Financial Readiness: Preparing Yourself Before Disaster Strikes
Let’s contemplate some of the tried-and-true steps to help better prepare your financial affairs for when disaster strikes.
Talk of the size premium has skewed negative recently over its performance in the United States, where small cap stock indices have underperformed their large cap index counterparts over the past two decades. But as is often the case, taking a global point of view improves the picture.
Small caps have outperformed large caps handily in developed non-US markets and emerging markets. As Meat Loaf once sang, “Two out of three ain’t bad.”
The success of the size premium in international markets is a reminder of the value of global diversification. Premiums do not always move in lockstep across markets, so diversifying globally may increase the reliability of capturing them.
20 Years Ending August 31, 2024
MSCI data © 2024, all rights reserved. S&P data © 2024 S&P Dow Jones Indices LLC, a division of S&P Global. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. The Dimensional indices represent academic concepts that may be used in portfolio construction and are not available for direct investment or for use as a benchmark. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. See “Index Descriptions” for descriptions of the Dimensional index data.
This article originally appeared in Above the Fray, a weekly newsletter for Dimensional clients.
DISCLOSURES
The information in this material is intended for the recipient’s background information and use only. It is provided in good faith and without any warranty or representation as to accuracy or completeness. Information and opinions presented in this material have been obtained or derived from sources believed by Dimensional to be reliable, and Dimensional has reasonable grounds to believe that all factual information herein is true as at the date of this material. It does not constitute investment advice, a recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. Before acting on any information in this document, you should consider whether it is appropriate for your particular circumstances and, if appropriate, seek professional advice. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized reproduction or transmission of this material is strictly prohibited. Dimensional accepts no responsibility for loss arising from the use of the information contained herein.
This material is not directed at any person in any jurisdiction where the availability of this material is prohibited or would subject Dimensional or its products or services to any registration, licensing, or other such legal requirements within the jurisdiction.
“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., Dimensional Ireland Limited, DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.
RISKS
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.
DISCLAIMER
Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.
Let’s contemplate some of the tried-and-true steps to help better prepare your financial affairs for when disaster strikes.
Fed watching is an unreliable input into investment decisions because the Fed’s expected actions are already reflected in market prices.
Ask investors what kind of return they expect out of stocks in any given year, and many will say the market’s historical average return.
During a presidential election year, investors tend to seek a connection between who wins the White House and which way stocks will go.