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Swing in Small Value Stocks Shows Benefits of Staying the Course

Value stocks, or those with low relative prices, have outperformed higher-priced growth stocks in the US over the long term. Similarly, the stocks of smaller companies have fared better than the stocks of bigger ones in the US. But the performance of these stocks has varied at different points in history. As the global pandemic rocked markets in March 2020, large growth stocks outdid small value stocks by 19.6%, the greatest monthly margin on record. From March through September, the
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Stay Invested to Reap the Harvest

Historically bad to historically good Value investors who chose to stay the course through the last few years were finally rewarded for their discipline! Although it’s hard to believe, if we back up just a few months, the one-year period ending September 2020 was the worst return ever for small value stocks relative to larger, more growth companies, with small value underperforming by a whopping 52%. The three-year returns were also abysmal, with small value underperforming large growth by nearly
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Are Concerns About Inflation Inflated?

KEY TAKEAWAYS Recent Dimensional research suggests that simply staying invested helps outpace inflation over the long term for a wide range of asset classes. The protection offered by inflation-indexed securities still appears to be the most effective for investors who are particularly sensitive to unexpected inflation. Our analysis of data from 1927–2020 covers periods with double-digit US inflation as well as periods with deflation. US consumer prices were up by 5.4% for the year ending June 2021, the largest annual
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Going Up: The Return of Inflation and How to Manage It

There is no way to hide that prices are rising for the goods and services we use. A day doesn’t seem to pass without hearing of a new shortage, a supply disruption, or an increase in demand that is impacting the price we pay for something. From a shortage of semiconductors affecting the price of new and used cars to higher oil prices raising the cost of gas and backups at ports restricting supply, it is no wonder that inflation
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Impact of National Debt on Equity Markets

If you’re like most of us, it’s hard to not keep an eye on how the U.S. economy is recovering from everything that’s happened since the start of 2020. However, it’s also easy to fixate on the gloomier economic indicators and try to interpret them as potential warning signs for the recovery and our portfolios. A popular one as of late is federal government debt, which reached a record $28 trillion in March. You might hear pundits and colleagues suggesting
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Don’t Let the Perfect Be the Enemy of the Comfortable

One of my favorite Warren Buffett quips reads, “The most important quality for an investor is temperament, not intellect.” Not a greater example of this exists than in the introduction of Morgan Housel’s fabulous book, “The Psychology of Money.” In a nutshell, he describes two individuals. One is a first-generation high school graduate and lifelong janitor and gas station attendant. The other is a Harvard-educated and University of Chicago MBA graduate who was chosen for Crain’s “40 under 40” list
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Saving Strategies for Your Child or Grandchild’s Future

It is no secret that kids can cost a pretty penny – raising a child from birth to 18 years of age can eclipse $230,000, an annual expense of nearly $13,000. Once you get past parenthood’s sticker shock, as well as the early sleepless nights, many parents (and grandparents) start thinking about preparing for future expenses. Many investors with the benefit of hindsight understand what they missed out on by not getting started earlier, which often leads them to want
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Global Diversification Can Make a World of Difference

Investing in multiple countries can deliver more reliable outcomes over time, helping investors stay on track toward achieving their long-term goals. The US stock market is the biggest in the world, but investors who ignore other global markets may miss out on a wealth of opportunity. Stocks of the roughly 17,500 companies trading outside the US represent nearly half of the world’s $74 trillion equity market. When determining where to invest, a country’s size, population, or gross domestic product may
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THE ONLY RIGHT WAY TO VIEW AN ASSET

You’ve got to look at the portfolio as a whole, not just position by position. And if you’re trying to reduce the volatility or uncertainty of your portfolio as a whole, then you need more than one security obviously, but you also need securities which don’t go up and down together. — Harry Markowitz   Steve Nash played 18 seasons in the National Basketball Association (NBA), where he was an eight-time All-Star and a seven-time All-NBA selection. He was also
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Value vs Growth – A Brief Description

Growth companies are usually newer, more technologically driven, up-and-coming businesses with sky-high investor expectations. They are usually considered the industry disruptors that may or may not continue to innovate and expand. This can make investing in these companies more speculative in nature, because a lot of today’s success is to be determined by tomorrow’s earnings. Value companies, on the other hand, tend to be more mature companies that may be undervalued based on their proven long-term profitability and strong foothold
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