While speaking with a cardiologist recently, my eyes were opened to the “Simple, but not Easy” strategy being applied in the medical profession. We communicate frequently about the importance of this strategy in personal finance so it was fascinating to see it play out in another profession. I thought it would be helpful to share this experience (Don’t worry, no one was hurt in this process!).
Global stock market leadership historically has alternated between U.S. and international markets. Rather than choosing one class of stocks over the other based on past performance, focus on the potential long-term benefits of a global approach.
Each January, economists and investment professionals make their yearly guesses of where the stock market will be the following twelve months. I say guesses because that is what they are. Unfortunately, predicting the stock market direction in the short-term is comparable to your favorite superhero’s superhuman power.
This report features world capital market performance for the past year.
Long-term stock market returns definitely do not come in nice, straight lines.
As 2019 approaches, and with US stocks outperforming non-US stocks in recent years, some investors have again turned their attention towards the role that global diversification plays in their portfolios.
Larger movements in the daily stock market prices are back. The reports we read in the paper, hear on the radio and see on the TV all say we should be doing something.
From September 30–October 10, the US market (as measured by the Russell 3000 Index) fell 4.8%, resulting in many investors wondering what the future holds and if they should make changes to their portfolios. While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing.
“Purpose of the margin of safety is to render the forecast unnecessary.” – Ben Graham
If you are feeling uneasy about your investment performance during these periods of volatile market activity, watch this video, “Tuning Out the Noise”, to help remind you of the importance of remaining disciplined during uncertain times.