We encourage investors to mostly look past annual returns and keep their eyes on the market’s long-term performance. But it can be helpful to consider annual reports too, as long as we do so within this greater perspective.

Speaking of perspective, there’s also global versus domestic viewpoints. The Dimensional Fund Advisors chart below, ranking 2017 return sources, illustrates why we continue to believe it’s best to globally diversify your risks and expected returns around the world. While the U.S. S&P 500 performed nicely in 2017, returning just under 22 percent, notice how many international markets did even better, with emerging markets significantly outpacing all the rest.

Of course, from one year to the next, the reverse can easily be true. So, to quote Nick Murray, an industry thought leader:

“We will never own enough of any one idea to make a killing in it. We will never own enough of any one idea to risk being killed by it.”

This is what diversification is for.

“Instead of trying to figure out if you should #Bitcoin, or #Hedgefund, or #Index … spend that time getting clear about why you’re investing in the first place. When the WHY is clear, the WHAT becomes simple.”

– Carl Richards, Behavior Gap

“April showers bring May flowers.” Can the same be said about the recent GOP tax reform and stock market returns?

I don’t know and neither does anyone else!

What does the evidence tell us?

Dimensional Fund Advisors’ Apollo Lupescu answered this very question when he joined us last fall for presentations in Houston and St. Louis.

Relive it here.

Do politicians affect the market? from Hill Investment Group on Vimeo.

Apollo asserts, “The tax policy, the president and the politics have much less to do with the market than the fundamentals.” We agree.