Quarterly Market Review


Quarterly Market Review

April 18, 2019

Ideal vs. Imaginary Investing

“There’s one robust new idea in finance that has investment implications
maybe every 10 or 15 years, but there’s a marketing idea every week.”
– Nobel Laureate Eugene Fama

Nobel laureate and Dimensional Fund Advisors board member Eugene Fama has offered an
abundance of quotable insights during the 50+ years he’s been studying financial
economics. The quote above is one of our favorites – and as fitting as ever as we reflect on
Dimensional’s most recent Quarterly Market Review.

Near-term performance numbers (which can turn up or down on a dime, as we can see
from last quarter’s outcomes) are often driven by some catchy new investment “fashion.”
Have you ever noticed they often have animal themes? In the 1990s, there were the Asian
Tigers. After the 2008 financial crisis, Black Swan funds became a thing, as did FAANGs.
Most recently, there’s been much ado about Unicorns.

Animal spirits aside, we agree with Dimensional’s commentary in this quarter’s report: “A
market portfolio offers the benefit of exposure to thousands of companies doing business
around the world and broad diversification across industries, sectors, and countries.”
There are valid reasons to tilt your globally diversified portfolio toward or away from
evidence-based sources of expected returns. But we would suggest that chasing after
mythical creatures shouldn’t be one of them.

Do you have questions or comments about your own investments in the context of last
quarter’s review? For real, we’re here to help.

OPEN PDF: Quarterly Market Review (QMR) – Q1 2019

SAGE Serendipity: Chances are that we all know someone who is trying to be a moral compass on social media.  This philosophical analogy in Quartz.com takes our annoyance to this behavior back to the ancient Greeks: Socrates’ ancient philosophy shows why moral posturing on social media is so annoying

Quarterly Market Review

Sheri Iannetta Cupo, CFP®, Founding Partner (Retired) & Director
[email protected]

SAGEbroadview Wealth Management is a Fee Only firm offering ongoing financial planning and portfolio management, with tax planning woven carefully throughout our services. We work virtually across the country, with offices in Farmington, CT, Morristown, NJ, and Burlington, MA.