‘FT Adviser’: Mamdouh Medhat Examines How Inflation Affects the Value Premium
In his recent FT Adviser article “Trying to Time the Market Is a Losing Game,” Mamdouh Medhat, Senior Researcher in Dimensional’s London office, examined the idea of shifting asset classes based on changing economic factors. Medhat evaluated the relationship between value investing and inflation, saying that “During inflation’s surge last year people asked whether it was a good time to get into value stocks. With inflation broadly expected to fall this year, they will ask whether it is a good time to get out of value stocks.”
Drawing on several studies of long-term market returns during various inflation cycles, Medhat concluded that “market timing is likely a loser’s game. If you are looking for signals that indicate this asset will do better than that asset, you can bet that the market will get there before you and will price it in.”
You can read the whole article in FT Adviser here.
This article refers to the US Inflation and Global Asset Returns Research paper.
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