Predicting Markets

Article Tags:


Predicting Markets - World Flags at Alman Partners True Wealth Mackay


Imagine devising an investment strategy based on predicting how each country (Developed Market) will perform from one year to the next and the historical returns for the past 20 years were ranked as per the chart below. Each colour represents a different country, and each column is sorted from the highest-performing Country/Market to the lowest. Can you see any discernible pattern to work with?


Predicting Markets - DFA Annualised Returns by Country at Alman Partners True Wealth Mackay


This article from Dimensional Fund Advisers reminds us that we don’t need to predict which markets are going to be the highest performers and we can improve the reliability of our investment expectations by diversifying across all markets.


Paul Shepherd (CFP® Professional, BEng, DipMgt, DFS[FP], AIF®) is an Authorised Representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Performance data shown represents past performance or simulated performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Any information provided to you was purely factual in nature. It has not been taken into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to purchase or invest in a financial product. Please contact us if you would like to obtain financial product advice.