Recent Articles

The Uncommon Average

Frequency of Positive Returns in the S&P 500 index

The US stock market has delivered an average annual return of around 10% since 1926. But short-term results may vary, and in any given period stock returns can be positive, negative, or flat. When setting expectations, it’s helpful to know the range of outcomes experienced by investors historically. For example, how often have the stock …

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The Market’s Response to Crisis

Performance of a Balanced Strategy

The Market’s Resiliency Discipline is an integral element to successful investing. However, even the most stalwart investors can be shaken when a clear crisis has hit. Fortunately, the market has a stronger resolve. The chart above shows performance of a balanced investment strategy following a few historical crises. The subsequent one-, three-, and five-year annualized …

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Recent Market Volatility

US Market Intra-Year Gains and Declines VS Calendar Year Returns

After a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From September 30 to October 10, the US market (as measured by the Russell 3000 Index) fell 4.8%, resulting in many investors wondering what the future holds …

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The Value Premium

Value Stocks Minus Growth Stocks

The US Value Premium—Year by Year Value stocks have offered an average long-term return premium over growth stocks, which may reflect compensation for bearing higher systematic risk. However, short-term fluctuations in the value premium (relative to growth stocks) can be extreme. The light blue bars in the graph indicate the years in which the US …

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Risk & Return are Related

Dimensions of Stock Returns around the world

Although Wall Street and the media encourage us to believe that we can find a ‘free lunch,’ these opportunities are very difficult to exploit. In other word, there are no low-risk/high expected return investments. Here’s why: if an investment offered a disproportionately higher return for the risk involved, word would spread and others would try …

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