Articles (178)

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  • jackson

    To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania?

    686
    by Dimensional Fund Advisors — Tuesday, March 23, 2021

    Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional ...Read More

  • DFA

    Tales from the Crypto: How to Think About Bitcoin

    400
    by Dimensional Fund Advisors — Wednesday, March 17, 2021

    Bitcoin and related cryptocurrencies (now numbering in the thousands) are the subject of much debate and fascination. Given bitcoin’s dramatic price changes, it is not surprising that many are speculating about its possible role in a ...Read More

  • Dimensional Fund Advisors

    The Performance of Late-Cycle Premiums

    790
    by Dimensional Fund Advisors — Thursday, February 25, 2021

    The media has been sharpening its focus on cycles lately, but not in anticipation of the Tour de France. Rather, the financial media’s spotlight is on business cycles. A common refrain from the industry is that the performance of certain groups of stocks is tied to the ...Read More

  • jackson

    FANMAG: Because FAANGs Are So Yesterday

    967
    by Dimensional Fund Advisors — Thursday, February 18, 2021

    A handful of large technology stocks have garnered attention for outsize returns in recent years. Collectively referred to by the FANMAG acronym, Facebook, Amazon, Netflix, Microsoft, Apple, and Google all substantially outperformed the US ...Read More

  • jackson

    Flexibility in Practice: How We Handled GameStop

    835
    by Dimensional Fund Advisors — Tuesday, February 16, 2021

    After peaking, GameStop’s subsequent fall in price put it in the low profitability growth space of the small cap market, which we exclude across our equity portfolios due to low expected returns. Our daily process allowed us to again respond quickly. By February 3, we had ...Read More

  • jackson

    Gauging Market Expectations?

    870
    by Dimensional Fund Advisors — Thursday, February 4, 2021

    A recent flurry of return spikes for a handful of US stocks has captivated investors and noninvestors alike. Wall Street news trending on social media even amid an NFL playoff season is indeed an unusual event.So, what should investors make of these dramatic price movements? A ...Read More

  • jackson

    Investing in FAANG Stocks: Should You Expect Unexpected Returns?

    1,090
    by Dimensional Fund Advisors — Thursday, January 28, 2021

    Investment returns have two parts: the expected return and the unexpected return. The expected return is the best guess of what will happen based on all the information currently available. The unexpected return is the surprise, the difference between what does happen and what ...Read More

  • murray@ifa.com

    2020 Q4 Market Review

    1,396
    by Murray Coleman — Monday, January 18, 2021

    Patient investors who kept their tilts to small-cap and value stocks were rewarded in the year's final ...Read More

  • jackson

    Market Review 2020: Looking Back on an Unprecedented Year

    1,629
    by Dimensional Fund Advisors — Monday, January 11, 2021

    The year 2020 proved to be one of the most tumultuous in modern history, marked by a number of developments that were historically unprecedented. But the year also demonstrated the resilience of people, institutions, and financial markets. The novel coronavirus was already in ...Read More

  • jackson

    The Right Thing, Not the Easy Thing

    1,311
    by Dimensional Fund Advisors — Wednesday, November 25, 2020

    New entrants into the field of systematic investing must look for ways to differentiate themselves. Impressive backtested performance is one way to stand out. But are these backtests robust? Are they likely to withstand the challenges of real-world implementation? Historical ...Read More

  • murray@ifa.com

    2020 Q3 Market Review

    1,663
    by Murray Coleman — Tuesday, November 3, 2020

    IFA's stock and bond indexes kept gaining ground in the year's third quarter. Here's a breakdown of what took ...Read More

  • Wei Dai, PhD Senior Researcher and Vice President & Philipp Meyer-Brauns, PhD Senior Researcher and Vice President

    What a Company's Emissions Tell Us about Its Expected Returns

    1,497
    by Wei Dai & Philipp Meyer-Brauns — Wednesday, October 28, 2020

    Climate scientists have identified greenhouse gas (GHG) emissions as the largest contributor to global climate change.1 As a result, many investors are looking to reduce their emissions exposure through their portfolios and wondering if doing so would affect their expected ...Read More

  • Murray Coleman

    Too Few Investors Taking 'Big Picture' View: Study

    3,869
    by Murray Coleman — Updated: Friday, October 16, 2020

    How big of a difference can an objective set of professional eyes add to an investor's overall financial success outside of managing a portfolio? A new study takes a look at just that question. Instead of considering hypotheticals, however, this report goes directly to the ...Read More

  • Dimensional Fund Advisors

    An Exceptional Value Premium

    1,792
    by Dimensional Fund Advisors — Friday, October 9, 2020

    It’s probably not news to most value investors that the value premium has struggled over the past decade. What might be news is just how extreme an outlier recent value stock underperformance represents. The periodic returns for value versus growth in Exhibit 1 convey a ...Read More

  • Dimensional Fund Advisors

    Large and In Charge? Giant Firms atop Market Is Nothing New.

    1,509
    by Dimensional Fund Advisors — Thursday, October 1, 2020

    A top-heavy stock market with the largest 10 stocks accounting for over 20% of market capitalization and a marquee technology firm perched at No. 1? This sounds like a description of the current US stock market, dominated by Apple and the other FAANG stocks,1 but it is actually ...Read More

  • Weston Wellington

    Is the Stock Market Divorced From Reality?

    1,642
    by Weston Wellington — Thursday, September 24, 2020

    I have been sheltering in place on a former dairy farm in rural New Hampshire—surrounded by more Scotch Highland cattle than people—and relying on my iPhone and Microsoft Surface Pro to keep in touch with the office via email and Zoom video. I haven’t sat in a ...Read More

  • Mark Hebner and IFA Contributors

    Misuse of the Law of Large Numbers: The Gambler's Fallacy

    26,656
    by Mark Hebner and Murray Coleman — Updated: Tuesday, September 15, 2020

    If you have ever spent any time in a casino, it is likely that you have seen supposedly random events that appeared to be non-random. Perhaps the roulette wheel came up red seven times in a row, for example. If your reaction was to place a large bet on ...Read More