Category Archives for Financial Education & News
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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Financial Quick Takes: Making Mistakes
Nobody wants to make investment mistakes. And yet, we’re human; mistakes happen. Here’s how to minimize the ones that matter the most, and make the most of the ones that remain.Bad Decisions vs. Bad
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Do Downturns Lead to Down Years?
Stock market slides over a few days or months may lead investors to anticipate a down year. But the US stock market had positive returns, despite some notable dips in many of those years. Intrayear declines
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Sizing Up the Bond Market
When you go shopping for pants, do you buy one pair in every size available? Most people do not, presumably because only one size is the most appropriate fit.1For many investors, bond portfolios should
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Stock Gains Can Add Up after Big Declines
Sudden market downturns can be unsettling. But historically, US equity returns following sharp declines have, on average, been positive. A broad market index tracking data since 1926 in the US shows that
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Help Your Child Become a Millionaire (Tax-Free, Too!)
In 1716, Christopher Bullock wrote, “Tis impossible to be sure of any thing but death and taxes.” Two centuries later, researchers keep trying to disprove the first, while Washington DC seems intent
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Here’s How to Shock-Proof Your Retirement Plan
Dad was several years older than Mom, and toward the end of their lives, in poorer health than hers. I tried asking Mom if they had plans in place to take care of her when dad passed away.For obvious emotional
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What are Active ETFs?
Actively managed ETFs were first launched in the U.S. in 2008 offering benefits previously unavailable to investors. But their popularity remained limited until 2019 due to portfolio disclosure requirements
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Traditional IRA or a Roth IRA: Which Should You Choose?
Should you contribute to a traditional IRA or a Roth IRA?What we refer to today as a traditional IRA (Individual Retirement Account) came into existence in the ‘70s as part of the Employee Retirement
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Practicing Healthy Habits, Pursuing Wealthy Outcomes
Investing and health can be two of the most important things in life, but sometimes they also can be the most confusing. There’s so much data and advice, so many articles—and unfortunately, they often
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Part 3: A Balanced Look at Stock Buybacks
Risks Amidst the RewardsIn our last piece, click here we summarized the ways a successful stock buyback can deliver powerful, tax-efficient value to shareholders, without stunting future growth. But stock
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Why Social Security Timing Isn’t About Maximizing Lifetime Benefits
Social Security is a critical part of making retirement even somewhat affordable for many Americans.According to Fool.com, Social Security can replace over half of career-average wages for low-income Americans,
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Part 2: A Balanced Look at Stock Buybacks
Sustaining Current and Future ValueIn our last piece, click here, we explained how stock buybacks generally work, and why we prefer investing in a globally diversified investment portfolio over chasing
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Let the Compounding Commence!
Every year, families and friends celebrate students who are graduating from colleges and universities. Parents beam with pride at their children’s accomplishments and exhale in relief now that the tuition
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Part 1: A Balanced Look at Stock Buybacks
How Do Stock Buybacks Work?Stock buybacks—i.e., a company repurchasing shares of its own stock—have been targets for praise and criticism through the years. So, which are they: good or evil? We agree
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Part 2: What’s Wrong with Depending on Dividend Stocks?
Dividend Stocks vs. Total Return InvestingIn Part 1 of “What’s Wrong With Depending on Dividend Stocks?” we described why dividend investing—or, stocking up on stocks with a reputation for consistently
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Part 1: What’s Wrong with Depending on Dividend Stocks?
How Dividend Stocks Really WorkThere’s a popular perception that “dividend stocks”—i.e., stocks with a reputation for paying out consistent dividends—can deliver decent returns, while also creating
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The Stock Market vs. Stocks in the Market
The collapse of First Republic Bank is a harsh reminder that any stock can go to zero, no matter how established a company is, or how loyal and wealthy its customers are. The failure of what many considered
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Your Employee Stock Purchase Plan (ESPP) – What You Need to Know
If you work for a publicly-traded company, your employer may offer you the chance to buy shares of your company’s stock through a program called an Employee Stock Purchase Plan (ESPP). The idea behind
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How Targeting Size, Value, and Profitability Can Improve Retirement Outcomes
Many retirement investors hold equity portfolios that track broad market indices, either directly or through other investments such as target date funds. Despite their widespread popularity, market portfolios
Continue reading...What Do Points Mean In The Stock Market
TLDR: If you've ever wondered what do points mean in the stock market and how they can affect your portfolio, this guide aims to lift the lid on the daily changes of the Dow, S&P 500 and more.Getting
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10 Obstacles to Investing—and How to Overcome Them
We’ve learned a lot about investing over the past 60 years, a period that has seen many breakthroughs in the world of finance. What we know comes from studying public markets and is grounded in serious
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