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May 18, 2016 in Evidence-Based Investing, Investing by
A Fund Isn’t an Index (and Why That Matters) In our last post, we covered how not all indexes are created equally, which means that results may vary, even when they are supposedly tracking the same market. In today’s post, let’s look at how and why a fund’s performance may deviate from its closest benchmark index. Indexes vs. Evidence-Based Funds: Similar But Different Take one more step away from the real-life market,...

May 4, 2016 in Dimensional, Evidence-Based Investing, Fiduciary, Investing by
Well, speaking of the devil. Or, in this case, the devilish ways that some financial representatives make investment recommendations that may or may not be in your best interest. It depends on whether they are in a fiduciary relationship with you … or not. No sooner had we wrapped our own post explaining why the term may be as important as it is unfamiliar, Dimensional Fund Advisors published its own handy...

April 20, 2016 in Evidence-Based Investing, Investing by
Part II: Your Portfolio and Its Parts In our last post, we discussed why it’s best to avoid comparing your own investment returns to “the market” or the latest popular portions of it. There’s one more misleading measurement that can trip up an investor: [message_box title="Your Portfolio" color="gray"] = Pursing the market’s expected returns (by investing in asset classes with higher expected returns but higher volatility) + Managing the risks involved (by investing in asset classes with more...

April 12, 2016 in Evidence-Based Investing, Investing by
Part I: Coveting Your Neighbors’ Returns It’s ironic. One of the biggest questions we ask ourselves as investors is: “How am I doing?” While the question is a good one, if the answers are off-base, you risk changing course when you should be sitting tight, or sitting tight when you should be considering a change. This is not only frustrating, it can detract from … how you are doing. It’s a...

March 29, 2016 in Dimensional, Evidence-Based Investing, Fiduciary, Investing by
One of the reasons I read as much as I do is to be inspired by others. There’s nothing I love more than discovering an intriguing new way to frame an old idea, and then sharing what I’ve learned, hoping to inspire others as well. On the flip side, there’s nothing more demoralizing than falsehoods or opinions being spread as facts. They remind me of a shopping channel infomercial. Watch it...

March 7, 2016 in Dimensional, Evidence-Based Investing, Investing by
Still Going Global We’ve said it before and we’ll no doubt say it again. In fact, because it’s so important, we dedicated one of last summer’s Investment Basics Series installments to global diversification, “your super power to help you manage that market risk by spreading it around, widely and globally.” In this year’s markets, the message bears repeating so disparate global returns don’t tempt you to concentrate your holdings too close to home....

January 26, 2016 in Dimensional, Evidence-Based Investing, Investing, Year In Review by
To counteract some of the stress that the markets have been putting us through lately, we’d like to share a short, upbeat tale with you about risks and expected rewards. "Once upon a time in 1981, there were two young men in Brooklyn who created a fund management company based on a set of ideas that were “bigger than the firm itself.” Its funds would be new and groundbreaking, but they...

December 15, 2015 in Evidence-Based Investing, Investing by
When Ponce de Leon was searching for the Fountain of Youth, he may have been better off looking closer to home by exploring his own, inner attitudes. So says the evidence-based research on how to improve on our stamina as we age. In fact, we couldn’t help but notice a number of uncanny parallels between our advice about sound investing and the following, evidence-based excerpts from a recent Wall Street Journal...

October 21, 2015 in Evidence-Based Investing, Investing by
“How do you pick the funds you use?” This is a frequently asked question, and a fair one. Out of the thousands of contenders, how do we pick the right funds for you and your investment portfolio? Our selection process is a bit like a highly personalized, sudden-death tournament. We still consider the entire mutual fund universe of possibilities, but it’s relatively easy to eliminate the vast majority of them in...