Market Pricing: Evidence-Based Investing Insights Part 1 of 4

DimensionalEvidence-Based investing comes from a compilation over more than a half century of many independent peer reviewed research results of how markets work. There are 12 key insights:

Here are the first 3 about market pricing insights:

    1. Group intelligence – the market does a better job than you can of forecasting prices.
    2. What causes prices to go up and down? The unexpected is impossible to predict ahead of time.
    3. Gurus are like unicorns. A fund manager may outperform for a short period of time, but knowing who they are ahead of time is not possible. Developing a diversified portfolio of fund managers where all outperform is unlikely. The long term is the rest of your life – not some subset of time from the past.

PS. Analogies that explain the difference between investing and planning (Yes, they are different)! :

This blog is not a solicitation; simply an explanation of the basic philosophy and approach.

 

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