Video: Recent Market Volatility
Dimensional Fund Advisors
Over the last 40 years, when the U.S. yield curve inverted as it did this week, the stock market was up 66% of the time 1 year later and 33% of the time 3 years later. Globally, the market was up 86% of the time 1 year later and 71% of the time 3 years later…(Source: DFA)
While volatility is never fun, it’s a normal part of investing and the message for dealing with it is almost always the same: stay the course and follow our long term plan.
When things get rough, the market starts charging its price for admission….If it were easy, everyone would do it.
Key Quote“If there was no volatility associated with investing, it would be hard to make the argument on why we would expect a higher return”
Watch Here: : https://videos.dimensional.com/share/v/1_g9ii8mde
Tweet/Quote: Peter Mallouk
"Every day, 217,000 people escape extreme poverty, 325,000 gain access to electricity and 300,000 more gain access to clean drinking water. Source: Max Roser/Oxford University.
For all the problems in the world, there has never been a better time to be alive or to invest.”
There can be a lot of reasons to feel like current state of our world isn’t great... After all, news outlets didn’t report the 40 million commercial flights that landed safely in 2016 —but the 10 flights that ended tragically were headline news. Eyeballs aren’t traditionally drawn to positive stories as much as negative ones; and eyeballs drive advertising revenue for the news outlets.
I recently finished reading Factfulness by Hans Rosling, which is full of data outlining the many ways in which the world we live in is amazing. Clearly there is room for improvement —and we should strive for that— but taking time to be grateful is important.
In much the same way that Factfulness lays out data about the world we live in, recently I saw this tweet from Peter Mallouk, the co-author of Unshakeable (with Tony Robbins) and I felt it was uplifting.
Key Takeaway: In this world, you often find what you’re looking for.
Link to Tweet:https://twitter.com/PeterMallouk/status/1160939474169290757?s=20
Podcast: Tim Ferris & Peter Mallouk
Peter Mallouk gets mention in 2 out of 3 of this week’s “things". The reason: he runs one of the biggest independent fiduciary firms like ours in the country and he and I share the same philosophy about investment strategy and financial planning. This podcast with Tim Ferris digs into many investment topics including real estate, cryptocurrencies, gold, asset allocation, etc.
Key Takeaway: Mallouk and I see eye-to-eye on virtually every investment-related topic. As an example, much like myself, he doesn’t advocate for gold or cryptocurrencies or any other currency or commodity. The reason: those investments don’t produce value while we hold them. In the case of stocks, bonds, and real estate, we can collect dividends/interest/rent even if the price of the underlying asset doesn’t increase.
Where to listen:
—I hope you enjoy the week ahead! If you see anything this week that you think I’d find interesting, please send it along.