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The Next Normal by David Booth

by David Booth, Executive Chairman & Founder A year ago, at the end of March 2020, the S&P 500 was down nearly 20%1 and the world was scrambling into lockdown. Many experts wrote articles telling us where we would be in a year. I don’t remember reading any that said the S&P 500 Index would be …

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What History Tells Us about the Markets and US Congress

Red + Blue + PurpleIt would follow logic that the government’s actions can have a direct result on the stock market. After all, if taxes are raised or lowered, that should affect company profits, right? However, the market is complex. Several global factors affect the market, not just actions from the government. Nearly a century …

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The Bumpy Road to the Market’s Long-Term Average

S&P 500 Index Annual Returns 1926-2020 Nowhere Near the Average Stocks can reward investors who maintain a long- term outlook. But inconsistent short-term perfor- mance may test one’s commitment to a long-term strategy. Since 1926, the US stock market has rewarded in- vestors with an average annual return of about 10%. But it’s important to …

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Staying in Your Seat

The markets have ups and downs, but what are the long-term effects of trying to time the market and just missing out on one big day? This quick video shows that staying in your seat is typically the best option.

Presidential Elections: What Do They Mean for Markets?

It’s almost Election Day in the US once again. While the outcome may be uncertain, one thing we can count on is that plenty of opinions and predictions will be floated in the days surrounding the vote. In financial circles, this will inevitably include discussion of the potential impact on markets. But should elections influence …

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What History Tells Us about US Presidential Elections & the Market

Growth of $100 in Fama/French Total US Market Research IndexMarch 4, 1929 — June 30, 2020 Do Blue or Red Make Green?It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But as nearly a century of returns shows, stocks have trended upward across …

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Why Investors Might Think Twice About Chasing the Biggest Stocks

Average Annualized Outperformance of Companies Before and After First Year Becoming 1 of 10 Largest in USCompared to Fama/French Total US Market Research Index, 1927-2019 Past performance is no guarantee of future results. Indices are not available for direct investments; therefore, their performance does not reflect the expenses associated with the management of an actual …

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Bulls, Bears, & Long-Term Benefits of Stock Investing

Investment graph

Riding the Bull History suggests that markets hitting new highs, or experiencing declines, provides little evidence of future returns. Looking at the S&P 500 Index from 1926-2018, we find that average annualized returns have been positive over one-, three-, and five-year periods following both new monthly highs and market declines of at least 10%. In …

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Do Mutual Funds Outperform Benchmarks?

Dimensional’s 2020 analysis of US-based mutual funds shows that only a small percentage of funds have outperformed industry benchmarks after costs—and among top-ranked funds based on past results, only a small percentage have repeated their past success.

An Age Old Debate in Finance: Active vs. Passive

Active vs passive graph

Don’t Try to Outguess the Market The competitive landscape makes the search for future winners a formidable challenge. Confronted with so many fund choices—and lacking an investment philosophy to inform their search—some investors will resort to using track records as a guide to selecting funds, reasoning that a fund manager’s past outperformance is likely to …

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