Basis of Investment Decisions and Approach Giving You the Best Odds of Success
Focus on personal opinion of managers
Attempt to identify the 30%, and whether it is skill or luck
Greater chance that any one investment impacts wealth
Pay for something with no clear evidence of added value
More than 50 years of academic research in finance
More than 70% of managers underperform
Over 10,000 stocks in markets around the world
Over 1% average fund expense ratios
Focus on persistent drivers of investment performance
Treat markets as an ally and let them work for you
Spread investment risks as much as possible
Keep more of your money by using cost effective funds
Source: Morningstar and S&P Index vs. Active quarterly report.
Diversification does not eliminate the risk of market loss.
Implementation of Investment Approaches
Predictive-based investing, limited diversification
Market-based investing, seeks to capture returns of broader group of investments
Traditional Active Management
Bets on individual investments, or short term market timing
Index Management
Diversified Exposure to Groups of Investments
Tax Management
Dimensional
Diversified Exposure to Groups of Investments
Tax Management
Integrated Portfolio Design, Management and Trading
Consistent Investment in Asset Classes
Precision and Exclusions
Avoid Index Reconstitution
Effect
Momentum Screens
