Are you speed-dating or in an ideal marriage with your investment portfolio? As Dimensional Fund Advisors’ Quarterly Market Review reveals on its summary page, investors have much to appreciate this quarter, with positive returns from U.S. and international developed stocks. Still, “appreciation” is relative; there’s always some asset class outperforming its counterparts – and some underperforming. So, let’s address a question I’ve been hearing: “My globally diversified portfolio has been underperforming the...

The Happiness Equation         As Brad Steiman of Dimensional fund Advisors writes in this article: Mo Gawdat, a serial entrepreneur and Chief Business Officer at Google X, tried to engineer a path to joy in his book, Solve for Happy, by expressing happiness as an equation. HAPPINESS ≥ Your Perception of the EVENTS of your life − Your EXPECTATIONS of how life should behave According to Gawdat’s model, if you perceive events as equal to...

Do Mutual Funds Outperform Benchmarks? Dimensional's analysis of US-based mutual funds shows that only a small percentage of funds have outperformed industry benchmarks after costs—and among top-ranked funds based on past results, only a small percentage have repeated their success. Here's the short (2:36 minutes) video for your viewing pleasure. SAGE Serendipity: The New York Times has a great collection of 2-3 minute video's called SCIENCETAKE.  Presented by science writer James Gorman, these...

      What’s That Stock Worth to You? They say your home is your castle, but that doesn’t mean you should have to pay lavish prices to live there – at least no more than the going rate for a similar estate. It’s the same for your investments. You expect to pay something for the holdings in your portfolio, but there’s no sense paying more than market rates. If you do, it counts directly against the...

      July 2018 The Tao of Wealth Management The path to success in many areas of life is paved with continual hard work, intense activity, and a day-to-day focus on results. However, for many investors who adopt this approach to managing their wealth, that can be turned upside down. The Chinese philosophy of Taoism has a phrase for this: “wei wu-wei.” In English, this translates as “do without doing.” It means that in some...

What’s your favorite mixed nut? In a bowl of mixed nuts, which flavor do you favor? For the record, I’m a sucker for the cashews. It’s fine to pick out your treat preferences. In the market, you’re best off skipping the picking, and sticking instead with an appropriately balanced mixed bag. This quarter’s up-and-down returns continue to show us why. Whether we view the market by quarter, year or more, we’ll always see...

The Impact of Inflation Over the long run, stock markets are expected to deliver returns well beyond the rate of inflation. That is, the $1 you invest in today’s stock markets should still provide $1 or more worth of purchasing power decades into the future. In exchange, you must tolerate volatility risk, which can cause your account balances to bounce around wildly, often uncomfortably, along the way. In contrast, “safe” Treasury bonds...

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...