KEY TAKEAWAYS
- Financial journalists periodically stoke investors’ record-high anxiety by suggesting the laws of physics apply to financial markets—that what goes up must come down.
- But shares are not heavy objects kept aloft through strenuous effort. They are perpetual claim tickets on companies’ earnings and dividends.
- If stocks have a positive expected return, reaching record highs with some frequency is exactly the outcome we would expect.
Read the full article by Dimensional VP Weston Wellington, “All-Time High Anxiety” HERE.
Investors should treat record high prices with neither excitement nor alarm.
DISCLOSURES
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RISKS
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.