Investment Philosophy

Our investment philosophy is grounded in rigorous academic research. We adhere to the strategies developed through Dimensional Fund Advisors (DFA), one of the world’s largest and most respected mutual fund companies. DFA is always researching tomorrow’s solutions today. They do this through deep working relationships with leading financial economists. By acting as a conduit between scientists and practicing investors, DFA has created investment strategies and consulting technologies to meet the evolving needs of investors.

Dimensional’s process explores every aspect of dynamic real-world markets, including portfolio architecture, trading methodology, and tax management. Their investment staff is involved in research efforts through its daily trading activities, resulting market studies, and Investment Committee participation. Clients benefit when research and experience combine to solve new investment challenges.

Markets Work
Central to our investment philosophy is the belief that markets work and are very efficient in pricing securities. Securities markets throughout the world have a history of rewarding investors for the capital they supply. Companies compete for investment capital, and millions of investors compete with each other to find the most attractive returns. This competition quickly drives prices to fair value, ensuring that no investor can expect greater returns without taking greater risk.

Current market prices incorporate all available information and expectations about the future, and are therefore the best approximation of intrinsic value. Price changes are generally due to unforeseen events and cannot be predicted with any consistency. Pricing errors occur, but they do not do so in predictable patterns and it is difficult to recognize them in real time.

Financial market movements may not always appear rational and prices may not always be “correct,” but market forces are so competitive that we believe it has yet to be demonstrated that any investor, or group of investors, can consistently profit at the expense of others, or outperform the market as a whole. The idea that markets work is widely acknowledged by financial professionals and academic researchers alike. The implications of market efficiency are profound and affect a wide variety of financial and investment decisions.


For the 88 years from 1926 to 2013, the compound annual growth rate of return was 11.7% for the US Small Cap Index, 10.1% for the US Large Cap Index, 5.5% for the Long-Term US Government Bonds Index, 3.5% for US Treasury Bills, and 3.0% for US Inflation (CPI). US Small Cap Index is the CRSP 6-10 Index; US Large Cap Index is the S&P 500 Index®; Long-Term US Government Bonds Index is 20-year US government bonds; US Treasury Bills are One-Month US Treasury Bills; US Inflation is the Consumer Price Index. CRSP data provided by the Center for Research in Security Prices, University of Chicago. The S&P data are provided by Standard & Poor’s Index Services Group. Bonds, T-bills, and inflation data© Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).  Indexes are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results.

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