Quarterly Letters

During the past quarter, we have witnessed the strongest rebound since the markets began falling in late 2007. Global stock markets climbed sharply in April and May, and then held onto most of their gains during the month of June.  The following chart shows the 3-month, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to […]

When returns are poor (and sometimes even when they’re good), investors wonder if things have changed. Is this time different? Does a buy-and-hold strategy still make sense? Well, the reality is that nothing has really changed. This is just how markets work.  Not surprisingly, I am advising my clients to “stay the course” (at the minimum) and to invest new […]

Happy New Year!  Yes, you are still alive and breathing!  The year 2008 was the second worst ever for the U.S. stock market. Only in 1931 did the Standard & Poor’s 500 Index fall by more than 37 percent, turning in a worse showing than 2008. Our overall returns for the full year ranged from -10% to -42%, depending on […]

I want to begin this quarterly letter by acknowledging how wise you have been to “stay the course” during the most severe stock market decline since the Great Depression.  I am very inspired by your courage and commitment to keep a long term perspective. The turbulence that rocked the financial markets over the last several weeks has terrified most investors […]

The volatile investment climate has continued. Global stock markets climbed sharply in April and May, only to fall back to their lowest levels of the year in June.  The following chart shows the 1-year, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index:Market Returns for the period ending June 30, 2008 […]

As you may have heard, it has been a rough quarter for both U.S. and international equity markets.  Nevertheless, a well-diversified portfolio should have weathered the storm much better than an undiversified portfolio.  As you can see from the chart below, the worst performing asset classes this quarter were U.S. large stocks, U.S. small stocks, and emerging markets. The best performing […]

Happy New Year!  The year 2007 was the most volatile year we have had since 2002. Our overall returns for the full year ranged from 4% to 7%, depending on the level of risk in your portfolio.  So, it turned out better than you probably thought!  As you can see from the chart below, the worst performing asset classes were […]

Despite a rocky start in July, your portfolio has fully recovered, as evidenced in the chart below.  The one year returns are as strong as any period during the past five years.  As I’ve said many times, you simply cannot predict the markets, and this quick recovery is a very welcome surprise!  While large U.S. stocks (represented by the S&P […]

It’s easy to see what long-term stock market investors earn—just look at the averages, right?  Maybe not, according to some new research by Ilia Dichev at the University of Michigan.  From Jan. 1926 through this past April the Standard & Poor’s 500 Index grew at an annualized pace of 10.45%. But Dichev’s research on investor cash flows into and out […]

Please take a moment to remember the 3.3% decline in the Dow, which occurred less than a month ago (and was caused by the sell off in Asian markets).  Now, look at your performance reports.  You’ll notice that your investments are up for the quarter by two to three percent, which is a great quarterly return.  It always amazes me […]