Watching the roller coaster ride of the stock market can make many investors queasy. Even though the stock market has, historically, always trended up, investors can’t help but feel uneasy as they watch the values of their portfolios rise and fall with the market. When portfolios are limited to one type of asset, its value will reflect the volatility of that asset class. But, when portfolios are allocated among several different asset classes, the variable...
Unquestionably the stock market has experienced severe volatility in recent months. But a review of the historical record provides a clearer perspective on market volatility over the decades that actually favors investors who manage to hang on even in the worst of market declines. Since World War II, the stock market has experienced, on average, an intra-year decline of 14 percent each and every year. In that same period, the market ended lower, on average...
We mailed a version of this and thought it would be a good piece to begin our blog. Each month we’ll be posting a new source of timeless wisdom set within the current economic context. As we look back on the financial markets in 2015, what really stands out is how poor returns were across the globe and across asset classes (stocks, bonds, commodities, etc.). Among the major global stock markets, the United States was...