What a volatile year for the markets (so far)
We want to remind you that when it comes to your portfolio, it pays to take a deep breath, relax, and focus on the things you can control. These include choosing to invest in low cost investments like DFA mutual funds and GWK's bond strategies, deciding on how much risk to take by allocating between equities vs. fixed income, being diversified within those investment choices, and keeping your upcoming 2 years of cash flow needs as cash and not invested in the markets.
Below are the year-to-date performance listings of DFA's mutual funds at 4 different dates from this calendar year so far. At each of these dates, we sent out an e-mail newsletter to clients attempting to address any concerns you may have had about the markets:
1. January 22, 2016 - Markets were down 7-10% year-to-date in just 3 weeks of the new year! The media were saying we were in a "bear market". Look at all the 'red' in the DFA listing! We sent out a newsletter around this time with articles discussing bear markets and why these are natural for equity investors to experience.
2. April 27, 2016 - Equity markets were now all positive year-to-date. All the 'red' negative returns in the 1/22/2016 listing were now all in the 'black'. We sent out a newsletter titled "What a difference a few months can make in the stock market".
3. June 27, 2016 - This date reflects what the markets looked like after 2 full trading days since the UK voted to Brexit on 6/23/2016. Almost all of the DFA equity funds' year-to-date gains went back to being in the 'red', some in a big way.
4. July 21, 2016 - Here's where things stand today. A handful of funds are still in the 'red' year-to-date; otherwise, markets are generally in the 'black' for the year with several markets and the corresponding DFA funds up big.
As you know, we have no idea what's going to happen to the markets, to interest rates, or to the US Presidential Election. Nor are we going to make investment suggestions based on predictions about these, or any other, future events. Doing so would be the definition of 'speculating'. Rather, we're going to focus on what we can control and follow the Science of Investing for our investment suggestions for your portfolio.
These listings of performance during the year remind us not to get swept up in the short-term volatility of the market for making investment decisions. We thought you might find this useful and interesting as a reminder for the success of your long-term investment planning.
If you have any questions about this, or any other aspects of your planning, please let us know. Thank you again for having us be your advisor, and we hope you're having a wonderful Summer!
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