Overview: The following rules can help investors build and adhere to a well-designed investment plan. The following investing guidelines may be instrumental in giving investors the best chance of achieving their financial goals. Constructing an Investment Plan Recognize that the ability, willingness and need to take risk is different for everyone. Plans fail because investors…
After the bear markets of 2000–2002 and 2008, we seem to have entered an era in which investors wonder whether a market collapse is right around every corner, even following new market highs. The S&P 500 Index achieved a new high at the end of the first quarter, closing at 1,569 after beginning the year at 1,426, but has experienced considerable volatility surrounding the events in Boston. So, is it reasonable to fear a severe market downturn given this generally good performance in tandem with recent events?
With the markets predominantly producing positive news so far this year, you would think that would have investors feeling optimistic. But are they? Carl Richards, director of investor education for the BAM ALLIANCE, senses what is known as the “wall of worry” on Wall Street — that the markets are doing well in spite of…
In this article, we address why we believe the decision of hiring an advisor should not be based solely on fees. The quantity and quality of the services provided varies greatly from advisor to advisor. When you interview potential advisors, you should look for the advisor who gives the best advice and is the best…
Expensive Flip-flops that last, or cheap flip-flops that break – which would you choose? This sketch by Carl Richards illustrates the difference in this purchasing behavior.
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A recent New York Times article profiled Dimensional Fund Advisors and its role as shareholder activists. DFA was ranked No. 1 in shareholder activism by the American Federation of State, County and Municipal Employees in June 2011. The article compared Dimensional with Vanguard, which was ranked last in shareholder activism by the same survey. It…
With the eleventh hour passage of the American Taxpayer Relief Act of 2012, some might think we have put the fiscal cliff behind us. Unfortunately, this is not the case. While the federal government has temporarily suspended the debt limit until May, without government action the mandatory spending cuts associated with the fiscal cliff will begin in March. With this continued level of uncertainty, it might seem like an unnerving time to remain invested and tempting to try to outguess the market…
We use both individual bonds and bond funds for our clients. It can be confusing why one strategy for buying bonds is preferable to another, but in reality the reasoning is fairly straightforward: It comes down to costs, diversification and liquidity needs. Individual Bonds Our overall approach to investing emphasizes taking risk through a diversified…
Author: Weston Wellington, DFA Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond…
For the majority of 2012, events both economic and political have left Americans with more questions than answers. Most investors would agree that recent times have been fraught with uncertainty. How should we approach the uncertainty associated with financial matters, such as what will tax rates be in 2013, or when and how will the Eurozone crisis be resolved? Investors can approach this from three different perspectives.
Overview: Author Carl Richards, director of investor education for the BAM ALLIANCE, shares his views on New Year’s resolutions. The New Year’s holiday is a great time to reflect on what’s really important to us. Spending time with family and friends can help us get focused on where we’re at right now and where we…
Overview: Each year, author Larry Swedroe, director of research for the BAM ALLIANCE, takes a look back at the investing lessons the markets provided in the past year. Introduction Over the majority of 2012, our collective attention was focused on several events: Our continuing fiscal deficits and our ability to continue to fund them What…
Our process for managing credit risk in individual municipal bonds goes well beyond the credit ratings that they are assigned by credit rating agencies. While we believe these ratings have value, and they are one piece of information we consider, we also evaluate other parameters such as the bond issuer’s municipal market sector, municipality revenues…
In the past few years, some investors have asked us whether they should replace a portion of their high-quality bonds or bond mutual fund holdings with strategies ranging from high-dividend stocks to oil and gas master limited partnerships because “rates are low.” We have generally counseled investors that every one of these strategies involves substantially…