We’re not ones to make stock market forecasts – never have been, never will. Still, had we been tempted to lose our resolve last March, we might have presumed we’d see some pretty awful returns for at least the next quarter or two.

Wow, would we have been wrong. Our country has not yet moved past the many personal, social, and economic ravages wrought by COVID-19 and related concerns. But as Dimensional Fund Advisors reports, global equity markets posted positive third-quarter returns. Most year-to-date returns were similarly satisfying. As we wrote last quarter, you just never know … which is why we don’t try to guess.

On the flip side, we continue to wait for value stocks to deliver on improved long-term returns, as expected. If you were able to stay put during last March’s market plummet, we suggest employing the same patience to this equally sound, longer-term investment strategy. As Dimensional explains, “Value investing is based on the premise that paying less for a set of future cash flows is associated with a higher expected return. That’s one of the most fundamental tenets of investing.”

Even well-reasoned fundamentals don’t guarantee success. But until random market predictions become more reliable than decades of solid evidence, we suggest sticking with the evidence.

VIEW PDF: Quarterly Market Review (QMR) – Q3 2020

Sheri Iannetta Cupo
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