Déjà Vu All Over Again
First Quarter Market Review 2019Once of the reasons that Step By Step Financial is a Dimensional Fund Advisor is DFA's focus on data driven investment strategies, and nowhere is that better reflected than in their quarterly market reports. These are great tools for not only us as professionals, but also for the private investor. The following excerpt from the conclusion starting on page 18 is an excellent example.
Investment fads are nothing new. When selecting strategies for their portfolios, investors are often tempted to seek out the latest and greatest investment opportunities.
Over the years, these approaches have sought to capitalize on developments such as the perceived relative strength of particular geographic regions, technological changes in the economy, or the popularity of different natural resources. But long-term investors should be aware that letting short-term trends influence their investment approach may be counterproductive. As Nobel laureate Eugene Fama said, “There’s one robust new idea in finance that has investment implications maybe every 10 or 15 years, but there’s a marketing idea every week.”
After reviewing the data (which is fascinating!), read the conclusion on pages 18-19 in this first quarter market review:
- WHAT’S HOT BECOMES WHAT’S NOT
- THE FUND GRAVEYARD
- WHAT AM I REALLY GETTING?