Down to Earth Financial Reporting from Lynn O'Shaughnessy
An Investtruth is that passive investing beats active investing. At any one time 65-95% of actively managed funds cannot keep up with their respective passive benchmark.
We have scoured the world for the best passively managed fund family and are in agreement with many elite investment advisors: Dimensional Fund Advisors (DFA) is the best. DFA, as of 12/31/11, has $217 billion under management. Roughly half of that is overseen by advisors and half is managed for large institutions directly by DFA.
DFA's approach is better than "indexing" -- contact us if you would like to understand why. We'll stick with DFA unless another, better tool comes along. Note that we do not receive any 12b-1 fees from DFA.
Lynn O'Shaughnessy tells the DFA story in layman's terms in her Union Tribune column. Click here to read her U-T article on DFA, "Indexing with a Twist". The article is a few years old and still does a great job explaining DFA.
An entertaining piece on passive vs. active investing is old but still applies equally well today - Click hear for an entertaining piece from ABC's 20/20 by TV journalist John Stossel.
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What to Do Next
The most important first step is to understand what is most important to you, establish goals that are in alignment. Then choose someone that can bring a team of independent experts together and formulate the advice to make it happen. That said, it is normal to want to jump right into investing. We regularly analyze folk's current investment strategy with nothing expected in return. (We'll analyze other aspects of your strategy if you wish.) We look at: - Overall Performance (vs. benchmarks & our model portfolios)
- Portfolio Design
- Diversification
- Fees & Expenses
Give us a call. 760-804-0910 |
