Outlook 2022: Wes Crill (Dimensional Fund Advisors)

January 7, 2022

By Wes Crill, Head of Investment Strategists at Dimensional Fund Advisors

What are the biggest opportunities and threats for investors?

‘Many see equity market valuations flirting with all-time highs as a potential challenge for generating returns in the future. But one person’s challenge is another person’s opportunity. There is weak support that market valuations are helpful for asset allocation decisions – stock returns are just too volatile to gain insights on when expected returns have increased or decreased.

And history tells us that investors giving up on stocks after strong market run-ups would have led to regret more often than not. For example, the S&P 500 Index ended at an all-time high 30% of the months during the 94-year period ending December 2020, and the average return over the following 12-months was 13.9%. For the disciplined investor, stock markets remain an advantageous opportunity to grow wealth regardless of recent market performance.’

For the disciplined investor, stock markets remain an advantageous opportunity to grow wealth.