SageBroadview Quarterly Market Review: Q1 2017
Wherever You Go, Go Diversified
We’ve got two comments inspired by Dimensional’s first quarter 2017 market review. Both of them lead to the same, sage solution: global diversification remains an investor’s best friend.
First, let’s talk about this quarter’s relatively stellar, double-digit emerging market returns. Dimensional’s quarterly report shows what The Wall Street Journal’s Jason Zweig also covered in his recent piece, “Why Emerging Markets Are Looking Better Than the U.S.A.” We’re with Zweig when he advised against piling into emerging market funds because they’ve been on a tear (as droves of performance-chasing investors have recently been doing): “Investing in emerging markets isn’t a bad idea, but rushing to do so is.”
The message is the same for U.S. and developed international stock markets. As Dimensional described, “Among developed markets, Denmark was number one in US dollar terms in 2015 with a return of more than 23%. But a big bet on that country the following year would have backfired, as Denmark slid to bottom of the table with a loss of nearly 16%.”
Bottom line, you never know where the next hot returns are going to be served up next. That’s why, this and every quarter, most of us are best served by spreading our investments around, ready to grab those global returns as they arrive.
SAGE Serendipity: The 2017 Pulitzer Prizes were announced on Monday. You could spend an entire day on this web page reading all the work and looking through the photography. Make sure you scroll down the list and don’t miss the letters, music, and drama awards awards! Enjoy!