KEY TAKEAWAYS The prospect of an increase in the federal funds rate has raised questions about future bond performance for some investors.Our analysis of global government bond data from 1984-2021 shows no reliable relation between past changes in the federal funds rate and either future bond excess return over cash or future term premiums.We can target higher expected returns by dynamically varying a strategy's duration decision based on current term spreads across global yield … [Read more...] about All Eyes on the Fed? A Look at Federal Funds Rate, Bond Return, and Term Premium
KEY TAKEAWAYS Soaring inflation and record market highs may leave investors wondering whether it's time to adjust their portfolios.Researchers have examined a wide range of timing strategies based on earnings, dividends, interest rates, economic growth, and more.A recent Morningstar report showed that investors may be better off steering clear of tactical asset allocation strategies and avoiding making short-term shifts among asset classes. Read the full article by DFA Vice President … [Read more...] about Is It Time to Sell Stocks?
KEY TAKEAWAYS Stock markets continued to climb higher in 2021, with the S&P 500 hitting a series of all-time closing highs and ending the year near a record. While COVID-19 continued to dominate headlines, concerns also focused on inflation and its potential impact. Investors saw volatility in areas ranging from cryptocurrencies to so-called meme stocks, highlighting the importance of long-term planning and flexibility in a fast-moving market. Read Dimensional's full article, … [Read more...] about Market Review 2021: A Recovery Amid Challenges
Since the beginning of the COVID pandemic, David Booth's beliefs in markets have been tested more than ever. And they've held up. The Executive Chairman and Founder of Dimensional Fund Advisors shares his perspective in, "Why I'll Always Be Optimistic About the Market." Rather than having to guess what will happen to whom and when, I choose a different path. I invest in the market.David Booth, Executive Chairman and Founder of Dimensional Fund Advisors Read the full article from … [Read more...] about Why I’ll Always Be Optimistic About the Market
Whether you've been investing for decades or are just getting started, at some point on your investment journey you'll likely ask yourself some of these questions: 1. What sort of competition do I face as an investor? 2. What are my chances of picking an investment fund that survives and outperforms? 3. If I choose a fund because of strong past performance, does that mean it will do well in the future? 4. Do I have to outsmart the market to be a successful investor? … [Read more...] about Key Questions for Long-Term Investors
Nearly 30 years after its formal discovery,1 the appeal of stock price momentum2 remains in the eye of the beholder. Read the latest research paper, "Myth-Busting with Momentum: How to Pursue the Premium" by Dimensional Head of Investment Strategist and Vice President Wes Crill, PhD, HERE. FOOTNOTES Narasimhan Jegadeesh and Sheridan Titman, "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency," Journal of Finance 48, no. 1 (1993).Stock price … [Read more...] about Myth-Busting with Momentum: How to Pursue the Premium