It's time for our quarterly market review again. This quarterly material is to help you reinforce the concept of diversification, and serve as a reminder that you should view daily market events from a long-term perspective and avoid making investment decisions based solely on the news.
You could also learn why timing the market is more difficult than many investors might think from the article "Timing Isn’t Everything”, on the last two slides. Enjoy reading!
Initial public offerings (IPOs) often attract initial public interest—especially when familiar brands become broadly available to investors for the first time. However, is it a good investment strategy? Recent research done by Dimensional Fund Advisors, one of our strategic partners, may provide you some insights. Enjoy reading!
Dimensional Fund Advisors, one of our strategic partners, recently created a great piece of content for advisers like us to educate our clients. It lists 10 questions regular investors in the U.S. should ask themselves before investing, especially in the public market. The key takeaway fully aligns with our investment philosophy at X and Y Advisors, Inc. Focusing on what you can control including your financial goals, the cost of investing and your investing behavior could lead to a better investment experience and potentially a better result. Instead of only sharing with my clients, I would like to post this well-written article here and hope it would benefit all of you. Enjoy reading!
Assuming your advisor tells you that your diversified investment portfolio has an expected average annual return of X% based on long-term historical data, does it mean that your advisor does an excellent job if you see the actual rate of return for next year is higher than X%? In contrast, does it mean that your advisor is incompetent if your portfolio has a negative rate of return next year? Not necessarily. First of all, no one could predict the market and the markets are volatile, especially in the short term. You could learn more about "How Does The Volatility Of The Stock Market Affect Your Investment?" here. That post will tell you why the volatility may reward investors who remain disciplined with their investment approach in the long term. Secondly, the average annual rate of return is based on long-term historical data. Therefore, the rate of return for one year could be much higher or lower than that X%. You may get some ideas from the piece of content that I am going to share with you this week. It uses S&P 500 as an example, and it is done by Dimensional Fund Advisors, one of our strategic partners. The numbers may surprise you. Enjoy reading!
