Category Archives for Investment Advice

Confusing Economic Signs

Googling “US economy” recently, I got the following headlines as the top two results: “US Economy Is Doing Better than Americans Think” “Famous Economist Who Predicted 2008 Recession Issues

Continue reading...

What We Talk About When We Talk About Volatility: Magnitude vs Percentage

If you’ve ever listened to public radio’s “Marketplace” with Kai Ryssdal, you may have noticed the songs they play when they “do the numbers.” On days the market is up, it’s “We’re in

Continue reading...
Senior couple throws shoes

What Does It Take to Take on Risk?

The trade-off between risk and reward is a key part of any investment strategy. But risk means different things to different people. While risk is the key to unlocking greater gains, it can also be a source

Continue reading...
Investor analyzing stock market report and financial dashboard with business intelligence (BI), with key performance indicators (KPI).businessman hand working with finances about cost and calculator.

Here’s Why You Should Invest in All the Sectors, Not Just One

Recent history shows the challenge of trying to pick “hot” sectors in advance.Sectors represent groups of companies that make similar products or offer comparable services. From 2014 to 2023, no sector

Continue reading...
Finance and investment as concept.

Value Can Pop Without a Growth Drop

If Eeyore were a value investor, he would probably be among those who feel that a positive value premium can only come at the cost of a growth stock tumble. This view implies value stocks can post strong

Continue reading...
Happy Senior Couple Paying Taxes Online With Laptop In Kitchen, Smiling Elderly Spouses Using Computer At Home, Planning Family Budget Together, Accounting Expenses, Closeup Shot With Free Space

Rate Sensitivity ≠ Price Predictability

While the market sees an increasing likelihood of Fed rate cuts later this year, the highest probability outcome for the December Fed meeting is a target range of 425–450 basis points—still above the

Continue reading...
Global Investment in Foreign Businesses as a Art

Doing Better with Global Diversification

Joel Hefner explains how diversifying globally and emphasizing the dimensions of higher expected returns can improve the chances of having a successful investment experience.

Continue reading...
A group of older adults participating in a yoga class, with one woman in the foreground smiling and holding a yoga pose with her hands together above her head.

Looking to Stick the Landing? Shake Off the Volatility.

The US stock market has been on a winning streak, so some investors may have been jolted when the S&P 500 fell more than 6% from July 31 to August 5. The Cboe VIX Index, a measure of US stock market

Continue reading...
A mature man holding his glasses and reading a newspaper while sitting on a sofa in a well-lit room.

Fewer Stocks Same Size Premium?

Over the past two decades, the number of US-listed, publicly traded companies has decreased by half.1 There are many theories about what might be driving the change, such as increasing mergers and

Continue reading...
An elderly couple is sitting closely together on a sandy beach, looking out at the sea during sunset with boats in the distance.

Index Reconstitution Costs Continue to Add Up for Index Strategies

KEY TAKEAWAYSIndex-tracking funds seek to match an index’s performance, which may lead to constraints and implementation costs that hurt returns.Our latest analysis shows there are costs for index-tracking

Continue reading...
A senior couple smiling and looking at a laptop screen together, with a glass of orange juice in the foreground. The woman is wearing glasses and a striped yellow top, and the man is in a light blue denim shirt.

Small Value Roars Back

It’s only been a couple months since I was encouraging patience with small cap value based on past examples of quick turnarounds in relative performance. At the risk of sounding like a rooster taking

Continue reading...
An elderly couple smiling while looking at a tablet together in a kitchen, with the woman standing behind the man who is seated at a wooden table.

Don’t Get Fed Up: Part 2

In a recent edition of Above the Fray, we highlighted evidence showing that markets may move ahead of the Fed because markets are continually processing information that might factor into Fed decisions.

Continue reading...
A smiling middle-aged couple looking at a tablet together with a vase of white flowers in the foreground.

Don’t Get Fed Up

One of the reasons why Fed watching is an unreliable input into investment decisions is because the Fed’s expected actions are already reflected in market prices. By the time the Fed executes rate changes,

Continue reading...
Hands typing on a laptop keyboard with an overlay of futuristic digital graphics and data visualization elements.

Gettin’ a Dell

Russell’s annual reconstitution took place last month, and one of the notable additions to the Russell 3000 Index was Dell. Some investors may be confused as to why the stock of a company with a household

Continue reading...
Three people in a casual business meeting with a laptop and documents on a coffee table, in a bright living room setting.

Weighting Whiplash

Index construction rules sometimes remind me of the SNL skit “Washington’s Dream,” where Nate Bargatze explains the rationale for switching to the customary unit system for distance: “How many

Continue reading...
An older couple sitting close together on a sofa while looking at a smartphone in a bright, modern living room.

Trading Places

Investors may soon have a new venue for trading stocks with the newly proposed Texas stock exchange. What many investors may not know is this exchange, if approved, would join an already sizable list of

Continue reading...
Senior couple examining a map together at a harbor with boats in the background.

French Frights

Many investors view government debt as a concern for future market returns. The long- run data suggest country debt-to-GDP has not been correlated with stock market returns. This is likely because debt

Continue reading...
An older couple smiling and sitting together on a sailboat with the ocean in the background on a clear day.

AI Tide May Lift All Boats

With the benefit of hindsight, it’s hard to imagine a company not benefiting from the advent of e-commerce in the late 1990s. In fact, it’s easier to remember the blunders from that era. (Hello, pets.com!)Breakthroughs

Continue reading...
A smiling elderly couple sitting together at a table with a laptop, with the man pointing at the screen and the woman looking on; a coffee cup sits beside them.

What Do Yield Curve Inversions Really Tell Us?

Since April 1, 2022, the yield on the 2-year US Treasury has exceeded that of the 10-year Treasury. This so-called inverted yield curve shape, where longer-dated bonds yield less than shorter-dated bonds,

Continue reading...
A smiling middle-aged couple sitting close together at a table, looking at a tablet screen, with a cup of coffee and a glass of orange juice on the table.

Looking to Data for Life’s Most Important Choices

Senior Researcher Mamdouh Medhat says his father’s reliance on data guided a life-changing family move, an analytical approach that lives on in Mamdouh’s work.

Continue reading...
A man in a light blue striped shirt sitting in front of a laptop, looking thoughtful with his hand on his chin, glasses and a cup of coffee on the table beside him.

Equity Compensation: Big Opportunities, But Beware the Risks

We all like hearing that we’re good at our jobs. It’s nice when kudos from your employer come bundled with dollar signs, or when a company backs up the cash truck to entice you to join their team.

Continue reading...
An outstretched hand with a digitally superimposed white outline of a world map with connecting lines and circles suggesting global connections or communication.

Global Diversification Still Requires International Securities

Investors often ask if globally diversified stock portfolios are necessary when the US stock market has many multinational companies or those earning revenues from non-US countries. The data suggest these

Continue reading...
Group of runners participating in a race, focus on runner in orange with a race bib, in a sunlit outdoor setting.

Planning for the Long Run, in Markets and Marathons

Regional Director and ultramarathoner Alex Price says sticking with a plan is key to overcoming obstacles and outside noise–and ultimately reaching the finish line.

Continue reading...
This looks like something interesting to watch. mature couple using a laptop on the sofa at home

What Goes Up Might Not Come Down

US stock market indices hit all-time highs in recent weeks, leading some investors to wonder whether now is a good time to be in stocks—or do record levels portend an upcoming tumble? The historical

Continue reading...
Couple at computer reviewing information.

Reality Meets Expectation for the Mag 7

It is unlikely any stock has an expected return of 100% per year. That seems too high to be the cost of equity capital for a company, and it’s doubtful anyone would sell a stock with an expected return

Continue reading...
A mature businessman using a tablet at his desk with a laptop, smartphone, and clipboard in the background.

Changing The Way People Feel About Investing

Market ups and downs stir anxiety and challenge your investment discipline. Dimensional’s approach tunes out the noise so you can invest better and live better.

Continue reading...
Wooden blocks spelling the word

Gold Hasn’t Been Effective at Tracking Inflation

Gold is sometimes touted as a tool for protecting wealth from rising prices. But history shows the challenges of using gold to offset the impact of inflation.Since 1970, gold has often experienced large

Continue reading...
Senior man working on a laptop with an attentive woman standing behind him, possibly collaborating or discussing the content on the screen, in a bright indoor setting.

Proceed with Caution Focusing on Yield

Investors selecting funds based on dividend yield should be aware that high yield is no assurance of higher expected return. Plotting 10-year annualized returns vs. average dividend yield for US large

Continue reading...
A man and a woman jogging on a sandy beach with the ocean in the background and a clear blue sky above.

Investigating Patterns Objectively

Shifting my exercise routine to early mornings affords me more workouts on average each week. The tradeoff is nearly an hour’s less sleep each night.1 In effect, my fitness level is negatively correlated

Continue reading...
A hand holding a television remote control in front of a blurred screen showing an American football game in progress.

Draft Picks and Value Stocks

During the National Football League’s recent draft, teams selected from hundreds of prospects to build rosters for the future. It’s my favorite sporting event of the year, mainly because it provides

Continue reading...
1 2 3 … 8
>