Returns Through a Century of Recessions

Here’s a fascinating analysis from our friends at Dimensional Funds. Remembering my grandfather’s experiences as a growth stock investor in the late 1960s, and having lived through the 70s and 80s as an advisor, two facts stand out:

1) The potential downside losses when a bubble bursts can be much larger than we’ve seen so far in this year’s bear market.

2) The stock market eventually recovers from even the most brutal bear market declines.

As an investor with a higher risk tolerance*, I plan to keep most of my own portfolio in stocks, and I also plan to keep most of my funds in less-speculative, cheaper value stocks. 

*Some of our clients have a lower risk profile and may have less stocks than I do.

By James S. Hemphill, CFP®, CIMA®, CPWA®/ Managing Director & Chief Investment Strategist

Jim has been a CERTIFIED FINANCIAL PLANNER™ professional since 1982. Jim specializes in complex wealth transfer and retirement transition strategies and coordinates TGS Financial’s investment research initiatives.

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