In the past several weeks, markets have cooled off just a bit from the nearly non-stop bull market over the last 18 months. Here are a few keys things to remember about investing during these periods (and a short video):

  • It is normal for markets to incorporate “new” information into stock prices. The recent Omicron variant has some market participants reassessing their view of companies’ cash flows going forward.
  • We’ve experienced several market highs recently. Just because the stock market reaches a new high doesn’t necessarily mean the returns going forward are doomed (see 1 min video below…it’s from March 2020 but still VERY applicable).
  • It is normal for markets to decline 10%. In fact, since 1979, about 50% of the years have intra-year declines of 10% or more. And about 33% of the time, markets have intra-year declines of 15% or more. In spite of these intra-year declines, 34 of the past 41 years have ended with positive returns.*

Click on video link below:

https://my.dimensional.com/video/2291/dimensional-on-recent-market-volatility

*https://www.dimensional.com/us-en/insights/recent-market-volatility

DISCLOSURES

Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Diversification does not eliminate the risk of market loss.

There is no guarantee investment strategies will be successful. Investing involves risks including possible loss of principal. Investors should talk to their financial advisor prior to making any investment decision. There is always the risk that an investor may lose money. A long-term investment approach cannot guarantee a profit.

All expressions of opinion are subject to change. This article is distributed for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their financial advisor prior to making any investment decision.

UNITED STATES: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Posted in 30s, 40s, 50s, 60s, 70s, Investments

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