A Look Back at 2016

(from Dimensional Fund Advisors’ Down to the Wire blog by Weston Wellington dated 1/13/2017. Weston is a Vice President with DFA, helping to lead the firm’s market research.  He works closely with financial advisors all over the world in helping them to understand DFA’s approach to investment success.)    Every year brings its share of surprises. But how many of us could have imagined that 2016 would see the Chicago Cubs win the World Series, Bob Dylan receive the Nobel Prize in Literature, Donald Trump elected president, and the Dow Jones Industrial Average close out the… [read more]
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When Good Beats Perfect

Did you go to the gym this morning?  Did you notice anything?  It’s already starting to empty out, isn’t it? As we move through the second week of 2017, many deeply resolved, well-laid plans have already gone the way of the dodo bird.  Statistics tell us that in just a few more weeks, most all will be a thing of the past. It is difficult to change habits.  We get comfortable with our routine and are willing to defend, consciously or subconsciously, against any outside influence looking to cause us discomfort.  That’s how they became… [read more]
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You Can’t Afford Not To

I was recently cleaning my grandmother’s house and I came across her passport.  I flipped through the pages to find the only stamp in the book.  It was from a trip to Ireland she took about five years ago.  It made me smile. I flashed back to us sitting at her dining room table one day eating lunch talking about whether she should take the trip.  Being of Irish descent, she’d wanted to go to Ireland her entire life.  I can’t tell you how many times I heard her mention it over the years.  Yet… [read more]
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A Vote For Small Cap Stocks

(from Dimensional Fund Advisors’ Down to the Wire blog by Weston Wellington dated 12/22/2016. Weston is a Vice President with DFA, helping to lead the firm’s market research.  He works closely with financial advisors all over the world in helping them to understand DFA’s approach to investment success.)    In the days immediately following the recent US presidential election, US small company stocks experienced higher returns than US large company stocks. This example helps illustrate how the dimensions of expected returns can appear quickly, unpredictably, and with large magnitude. Average returns for US small company stocks… [read more]
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Bonds Away!

Why would I ever want to hold bonds in my portfolio? I’ve been asked that question many times over the last 28 years.  Between June 2004 to December 2005, when the Federal Reserve raised the target rate 13 times in a row, resulting in lower bond prices.  From 1995 to 1999 and 2003 to 2006, when bonds appeared to serve no purpose in portfolios than to dampen the double-digit returns stocks delivered.  More times than not, bonds have been the underdog in investment allocations, and recent stock market returns followed by the Fed’s rate… [read more]
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Beware the Prognosticators

While pondering topics this week for my final post of 2016, I’ve been inundated with periodicals, industry publications and online headlines full of projections about hot stocks, interest rates and where the overall market is headed in 2017. I started linking stories above to make my point, but there are so many, it’s tough to choose just a few.  Linking to one headline suggesting that the Dow is heading to 40,000 would show preference over a claim that it’s headed to 2,000.  If you’re curious, search virtually any financial media site after you’re finished reading.… [read more]
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It Takes a Village

Once again, we’ve entered the special time of year when the days get shorter, temperatures get cooler and our calendars are full of holiday bashes and family get togethers.  The sparkling lights and long lines at the mall can mean only one thing…it’s FAFSA season? Recent changes to the Free Application for Federal Student Aid moved the opening of the filing window back to October 1st from its previous start date of January 1st.  Filers now have from October 1st, 2016 until June 30th, 2018 to file their… [read more]
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Do You Really Have the Stamina to Be Wealthy?

(from Jason Zweig’s 11/11/2016 Wall Street Journal Intelligent Investor column published every Saturday in The Wall Street JournalClick here for the original post.  Jason is also the best selling author of Your Money and Your Brain.  Follow Jason on Twitter @jasonzweigwsj.)
Everyone knows beating the market is hard. What many investors still don’t seem to realize is that even surviving the market is hard. Of the 525 U.S. stock mutual funds that existed thirty years ago, 223 are still operating today, according to Morningstar; only six are still run by
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Learn From My Mistakes

I was in the women’s locker room at my gym, getting ready for work, when the woman from the front desk rushed in.  “Are you Jeannette Jones?” she asked breathlessly, “There’s a police officer out front to see you.”  I grabbed my gym bag and rushed out after her.  My first thought was our son had been seriously hurt in an accident. As I turned the corner to the lobby, I saw my husband talking to the officer, but he looked disappointed, not frantic, so I relaxed a little.  “Both our cars were broken into. … [read more]
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React, then Reflect

On June 23, the United Kingdom voted in favor of what has become famously known as Brexit, a referendum instructing the British government to exit the European Union.  This vote surprised most every poll and odds maker who ventured a guess on the outcome. That day, the Dow Jones Industrial Average* (the Dow) closed before election results were known at 18,011.07. The next day the Dow lost more than 610 points in response to the surprise outcome.  As concern spread over the weekend, the average continued another 260 points lower on Monday, closing at… [read more]
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