Since 1926, the US stock market has rewarded investors with an annualized return of about 10%. But returns in any given year may be sky-high, extremely poor, or somewhere in between. Understanding the range of potential outcomes can help you stick with a plan and ride out the inevitable ups and downs. Past performance is …
The Bumpy Road to the Market’s Long-Term Average Read Full Article »
The Long and Short of It Value stocks have gone through periods of both extreme over- and underperformance in recent years—a reminder that even reliable premiums can be volatile over shorter periods. Value stocks have outperformed growth stocks in the long run, though the road can be bumpy. Disciplined investors may be rewarded for staying …
The Value of Discipline in Value Investing Read Full Article »
On Friday, March 10, regulators took control of Silicon Valley Bank as a run on the bank unfolded. Two days later, regulators took control of a second lender, Signature Bank. With increasing anxiety, many investors are eyeing their portfolios for exposure to these and other regional banks. Rather than rummaging through your portfolio looking for …
When Headlines Worry You, Bank on Investment Principles Read Full Article »
Investment opportunities exist all around the globe, but the randomness of global stock returns makes it exceedingly difficult to figure out which markets are likely to be outperformers. How should investors deal with this kind of uncertainty? First, they should remember that it’s challenging, at best, to predict a country’s returns by looking at the …
Which Country Will Outperform? Here’s Why It Shouldn’t Matter Read Full Article »
by David Booth: Chairman and Founder of DFA Funds Consider everything investors have been through in recent years: a global pandemic, rapid inflation, war in Europe, and volatile stock and bond markets. It’s reasonable to feel uneasy in the face of so much uncertainty. Now imagine it’s the end of 2019 and you know what …
Two Steps Forward, One Step Back for Investors Read Full Article »
David Booth, DFA Chairman & Founder One of the best things about markets is that they don’t have memories. They don’t remember what happened last week or last year. They don’t even remember what happened a minute ago. Prices change based on what’s happening right now and what people think will happen in the future. …
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 »