If studying financial markets for 50 years teaches you anything, it's to keep things in perspective. During times of great uncertainty, like we're experiencing now, investors may feel tempted to project today's headlines forward or forget the useful lessons we've learned from the past... Read Dimensional Executive Chairman and Founder David Booth's full essay on Value investing HERE. Originally published in MarketWatch. DISCLOSURES This material is in relation to … [Read more...] about David Booth on Value Investing
Market Returns Through a Century of Recessions
What does a century of economic cycles teach investors about investing? Click HERE to explore Dimensional's interactive exhibit to examine how stocks have behaved during US economic downturns. Past performance is no guarantee of future results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. The information in this document is provided in good faith without any warranty and is intended for the … [Read more...] about Market Returns Through a Century of Recessions
What Happens When You Fail at Market Timing
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
When Rates Go Up, Do Stocks Go Down?
Unlike bond prices, which tend to go down when yields go up, stock prices might rise or fall with changes in interest rates. Should stock investors worry about changes in interest rates? Research shows that, like stock prices, changes in interest rates and bond prices are largely unpredictable.[1] It follows that an investment strategy based upon attempting to exploit these sorts of changes isn't likely to be a fruitful endeavor. Despite the unpredictable nature of interest rate changes, … [Read more...] about When Rates Go Up, Do Stocks Go Down?