Introducing Dimensional Fund Advisor’s 2020 Market Review
Now that 2020 is a little more comfortably in our rearview mirror, what would you say were its key characteristics?
Tumultuous. Bleak. Troubling. These are some of the descriptors Dimensional Fund Advisors used in its annual market review for 2020, which we share with you today. That said, the review also showcased other, finer characteristics brought to life during this remarkable year: Resilience. Hopeful. Affirming.
We encourage you to explore Dimensional’s full report on this unprecedented year. It’s filled with evidence of the hopes, fears, challenges, and opportunities that continue to shape the world today. It was also a year of surprises. First, there was the steep market decline nobody saw coming when COVID-19 first gripped the world in Q1. Then came the unexpectedly positive annual returns among most global asset classes, despite continued pandemic conditions.
What’s an important take-away? Make no mistake about it: The only sure way to capture the full long-term expected returns of equities in a diversified portfolio is to be willing to endure the temporary declines, no matter how uncomfortable they may be at the time.
As Dimensional’s report concludes: “2020’s economic and market tumult demonstrated that markets continue to function and that people can adapt to difficult circumstances. The year’s positive equity and fixed income returns remind that, with a solid investment approach and a commitment to staying the course, investors can focus on building long-term wealth, even in challenging times.”
What questions can we answer for you as you review Dimensional’s report? How can you best position your own investment portfolio according to these timeless tenets? Let us know! We’d be happy to schedule a Cogent Conversation with you to continue the discussion.
We Can Help You with Market Reviews
Markets can sometimes feel like bedlam, but our mission never changes: We seek to offer a consistent voice of evidence-based reasoning for your investing. We want to advise you in your quest to earn and preserve personal wealth during confusing times (which is to say, almost always). We can help you analyze where you are so you can plan for a better future. We can answer questions, allay concerns, and keep you headed in the right direction.
Call us today so you can begin this year knowing you are taking the best actions to reach your financial goals.
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