As we approach the close of another year it does well to reflect on what’s worked and why, within a larger context of capital markets over time. And to that point, equities and bonds have both contributed to strong portfolio gains year-to-date, reminding investors that asset classes can surprise to the upside. By this I mean the headline news has been mostly negative and bond investors had all but written off the year before it began. Yet here we are closing in on double digit returns from equities and half as much from bonds.
The attached article from Dimensional speaks to the importance of global diversification and having an investment thesis that works through good times and bad. Click here to read. What is shown is that the inclusion of assets classes including small and mid capitalization companies that emphasize value and profitability which contribute to portfolio performance over the long term. Pairing these drivers of returns with a globally diversified basket of fixed-income investments offers investors a portfolio that is positioned to capture much of the upside, while avoiding much of the downside. This is the primary reason for our decision to include Dimensional Funds in our client portfolios and why we believe they will continue to add value over time.
Delivering a better investment experience is what we are deeply committed to here at First Capital Financial and why we are highly selective in which Wealth Management companies we partner with. For the balance of month we will be bringing you perspectives from each of our institutional partners and how they manage your hard-earned dollars. Next week: Edgepoint. Stay tuned!