Doing Better With Global Diversification
In two previous posts, here and here, we shared a pair of Dimensional Fund Advisor videos based on historical U.S. market returns data. If we really want to share this tale of evidence-based investing in living color, we’ve got to go global. While global returns data doesn’t go back as far – 1973 vs. 1926 for U.S. returns – it still has its own important story...
The Ups and Downs of Stocks and Bonds
In our recent post, “What’s Up with Inflation?” we introduced a trio of videos Dimensional Fund Advisors has shared. They help bring its Matrix Book numbers to life for those who might not want to pore through pages and pages of data by themselves.
Once you know what to make of all that data, it has quite a story to tell, especially when it...
What’s Up with Inflation?
Once upon a time (in 1982), Dimensional Fund Advisors began publishing its annual “Matrix Book,” now its longest-running publication. It's jam-packed pages of market returns data stretching back to 1926 may seem daunting at first. But, oh, the stories these numbers can tell … which they do in a trio of quick-take videos Dimensional released along with this year’s edition.
Take, for example, the story of inflation. While...
The Quilt That Keeps on Covering a Diversified Investor
What a difference a year sometimes DOESN’T make. For several years now, we’ve been tracking the annually updated random returns that comprise what is known as “the crazy quilt chart.” Here are this year’s results:
The Crazy Quilt Chart Update
To review how the chart works, each color represents an “asset class,” or a long-term source of expected market returns. By stacking each column/year...
The price of financial illiteracy is steep
In Magna Cum Lousy, Tony Isola laments that we are failing our children by not educating them about personal finance.
“Imagine: you give a teenager access to car keys when they have never driven a car or taken Driver’s Education. You simply tell them to drive carefully and you hope for the best. That would be setting them up for failure, and yet, we do...
A retiree owned too much company stock
“Retirement looked pretty good until GE shares collapsed.” (Wall Street Journal, 4/22/2018)
Additional Reading: We Only Get to Experience One Version of Reality (The Reformed Broker, 4/23/2018)
An early retiree misses their old working life
What if I’m wrong about everything? (Thriftygal, 4/18/2018) “What if happiness is more about roots and people and relationships and productivity and less about freedom and flexibility?”
When life happens
How do you save for “retirement” if you don’t participate in a 401(k) plan?
Katie Lobosco with CNN Money writes “The good news is that there are other accounts you can open yourself that offer similar benefits. For some self-employed people, the benefits can be even better than a traditional 401(k) plan's.”
Roth IRA’s are great for kids with earned income
Kimberly Lankford with Kiplinger’s Personal Finance notes “Contributing to a...
An Exercise in Confusion: “Tuning Out the Noise”
First, take a moment to view this powerful video, just released by Dimensional Fund Advisors.
The new millennium’s biggest financial headlines
Now, before you consider the substance, how did the onslaught make you feel? Nervous? Anxious? Annoyed? Confused? Maybe all of the above!
This exercise captures exactly how most investors felt as the new millennium’s biggest financial headlines were playing out in real time. As...
The financial crisis has shaken young people’s faith in capitalism
A (financial) crisis of faith (John Paul Rollert, Chicago Booth Review, 8/10/2018)
“A spring 2016 poll from Harvard University’s Institute of Politics finds that only 19 percent of Americans between the ages of 18 and 29 identified themselves as capitalists, and 51 percent of those surveyed said they did not support capitalism. Similarly, a YouGov poll commissioned late last fall finds that,...
A Quarterly Tale of Risks and Returns in Real Time
For the first time in a long time, U.S. and international developed stock markets alike bled off some steam this quarter. You’ll see that expressed by the bright red arrows in Dimensional Fund Advisors’ first quarter Quarterly Market Review Market Summary (page 3).
While we fully expect markets will continue delivering positive long-term returns, who knows what the rest of the year...