yr, 2004-2018, 6.5 lg 7.0 mix 7.3 sv "sv" best
10yr, 2009-2018, 12.9 lg 13.0 mix 12.9 sv "mix" best (ignores 2008 crisis, but includes recovery)
5yr, 2014-2018, 10.3 lg 9.2 mix 7.9 sv "lg" best
To me, this data says a mix of small cap value with a total market fund would be better than a total stock market fund alone - in most prior time periods.
Do others have data that contradicts Portfolio Visualizer? Or additional data going back farther in time?