From Dimensional Fund Advisors The impact of missing just a few of the market's best days can be profound, as this look at a hypothetical investment in the stocks that make up the S&P 500 Index shows. A hypothetical $1,000 turns into $138,908 from 1970 through the end of August 2019. Miss the S&P 500's five best days and that's $90,171. Miss the 25 best days and the return dwindles to $32,763. There's no proven way to time the market—targeting the best days or moving to the … [Read more...] about What Happens When You Fail at Market Timing
How Markets Work and the FAANG Mentality
The stocks commonly referred to by the FAANG moniker—Facebook, Amazon, Apple, Netflix, and Google (now trading as Alphabet)—have posted impressive gains through the years, with all now worth many times their initial-public-offering prices. The notion of FAANG stocks as a powerful group holding sway over the markets has sunk its teeth into some investors. But how much of the market's recent returns are attributable to FAANG stocks? And does their performance point to a change in the … [Read more...] about How Markets Work and the FAANG Mentality
Jake DeKinder on Recent Market Volatility
After a period of relative calm in the stock market, investors have experienced increased volatility in recent days. While market volatility can create anxiety for some, reacting emotionally and changing long-term investment strategies in response to short-term declines could prove more harmful than helpful. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. This content is distributed for informational purposes, and it is … [Read more...] about Jake DeKinder on Recent Market Volatility
IPOs: Profiles Are High. What About Returns?
Initial public offerings (IPOs) often attract initial public interest—especially when familiar brands become broadly available to investors for the first time. In recent months, investors have had the opportunity to buy shares of ride-hailing networks Uber and Lyft, workplace productivity services Zoom and Slack, and other high-profile businesses ranging from Pinterest to Beyond Meat. News outlets contribute to the frenzy, building anticipation, tracking the early hours of trading, … [Read more...] about IPOs: Profiles Are High. What About Returns?
Timing Isn’t Everything
Attempting to buy individual stocks or make tactical asset allocation changes at exactly the "right" time presents investors with substantial challenges. Over the course of a summer, it's not unusual for the stock market to be a topic of conversation at barbecues or other social gatherings. A neighbor or relative might ask about which investments are good at the moment. The lure of getting in at the right time or avoiding the next downturn may tempt even disciplined, long-term investors. … [Read more...] about Timing Isn’t Everything
The Uncommon Average
"I have found that the importance of having an investment philosophy—one that is robust and that you can stick with— cannot be overstated. David Booth The US stock market has delivered an average annual return of around 10% since 1926.[1] 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 see the range of outcomes experienced by investors historically. For example, how often … [Read more...] about The Uncommon Average