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"Dimensional Fund Advisors, 2202" Case Study Do size and value effects mean that any small stock...

"Dimensional Fund Advisors, 2202" Case Study

Do size and value effects mean that any small stock tends to outperform large stock and that any value stock tends to outperform growth stock? What should be the right way to describe these effects?

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Answer #1

The Dimensional Fund Advisors describes the " Size and value effect" as not a limiting factors towards the performance of any stock whether it is a large or a small size stock or it will have a effect due to its stock value. The stock will perform according to the news and the results it provides to the market. The growth pattern in the future of the stock will lead its way to gain high value then to outperform. The attitude of the investors towards the promoters and the company and its stock will also tend it to outperform the very leading stock in the market.

Thus, the size and the value do not have any effect on the performance of the stock.

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