Dimensional Fund Advisors, the manager of many of the mutual funds in our client portfolios, wrote this comprehensive economic and investment review of the year 2010. I think you will find it interesting.
The past year offered an interesting mix of positive and negative news as investors around the world eagerly anticipated signs of economic recovery and financial stabilization. While most financial markets logged positive returns for a second straight year, investors had to endure a host of troubling news and pessimistic market predictions. Even eight months into the year, the S&P 500 Index was down 5.9%. But diversified, long-term investors were rewarded with attractive market returns, as the S&P 500 closed the year up 15.06%, with 10.76% of the gain coming in the fourth quarter. (Returns are in US dollars throughout this report.)