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The “skittles chart” of country returns & country market sizes

Last week I discussed a skittles chart (periodic table of investment returns) for common indexes and broad asset class returns. Below you will see how returns of various countries compare year by year for both developed and emerging markets. From dfa matrix book us_2015 from Better Financial Education Yes – it is hard to see specific […]

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The Rise of Short Term Rates

“While many market participants wait for the “inevitable” rise in short-term interest rates expected when the Federal Reserve tightens its monetary policy, some investors may have missed the increase in short-term rates already underway as a result of market forces. ” The rise of_short-term_rates from Better Financial Education Note: Your RSS feed or email may […]

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Why may a person’s return calculation be wrong?

People often get the calculation for their investment rate of returns wrong. Most people use the average rate of return which completely ignores the time value of money. The average rate of return may over, or under, state actual returns and are not suitable for comparisons with other investments. Most investments people have receive money at various […]

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Is Investing a Plan?

Many people think that investing IS their plan. I will use a flying analogy to illustrate how investing is not your plan. So if investing is not your plan, what is your plan? What are you really trying to do when you invest? Here then is an analogy from a flight perspective. When people focus on investing, […]

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Reconstitution effects on inflexible indexes

The following phenomenon results from “reconstitution” has been well known for years. However, with the increasing popularity of indexing, I’m glad some light has been shined on the topic because this shows the difference between a retail structured index, that all mutual funds following an index are subject to, and a proprietary structured index such as Dimensional. […]

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Investment Philosophy

Index Funds Anchor Your Portfolio

Index funds often earn higher returns than the average actively managed mutual fund. What’s their secret? The differences between retail index funds and actively managed funds are discussed below. The article does not discuss a more broadly defined index that Dimensional (DFA) has developed. Retail indexes, as the article discusses, are defined by an investment […]

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What’s My Tax on That Stock?

If you want to sell shares, figuring out how much tax you owe on the proceeds can be vexing. This is typically a special problem for people, or their heirs, who held the stock certificates rather than leave them with a broker. Here’s my syndicated article that discusses some insights into the sometimes troublesome tax […]

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The Role of Bond Funds in a Portfolio

Bonds tend to have less risk than stocks, but at the cost of less return. However, a proper use of certain kinds of bonds may temper the risk of your overall portfolio using diversification. Most people concentrate on investments only from a focus on returns. Diversification is an important factor to consider too, and bonds […]

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Why Do Many Reasonable People Doubt Science?

This question posed in the National Geographic magazine (June 2015),… titled “Why Do Many Reasonable People Doubt Science?” …  got me thinking about why reasonable people think it is possible to time the markets, even though there’s plenty of academic evidence to the contrary. Some points from the NG article that are also in many ways relevant […]

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Dimensional’s Disciplined Approach Earns It a Top Mark by Morningstar

Morningstar recently issued a new Stewardship Grade for Dimensional. The firm’s overall grade—which considers corporate culture, fund board quality, fund manager incentives, fees, and regulatory history—is an A. Dimensional morningstar stewardship from Better Financial Education In the interest of disclosure: I do use DFA sub-managed SA Funds with most clients (not a fund requirement, but a […]

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