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...

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...

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...

Ideas that change how you think about the world “You spend years trying to learn new stuff but then look back and realize that maybe like 10 big ideas truly changed how you think and drive most of what you believe.” Morgan Housel shares his list in “Ideas that Changed My Life”. What defines you? In “Ring Life’s Bell”, Tony Isola talks about his family’s personal experience with pediatric cancer and...

March 2018 Sailing with the Tides Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised. Here is this week’s article from Dimensional's Jim Parker: Sailing with the Tides. SAGE Serendipity: You want to watch TV but deciding what to watch is taking more time...

Usually, our “3 Things” include – wait for it – three things. But Warren Buffett’s 2018 annual letter to Berkshire Hathaway shareholders is filled with so many interesting things that, today, we’re featuring three insights from this one source (emphasis is ours). 1.  Sleeping Well at Night “Why the purchasing frenzy [from others]? In part, it’s because the CEO job self-selects for ‘can-do’ types. If Wall Street analysts or board members urge...

We’re back! This week, we’re following up on last week’s post on how to combine practical application and academic science to impart a wholly stronger investment strategy. It’s called evidence-based investing, and we are delighted to share excerpts of a conversation between two respected proponents of the approach: The Evidence-Based Investor journalist Robin Powell and Dimensional Fund Advisors Co-CEO Gerard O’Reilly, PhD. You can read the entire interview on Powell’s blog...

There’s little we love more than a spot-on analogy to make simple sense of investment theory – like our recent “3 Things” about how the near-term market often behaves like an unruly dog on a short leash (from “A Wealth of Common Sense” blogger Ben Carlson). That said, while informational “snacks” are nice, sometimes a more complete meal is called for. If you’ve been craving an enhanced understanding of some of...