by David Booth — Executive Chairman and Founder Technology enables immediate access to everything wherever and whenever we want it. In many cases, such as staying in touch with friends and family, or learning about world events, that’s a good thing. However, when it comes to investing and money management, my fear is that faster …
The Stock Market and the Economy are Different AnimalsRisk Premium Rate of Return vs. Annual Real GDP Growth Markets Look Forward, but Recessions Look Back Are we headed into a recession? A century of economic cycles teaches us we may well be in one before economists make that call, but one of the best predictors …
If a Recession Comes, That is Not a Reason to Sell Read Full Article »
Some investors may worry about the stock market sinking after a recession is officially announced. But history shows that markets incorporate expectations ahead of economic reports. The market is constantly processing new information, pricing in expectations for companies and the economy. Investors who look beyond after-the-fact headlines and stick to a plan may be better …
Markets Don’t Wait for Official Announcements Read Full Article »
Thomas Meinke — Investment Strategist Wes Crill, PhD — Head of Investment Strategists and Vice President Exhibit 1 — Recovery Race: Growth of a $100,000 fixed income allocation with a five-year duration Investors have likely noticed the improved opportunity set in fixed income due to higher yields. And yet some investors may be hesitant to …
Rising Rates: Short-Term Pain for Long-Term Gain Read Full Article »
What Goes Up… Many investors may think a market high is a signal stocks are overvalued or have reached a ceiling. However, they may be surprised to find that the average returns one, three, and five years after a new month-end market high are similar to the average returns over any one-, three-, or five-year …
The impact of missing just a few of the market’s best days can be profound, as shown by this animated look at a hypothetical investment in the stocks that make up the S&P 500 Index. https://my.dimensional.com/video/27061/missing-the-markets-best-days
Yearly Observations of Premiums: Value minus Growth: US Market January 1927—June 2021 Past performance is no guarantee of future results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. Indices are not available for direct investment. Their performance does not reflect the expenses associated with …
When It’s Value vs. Growth, History’s on Value’s Side Read Full Article »
Investors are often conflicted about record-high stock prices. They are pleased to see their existing equity holdings gain in value but apprehensive that higher prices somehow foreshadow a dramatic downturn in the future. And they may be reluctant to make new purchases since the traditional “buy low, sell high” mantra suggests committing funds to stocks …
You may see investment articles discuss the “Real” rate of return. That number computes the annual percentage of profit earned after it is adjusted for inflation. This allows us to see the actual purchasing power of assets when viewed over a certain time period. Investors may wonder whether stock returns will suffer if inflation keeps …
Will Inflation Hurt Stock Returns? Not Necessarily Read Full Article »
Nest Eggs in Different BasketsIt is difficult to predict future returns by looking at the past, as shown by the performance of global mar- kets since 2001. This table powerfully demonstrates the randomness of global equity returns. It illustrates 20 years of annu- al returns in 22 developed markets. Each color repre- sents a different …