Businesses, Stock Markets & the Economy Will Inflation Hurt Stock Returns? Not Necessarily. (Dimensional) Your Finances & other Wealth Management links After the Fact (Morgan Housel) “… all wealth relies on the ability to receive an extra dollar and say, “I could spend this, and spending feels great, but I’m not going to.” It’s the same as turning down a big meal after working out, and it’s just as hard. All great things are...

Businesses, Stock Markets & the Economy Diversification Isn’t Undefeated But It Never Gets Blown Out (Ben Carlson) “There are different levels of losses in the markets right now: If you own value stocks, it’s not too bad (down 2-3%) If you own an S&P 500 index fund, it’s a minor correction (down 6-7%) If you own the Nasdaq 100, it’s a correction (down 11-12%) If you own small caps, it’s a bear...

Businesses, Stock Markets & the Economy Investment Lessons the Markets Taught in 2021 Part 1 (Evidence Investor) "Lesson 1: Valuations cannot be used to time markets." "Lesson 2: Active management is a loser’s game." "Lesson 3: Don’t make the mistake of recency; last year’s winners are just as likely to be this year’s dogs." "Lesson 4: Gold is not an inflation hedge over your investment horizon." "Lesson 5: The investment world...

Businesses, Stock Markets & the Economy Reframing Volatility (Michael Batnick) “When markets get volatile, we often hear people say, “ignore the noise.” But telling people to ignore the noise is telling people not to be people. It’s not practical advice. It’s important to contextualize short-term losses, but we can do better than this. Morgan Housel spoke about this idea, helping to reframe how we think about bear markets and recessions. If you view volatility...

DIMENSIONAL’S MARKET REVIEW (Q4 2021 & TY 2021) It’s a wrap! 2021 market performance numbers are now available for the fourth quarter and the total year. Today, we share Dimensional Fund Advisor’s latest Quarterly Market Review, along with their 2021 Annual Market Review. “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...

Businesses, Stock Markets & the Economy As Much of 2021 that Fits on One Page. 2021 was an extraordinary year in many ways. While unlikely that any single chart could convey what investors experienced, Avantis has assembled a few data points and headlines for a trip down memory lane. (PDF) Underestimate the U.S. Economy at Your Own Risk (Ben Carlson) “Unfortunately, after diversifying and creating a plan that fits within your risk profile and...

Businesses, Stock Markets & the Economy 2021 Was One of the Best Years in the Stock Market History (Ben Carlson) “…if you were a buy-and-hold investor in the U.S. stock market in 2021, give yourself a pat on the back. You just lived through one of the greatest years of all-time in the stock market. It’s not always going to be this easy.” 10 Lessons from 2021 (Michael Batnick) Your Finances & other Wealth Management...

Businesses, Stock Markets & the Economy Why a Stock Peak Isn’t a Cliff (Dimensional) “Many investors may think a market high is a signal stocks are overvalued or have reached a ceiling. But they may be surprised to find out that the average returns for the S&P 500 Index one, three, and five years after a new market high are similar to the average returns for the index over any one-, three-,...

Businesses, Stock Markets & the Economy Corrections, Retracements, Crashes & Dips  (Barry Ritholtz) Source: Barry Ritholtz “Whenever we have a one-day event that looks different from the prior few days or weeks, I wonder how the language used might impact investors . . . Is a “Sell off” worse than a “Pullback”? Should people be more worried about a “Correction” than a “Dip”? What about the plunges, overbalances, surprises, lurches, debacles, ruins, depressions,...