Insights

It’s easy to view the stories of market speculation that have dominated the news recently as cautionary tales for individual investors. But we can also look at the current moment as an opportunity to welcome a new group of investors to the market: those who have been drawn in by all the high-stakes action, and yet may want a consistent, long-term investment solution that doesn’t keep them up at night. This is probably a good time to mention that investing
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GameStop has been front and center in the financial news on account of the stock’s significant price volatility over a few weeks. And that has put it top of mind for many clients, as we’ve been fielding questions on how GameStop’s volatility was handled in our portfolios. This incident serves as an opportunity to highlight how Dimensional’s investment process is built to handle developments within markets, given that many of our portfolios held GameStop in January. GameStop’s rise and fall
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KEY TAKEAWAYS FANMAG returns have been extreme relative to their contemporaries, but not their predecessors—their performance has been in line with the average top performers throughout US stock market history. The FANMAGs were the big winners from a broader group of large tech companies, most of whom have lagged the market. Following the popularity of the FAANG stocks, FANMAGs are the current fad. But history suggests fad-based investing is no substitute for broad diversification and a consistent approach. A handful
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Since 1926, the US stock market has rewarded investors with an average annual return of about 10%. But it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between. Annual returns came within two percentage points of the market’s long-term average of 10% in just six of the past 95 years. Yearly returns have ranged as high as up 54% and as low as down 43%. Since 1926, annual returns have been positive 70
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Schedule a time with your Independent CERTIFIED FINANCIAL PLANNER TM to discuss the following 10 key tax planning items: Review your W2 and 1099s. Your 1099s and W2s provide valuable information about your earnings and investing habits. If your salary has increased, have you also increased your savings and investment rates? Apply income/salary to living expenses, and bonuses/stock options proceeds to wealth building goals. Review the tax efficiency of your investment strategy. If your mutual funds made sizable capital gains
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A recent flurry of return spikes for a handful of US stocks has captivated investors and non investors alike. Wall Street news trending on social media even amid an NFL playoff season is indeed an unusual event. So, what should investors make of these dramatic price movements? A good place to start is with prices themselves. Prices reflect discount rates applied to the expected future cash flows of companies. One can interpret these discount rates as the expected return demanded
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Dimensional’s 2020 analysis of US-based mutual funds shows that only a small percentage of funds have outperformed industry benchmarks after costs—and among top-ranked funds based on past results, only a small percentage have repeated their past success.