Our relationship with Dimensional is crucial and one of the most valuable for our clients. Markets get hard to navigate sometimes and utilizing their approach keeps us grounded as it is based on economic theory and backed by decades of empirical research. Research is centered around where returns come from and securities that offer higher expected returns share certain characteristics called dimensions. Every day, managers and traders strive to balance costs against expected returns and diversification. Working toward the slightest expected gain knowing each incremental improvement adds up over time.

“Our scientific approach is based on a belief in markets. We draw information about expected returns from the market itself—leveraging the collective knowledge of millions of buyers and sellers as they set security prices.” ~ David Booth, Executive Chairman & Founder of Dimensional

Let’s look at what can happen if you fail to implement this approach and try to time movements in and out of markets:
$10,000 invested in a broadly diversified U.S. stock fund in 1980 would be worth about $1 million today providing you stayed invested all the time.
If you missed just the best 5 days in the whole 40+ years, you would have about 40% less or roughly $600,000.
If you missed the best 30, you’re all the way down to about $150,000.
Source: Matrix Book 2022- Dimensional

As we move through this volatile period, we want you to know that our goal is to help people live better—not just years from now, but today. Our science-based investing philosophy offers the peace of mind and transparency for this to happen.
Until next time,
Susan

 

 


Investors watching daily news updates on economic conditions have likely heard about the beige book. Here’s a brief look and what it is and why it matters:
Real name – Summary of Commentary on Current Economic Conditions
Released 8x per year by the Federal Reserve Board in advance of meetings

It measures the varying conditions around the 12 districts across our country by interviewing banks, economists, business contacts, market analysts and all kinds of other experts.
Note: I always find it very interesting to see the variances around the U.S.
Our 12 districts are:
Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta,
Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco

The Linkous Group, Ltd. has clients in 9 of the 12 districts so I view these reports regularly. Although, being in the San Francisco one, I find myself questioning the accuracy and relevancy as Arizona can be vastly different from the rest of District 12.
The latest one can be found at federalreserve.gov and it was release June 1st.


In The News

Anxious about investments? Focus on what you can control.

Check your diversification

Diversification is a key concept in investing. Because investment performance is unpredictable, especially over the short term, the idea is to spread your wealth among different assets that don’t all move in lockstep. A diversified portfolio doesn’t provide guarantees against occasional losses, but it does augur for an overall smoother ride.

“But investors sometimes are less diversified than they think and find out when market conditions get rough. For example, owning three stock funds won’t provide the protection you seek if all three hold the same types of stocks,” said Susan Linkous, a registered investment adviser in Fountain Hills. “It’s thus wise to check your investment holdings from time to time to see how spread out your portfolio really is.”
 Read the article in The Arizona Republic

*Material from third-parties, including Dimensional Fund Advisors (DFA), shared here should not be construed as a recommendation of that firm’s products or services. They are for educational purposes only.