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
KEY TAKEAWAYS After last year's economic shocks, we shouldn't be surprised to see prices rebounding.But the potential for inflation is one among many factors investors take into account when agreeing on a price at which to trade.A look at headlines from the past 50 years shows the difficulty of timing markets around inflation expectations. Investors may be better served sticking to a long-term plan. Read Dimensional Funds VP Weston Wellington's article, "'Everything Screams Inflation.' How … [Read more...] about ‘Everything Screams Inflation.’ How to Interpret the Headlines.
No one knows the direction of interest rates or credit spreads. But Dimensional uses information contained in bond market prices to position a fixed income portfolio for higher expected returns. "It's our job as portfolio managers at Dimensional to constantly move the portfolio towards higher expected returns." Featuring Dimensional Fund Advisors VPs, Doug Longo, Head of Fixed Income Portfolio Strategists, Joseph Kolerich, Head of Fixed Income, Americas, and Jake … [Read more...] about Fixed Income FAQ: Targeting Higher Expected Returns
Indexing offers the benefits of transparency, diversification, and low costs. Dimensional offers these advantages while also positioning strategies for higher expected returns based on global yield curves and credit spreads. "If you think about Dimensional's strategies, they have those same qualities, but they also have the advantage of being able to take information and current market prices into consideration." Featuring Dimensional Fund Advisors VPs, Doug Longo, Head of Fixed … [Read more...] about Fixed Income FAQ: Advantages Over an Index-Tracking Fund