As we look at where stocks have gone this year, should we worry about the long-term? David Booth, co-founder of Dimensional Fund Advisors shares his thoughts.
Capitalism Is Evolving - Investing For a Better World
Is a Recession a Bad Time to Own Stocks?
With stay-at-home requirements in effect throughout much of the world, some economists say a recession is inevitable. Skittish investors may be tempted to go from stocks to cash because of perceptions of recessions and the effect it has on the economy. If our intuition tells us that things will get worse before they get better, is this the right time to make the switch?
While each recession plays out differently, data from the past century’s 15 recessions suggest that most of the time, investors came out better by sticking with their allocation to stocks. As the accompanying article demonstrates, investment returns were positive in 11 of the 15 recessions just two years after the onset of the recession. Moreover, the average return of stocks over those two years was 7.8%.
It’s far too early to assess how quickly the economy will regain its footing. Still, history suggests that investors who held a steady course, and ignored their intuition, came out better in the long run.
Robert Ades, CFA
The Market's Response to Crisis
The Market Has No Memory
Hindsight Is 20/20, Foresight Isn’t: The Unpredicability of 2019
Many of us may look back at 2019 with pleasure at how well financial markets performed, but how many experts predicted the outcome? Thus far, US stocks have shown double-digit gains, and interest rates have declined, confounding experts who had different expectations. Market forecasting over the short-run tends to be a losing exercise as the following article from Dimensional Fund Advisors illustrates.
The Impact of Inflation
When we think about risk, what’s more important? Do we seek the relative protection of bonds knowing that they are likely to perform better in a market downturn? Or do we concern ourselves with the longer-term impact of inflation and invest in ways that preserve the purchasing power of our assets?
Investing is often about trading short-term risk against long-term goals. Striking the right balance between the two can make a big difference when it comes to reaching our destination. Our latest article, The Impact of Inflation, touches on this issue and helps point us in the right direction.
Tax Reform and What it Means for Your Personal Taxes
Noncash Charities – Do You Need an Appraisal?
Reflections On Recent Stock Market Volatility
If you’ve been watching the stock market, you’ve undoubtedly noticed a fair amount of volatility in recent weeks. At its low, the markets were down by more than 10%. I realize that many investors may be concerned about the sudden volatility in stocks and would like to suggest a few thoughts about recent market activity.
Reflections of 2017
Tax Reform May End a Popular Tax Deferral Strategy for Investors
Key Questions for the Long-Term Investor
How do you make the right investment decisions that last over the long-term? With complex choices and ever-changing ideas, the financial marketplace can be intimidating and confusing at best. This article simplifies the process by answering nine key questions to help illuminate the way.
Q3 Quarterly Capital Market Review
Lessons for the Next Crisis
Will a Trump Presidency Derail Your Investment Strategy?
Why it makes good sense to save for college
In his recent article for the New York Times, Ron Lieber explains that upper-middle-class families should not rely on financial assistance for their children's college education. Let us help you build your college nest egg.