During the past quarter, we have witnessed another amazing 3-month rebound, in addition to last quarter. The following chart shows the 3-month, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index: Market Returns for the period ending September 30, 2009 DFA Fund / Index 3 Month Return 5 Year Return* 10 […]
U.S.stocks rallied nearly 50 percent from March 9 through the end of July, but investors who had suffered through a historic 16-month bear market remained defensive. What did it mean and what are the chances for recovery? Current economic conditions make the picture even more cloudy. Homes continue to go into foreclosure, jobs continue to be lost, and unemployment hovers […]
Mad Money’s Jim Cramer issues buy and sell recommendations to his audience on each show. Just how good are those recommendations? Two professors at Northeastern University performed several statistical tests to see if Cramer beat an appropriate benchmark and whether he generated additional return for the risks he takes. The result? He adds no value, nor does he hurt those […]
It is bad enough that investors lost a lot of money in 2008 during a frightening world financial crisis. The sudden and swift recovery that began in March may be even worse for panicked investors who had barely a day to catch their breath between swings in the market. Now many investors who suffered through the bear and still regret […]
During the past quarter, we have witnessed the strongest rebound since the markets began falling in late 2007. Global stock markets climbed sharply in April and May, and then held onto most of their gains during the month of June. The following chart shows the 3-month, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to […]
When returns are poor (and sometimes even when they’re good), investors wonder if things have changed. Is this time different? Does a buy-and-hold strategy still make sense? Well, the reality is that nothing has really changed. This is just how markets work. Not surprisingly, I am advising my clients to “stay the course” (at the minimum) and to invest new […]
The Ponzi scheme run by Bernard Madoff may have cost his investors some $50 billion. For many, the big question is how could seemingly sophisticated investors be so stupid? Even more important, what lessons can we learn from their mistakes so that we can avoid the next con artist who comes along? Interviews with victims show that class status, exclusivity, […]
Investors suffering during major bear markets are tempted to “time” the market: to sell and avoid the downturn, and then reinvest before the inevitable recovery. It now seems obvious to these investors that anyone with half a brain should have foreseen last year’s credit crisis and massive worldwide fall in asset prices. By selling out ahead they would have preserved […]
Were you able to predict the global bear market that sucked trillions of dollars out of investors’ pockets in late 2008? In retrospect, it looks like it should have been easy to predict—after all, the subprime mortgage crisis had gone on for a year before stocks started crashing in October 2008. It seems obvious that the economy was collapsing and that […]
Happy New Year! Yes, you are still alive and breathing! The year 2008 was the second worst ever for the U.S. stock market. Only in 1931 did the Standard & Poor’s 500 Index fall by more than 37 percent, turning in a worse showing than 2008. Our overall returns for the full year ranged from -10% to -42%, depending on […]
