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April 17, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

April 9, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

April 3, 2018 in Financial Life Planning, Investing, Mindful living
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 26, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

March 20, 2018 in Investing
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...

March 14, 2018 in Evidence-Based Investing, Investing
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...

March 5, 2018 in Evidence-Based Investing, Investing
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...

February 20, 2018 in Evidence-Based Investing, Investing
A "stunning" chart on inflation Barry Ritholtz shares a chart showing Inflation: Price Changes 1997 to 2017 What do you notice about the cost of college as well as health care? “Wages have barely ticked over the median inflation measure, but that did not stop some people from blaming the correction on rising wages.” Chart Source: Chart of the day (century?): Price changes 1997 to 2017 (AEIdeas, Mark J. Perry, 2/2/2018) 90-second fact-checking what you...

February 13, 2018 in Evidence-Based Investing, Investing
The market as an excitable dog on a leash 1.  One of my favorite financial bloggers, Ben Carlson, writes in Market Earthquakes: “Ralph Wanger, the eccentric portfolio manager of the Acorn Fund, once summed up the stock market to Bill Bernstein with an analogy about walking a dog: He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner...

February 13, 2018 in Dimensional, Evidence-Based Investing, Investing
Recent Market Volatility February 2018 "While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing" After a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From February 1–5, the US market (as measured by the Russell 3000 Index) fell...