The Markets Performance in ’17 and what to consider for 2018
Welcome to 2018. Time passes more quickly the older I get and 2017 zoomed past. New Years resolutions have not been my thing historically…but I am tiptoeing towards one for 2018…being more communication forward about what’s going on in the 360 Wealth Resources world…here are some thoughts and forward looking ideas to consider.
Key market return* notes…
- Diversification outside of the US markets offered greater returns.
- Emerging Markets outperformed Int’l Markets 24% to 37%.
- US Large Growth outpaced US Large Value markets 27% to 15%.
- US Large cap markets outperformed the US Small Cap markets 22% to 11.50%.
- Int’l Small Cap Markets outperformed Int’l Large Markets 30% to 25%.
- Emerging Markets outperformed Domestic Markets 37% to 22%.
- International Markets outperformed Domestic Markets 25% to 22%.
- The DFA International Core portfolio outperformed the Int’l Index by around 3%.
- The DFA Fund US Core 2 despite being weighted to smaller stocks underperformed the USA market index just 19% to 21%.
- The DFA World Core portfolio outperformed the World Index 30% to 24%.
*Note that these returns are rounded to closest whole #.
- A “Reversion to the mean” opportunity…International markets and Domestic Markets offer the same risk and the returns will equalize.
- The 5 year average annual return for Markets outside the USA 7% and the USA’s 16% performance offer a significant “reversion to mean” opportunity.
- The 10 year average returns 2% International and 8.6% USA confirm that International diversification offers a long term performance opportunity.
- Interest rates are rising for mortgages which were up around 0.50% inn 2017.
- Shorter term interest have risen for savings accounts as the Fed increase rates 3 times in 2017.
- 4 of the Banks used for clients short term cash offer rates well over 1%.
- Inflation is continuing to only inch upwards changing 2.17 from 2016 which had a 2.06% rate.
- In 2018 one positive form of inflation may move higher as the supply of workers shrink – wage inflation.
Stand by throughout 2018 for perspectives, good ideas and commentary on economic and market issues that offer you an advantage…and if something is on your mind, do share.