Even though we at Hill Investment Group do our best to always Take the Long View, I have a confession to make: When it comes to investment performance, I still have days and even years that I like more than others. 2016 is one of them.

It’s not just because the annual performance numbers across many of our global markets were remarkably strong. That’s nice, but I’m more interested in the tale these numbers tell us – or, actually, re-tell us – about investing in good times and bad.

Asset allocation (still) makes sense.

After a few years of underdog performance that tested many investors’ discipline, small-cap and value stocks proved their mettle this year, globally and especially in the U.S. As Dimensional Fund Advisors observed in its recently released 2016 Market Review (emphasis ours): “Over 2016, the US small cap premium marked the seventh highest annual return difference since 1979 when measured by the Russell 2000 Index minus Russell 1000 Index.”

Market-timing (still) does NOT make sense.

2016 also was a text-book example of how investors who may have been tempted to try to capture the market’s crests and avoid its chasms would likely have missed out on the year’s ultimately rewarding returns. To share Wes Wellington’s comments from his “Look Back at 2016“:

“Every year brings its share of surprises. But how many of us could have imagined that 2016 would see the Chicago Cubs win the World Series, Bob Dylan receive the Nobel Prize in Literature, Donald Trump elected president, and the Dow Jones Industrial Average close out the year a whisker away from 20,000? The answer is very few—a lesson that investors would be wise to remember.”

Dimensional’s report further notes (emphasis ours): “Most of the performance for small caps came in the last two months of the year, after the US election on November 8.” This represents another outcome that would have been difficult if not impossible to predict without a great deal of luck on your side.

Diversification remains your best bet.

Almost two years ago to the day, following a year in which U.S. large-cap stocks had continued to outperform most other asset classes, I posted this reminder about the importance of remaining diversified: “Clearly, the tables can turn abruptly and destructively for the nondiversified investor.”

With small-cap and value stocks’ strong resurgence, 2016 reemphasized this same lesson in a fresh way. It tells us that diversification remains as important as ever in a world in which near-term prognostications remain a matter of luck, not skill.

As Oaktree Capital’s Howard Marks expressed in his “opinion of opinions” in a recent post:

“There are no facts about the future, just opinions. Anyone who asserts with conviction what he thinks will happen in the macro future is overstating his foresight, whether out of ignorance, hubris or dishonesty.”

What does 2017 have in store for us as investors? In all honesty, I don’t have the hubris to guess.

While nostalgia can be an effective way to market beer, in my opinion, it’s no way to manage a brewery’s 401(k) plan. At least not if it hearkens back to a time when it was routine for plan sponsors to load up a 401(k) plan with high-cost investment selections and expect participants to sort it out for themselves.

This is what I fear has happened when InBev Anheuser-Busch (A-B) proudly announced nine additions to its 401(k) plan investment current lineup of low-cost, passively managed index funds. Much to my disappointment, the additions represent a confusing mix of mostly active funds.

When I was assistant treasurer at A-B in the mid-80s, I was proud to help the company become one of the first in the nation to replace all active funds with index funds in both its 401(k) plan lineup and pension plan investments. Our early leadership has since become common practice, buttressed by the empirical evidence on how to advance retirement plan participants’ successful outcomes.

There is a glimmer of hope in the mix. Dimensional Fund Advisors appears to be among the firms A-B announced in its new “active management” lineup. While Dimensional offers a different strategy from traditional indexing – something we refer to as “evidence-based investing” – it’s not traditionally active either. Dimensional is itself a leading advocate of avoiding largely fruitless attempts to beat the market through stock-picking or market-timing.

Even with this positive exception, I feel the new lineup still represents an unfortunate shift, sacrificing better choices on the altar of more choices.

Maybe I’m being nostalgic, but the A-B I knew, knew better.

There’s so much good news to share about the continued ripple effect that “Odds On” is making around the globe, it’s hard to know where to begin. Here are a few highlights.

Now Hear This: “Odds On” Audiobook, Narrated by Matt Hall

If you’re looking for a way to thank friends, family and colleagues this holiday season, think about stuffing their sock with the audio version of “Odds On.” Two reasons why:

1. Initially, we hired a professional voice artist to narrate the book. That just didn’t feel right, so we replaced pseudo-Matt with the real deal, personally telling his tale.
2. As we post this blog, the audio version is priced at $3.49, so you can splurge on one for yourself while you’re at it. Enjoy!

“Odds On,” a Dutch Treat

Partnering with several like-minded colleagues in the Netherlands, “Odds On” is now available in Dutch! Bringing the world closer together through technology and evidence-based investing, Matt was honored to participate in a well-attended intercontinental web conference in the Benelux region (Belgium, the Netherlands and Luxembourg). In particular, we’d like to thank Robert Van Beek of About Life & Finance B.V., who translated the book and facilitated the conference; and Jeffrey de Haan and David Swanwick of Dimensional Fund Advisors’ Benelux and U.K. offices, respectively.

Hands Down, Thumbs Up, Near and Far

Speaking of global outreach, we’ve received so many heartwarming endorsements from groups and individuals whose lives have been touched by Matt’s book. Every one of them is special to us, but to name a couple of recent highlights:

1. The respected INSEAD Business School for the World® has featured “Odds On” on the bestseller page in their library, currently at #7 as we write this post.
2. We also were touched to see financial tech-head Greg Elliott mention “Odds On” in an Orion software newsletter interview (page 8).

To the general public, that second one may not seem like such a big deal. But among us financial types, Orion is a very familiar name as one of our most important software service providers. It’s fun to see our message spread in ways we could not have imagined when we began the journey.