Category Archives for Financial Education & News

Common Investing Mistakes (Part 3)

Chasing Past PerformanceAs we continue to build from the last blog, discussing common investing mistakes around focusing on headlines. You might be inclined to select investments based on past returns,

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Women reading an investment newspaper.

Common Investing Mistakes (Part 2)

Focusing on the HeadlinesAs we continue to build from the last blog, discussing common investing mistakes around trying to time the market. Investors may become enamored with popular stocks based on recent

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Common Investing Mistakes (Part 1)

Trying to Time the MarketInvestors may be tempted to cash out of the stock market to avoid a predicted downturn. But accurately forecasting the market’s direction to time when to buy and sell is a guessing

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The Next BlackBerry?

Some investors attribute the Magnificent 7 stocks’ dominance to a “winner-take-all” environment in which a handful of companies achieve sufficient market share to hinder competition.1 In businesses

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Exciting Returns May Not Be Expected Returns

It is natural for investors to want more exposure to last year’s top-performing market segment. The challenge is determining what portion of that return was a one-off windfall and not something to expect

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Uncertainty Is Underrated

“A wave of new scientific discoveries reveals that learning to lean into uncertainty in times of rapid change is a promising antidote to mental distress.” –Maggie Jackson, New York Times1For many

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Active ETFs vs Mutual Funds: Similarities and Differences

The exchange-traded fund (ETF) structure shares certain similarities with mutual funds, but also important differences that investors need to understand, especially if you’re used to investing through

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When Should You Take Your Social Security?

Ever since President Franklin D. Roosevelt signed off on the 1935 Social Security Act, most Americans have ended up pondering this critical question as they approach retirement: “When should I (or we)

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What 2023 Teaches Us About Expectations vs. Reality

Realized market returns are driven by the difference between investor expectations and the events that actually transpire. If reality pans out better than expected, markets may deliver strong returns along

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Pursuing ETF Share Classes: The Right Thing to Do for Investors

In July, Dimensional applied for exemptive relief from the US Securities and Exchange Commission (SEC) to be able to offer ETF share classes of our mutual funds. We believe that the ability to offer both

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A Slice of Dividend Accounting

As many of us observed firsthand during the holiday season, eating a slice of pie means less pie remains. While not as tangibly apparent, the same concept applies to stock dividends: A company’s share

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Going Global for Value

Global diversification can increase the reliability of outperformance for strategies pursuing higher than market returns because premiums, like the value premium, do not always move in lockstep across

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Perspective on Premiums

When you leave your server a tip, do you round it to a whole-dollar amount and often in multiples of $5? Does a 60th birthday seem more significant than a 59th? If you answer yes to these questions, you’re

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Chutes and Bond Ladders

Some investors use bond ladders for fixed income exposure. A portfolio of bonds with maturities spaced out across a range of years provides a stream of cash flows that decreases the uncertainty around

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Which Country Will Outperform? Here’s Why It Shouldn’t Matter.

Investment opportunities exist all around the globe, but the randomness of global stock returns makes it exceedingly difficult to figure out which markets are likely to be outperformers. How should investors

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Magnificent 7 Outperformance May Not Continue

The Magnificent 7 stocks1 continue to capture the focus of investors as these large growth names have outpaced the bulk of global equities. Their outperformance is notable because eye-popping returns for

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Country Debt and Stock Returns

US government debt reached 121% of the value of the country’s gross domestic product (GDP) last year.1 Many investors have expressed concern over the impact that servicing this level of debt could have

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Does Your Bond Portfolio Need a Passport?

What do vacations and bond portfolios have in common? Expanding beyond opportunities in your home country may be the ticket to enhanced experiences.Yield curves for bonds issued in different currencies

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Concern over Market Valuations

Aggregate stock market valuation ratios have not been strong predictors of broad market returns. And yet, high stock valuations sit near the top of concerns cited by investors about the state of equity

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What Happens When You Fail at Market Timing

The impact of being out of the market for just a short period of time can be profound, as shown by this hypothetical investment in the stocks that make up the Russell 3000 Index, a broad US stock market

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TIPS Can Help Investors When Inflation Spikes

When consumer prices rise, as they did last year, some investors may want to hedge against unexpected spikes in inflation. History shows Treasury Inflation-Protected Securities (TIPS) can be a useful tool

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Understand the Lifetime Income Projections Coming to Your 401(k) Statement

The SECURE Act offers useful information, but only if you can understand it.If you’re an American worker who hasn’t been living under a rock since you started earning a paycheck, you know that saving

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Is Your Portfolio Underperforming … Compared to What?

Ah, we restless humans. Sometimes, it pays to strive for greener grass. But as an investor, second-guessing a stable strategy can leave you in the weeds. Trading in reaction to excitement or fear tricks

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Why a Stock Peak Isn’t a Cliff

Many investors may think a market high is a signal stocks are overvalued or have reached a ceiling. But they may be surprised to find out that the average returns for the S&P 500 Index one, three,

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When It’s Value vs. Growth, History Is on Value’s Side

Historically, value stocks have outperformed growth stocks in the US, often by a striking amount. Data covering nearly a century backs up the notion that value stocks—those with lower relative prices—have

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S&P Dow Jones Indices: U.S. Mid-Year 2023

Investment Resource: The S&P 500® rose by 16.9% in the first six months of 2023, marking a sharp rebound from its decline of 18.1% in 2022. The rally extended to smaller stocks, although less emphatically,

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Investing Is a Science, an Art, and a Practice

We started Dimensional in 1981 around a set of beliefs.1 These ideas remain core to our business and key to the experience we deliver.1. INVESTING IS A SCIENCEProfessional money managers have offered their

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Why the Growth of ETFs Does Not Spell the End of Price Efficiency

KEY TAKEAWAYS: We believe that concerns of decreasing price efficiency due to the growth of ETF investing are overstated.ETF trading volume exceeds ETF flow by a wide margin: For every $1 flowing into

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Financial Quick Takes: The Wisdom of Crowds vs. Popular Delusions In

In a bit of a paradox, you’ll find the following two titles on our recommended reading list:● The Wisdom of Crowds, James Surowiecki (2005)● Memoirs of Extraordinary Popular Delusions and the Madness

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You Know More about Investing than You Think You Do

No matter how familiar we are with investing, we’ve all navigated uncertainty, weighed risks and rewards, and made carefully considered tradeoff decisions. Just by being human, we’ve been compelled

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