Resource · Investing
The Science Behind Your Portfolio
The research, the premiums, and the design choices behind the portfolios we build.
There are three broad ways to invest in stocks: picking winners, tracking an index, or following the research. This piece explains the approach we use and why.
What’s inside
Three ways to invest
Stock picking, indexing, and the research-based approach developed by Dimensional Fund Advisors.
What the evidence says
What long-term studies of mutual funds show about how hard it is to beat the market after costs.
Why indexing has limits
Quieter drawbacks of index funds, from how indexes are built to when they have to trade.
Three patterns behind returns
Company size, value, and profitability, explained in plain language, along with the stretches when they lag.
How we put it into practice
The day-to-day decisions that set this approach apart from a typical index fund.
What it means for retirement
How the approach applies while you save and while you spend, and our five commitments to you.
Know why your portfolio looks the way it does
Download the piece and bring your questions to your next review. Past performance is no guarantee of future results. These patterns don’t appear every year.
This content is for informational purposes only and is not individualized advice.