Investors can no-longer rely on the “so-called value premium to continue in the future,” according to a recentMarketWatch article by Paul Merriman, author and founder of Merriman Wealth Management.

While Merriman believes that value investing is still a good option for investors, he writes, “there’s very little that I can guarantee about future investment returns, and none of it is useful if you’re trying to gain an edge on your fellow investors.” He reiterates that future returns are difficult to predict and won’t be exactly the same as past returns, adding, “At some point you will know exactly what you should do with your money this week to get the best return. But by the time you get that knowledge it will be too late to take advantage of it.”

Merriman offers insights on value investing based on an analysis of returns over the past two decades:

·      Small-caps outperformed large-caps, “but just barely.”

·      Value outperformed growth.

·      Emerging markets outperformed the S&P 500 and the U.S. total market index.

He reiterates: “My takeaway from these and many other numbers from the past is that recent performance (even as long as 20 years) is a poor guide to future performance.”

Merriman concludes: “No, I don’t think value investing is dead. Neither is stock investing or small-cap investing. The hoped-for results won’t show up in every year or even in every decade.” His advice for investors, he writes, is to diversify and be patient. “Don’t pull all your money into any single asset class. And for sure, don’t jump around from asset class to asset class depending on which way the investment winds happen to be blowing. Make a sensible plan that is supported by long-term history. Then put that plan into practice and stick with it.”