Stock markets ended 2019 with a bang, buoyed by an improved economic picture, alleviated trade tensions, a dovish Fed, and solid corporate earnings. The markets seemed impervious to previous worries such as impeachment, continued Brexit drama, and Middle East tensions.
DFA: How Markets Work and the FAANG Mentality
Did you know that if you had owned Facebook, Amazon, Apple, Netflix, and Google, also collectively referred to as FAANGs, during the decade ending in 2018, you would have more than doubled the return of the broad stock market? While that may be surprising to some, what is even more interesting is that it isn’t uncommon for a small number of stocks to drive a large portion of the overall market return. See more in this month’s Issue Brief from DFA, How Markets Work and the FAANG Mentality.
DFA: Value Judgments: Viewing the Premium’s Performance Through History’s Lens
Value stocks have underperformed growth stocks by 3.4% a year for over a decade . While it may be a valid question to ask if tilting a portfolio to value still makes sense, it may be helpful to understand first how recent performance stacks up historically. So how do the returns for value and growth stocks over the past decade compare with their long-term averages?