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July 17, 2018 in Investing, Tax Management, Young Adult Series
No, we are not in a 9-year-old bull market 1. Currently some clients, and pundits, are voicing concerns about the longevity of the current bull market. In the September 2017 article “No, This Is Not the Second Longest Bull Market Ever”, Barry Ritholtz and Michael Batnick laid out the case that the period running from mid-2015 to early 2016 "absolutely was a bear market." Barry also explains how he measures...

July 10, 2018 in Dimensional, Economics, Evidence-Based Investing, Investing
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...

June 27, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

June 4, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

May 29, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

May 23, 2018 in Dimensional, Evidence-Based Investing, Investing
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...

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

May 9, 2018 in Investing, Mindful living, Young Adult Series
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...

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...