Getting the Right Answers
Our philosophy is grounded in academic research much like today's physicians. They practice evidence-based medicine, we practice evidence-based investing. You wouldn't (or shouldn't) trust your doctor with the latest hype in medical treatment. Rather, you trust they are getting the right answers for your condition from the medical research field. The same applies to your portfolio. Do you trust the latest hype or stock of the week often touted by major media channels? Or, do you follow the research? Academic research shows that market timing is a losing game. Instead, investors should invest in a globally diversified portfolio of passively-managed, low-cost, no-load mutual funds across multiple asset classes for the long-term. Short-term market turmoil that we have seen recently can test an investors' patience. Often, the best course of action is to do nothing and stick to your investment plan using these times of turmoil to rebalance your portfolio. Nobel laureate Eugene Fama and Kenneth French discuss the very foundation of evidence-based investing that is core to Dimensional Fund Advisors ideology.