A Banner Year

The following commentary was forwarded to me by my friend and fellow coach, Fred Taylor:


There really isn’t any reason to brag about any securities firm having a “banner year” when the market is in an upward trend, as it has been, over the last year (and beyond). However, what is particularly interesting is what this particular banner year has to tell us about emerging trends in the investing universe.


Most who have been with us since the early nineties know that we made an academically based, strategic decision to change our investment philosophy to one that was based upon a passive approach (see Eugene Fama, recent Nobel Laureate, for the Efficient Market Hypothesis); Modern Portfolio Theory (wide, non-correlated global diversification) and the Fama-French Three Factor Model. At that time, actively managed portfolios were all the rage as the tech and dot.com booms emerged as well as the philosophies of growth at any price, new paradigm and “value is dead.” It isn’t always easy to be the different kid in the group, but with full confidence in the decades of independent academic research that supported our philosophy of investing, we successfully labored on.


It’s quite nice to be both recognized and, to a very large extent, vindicated as others start to come around to your way of thinking and your investment world view. This was highlighted by the recent headline in the trade journal: Investment News regarding DFA’s recent performance. As most are aware, DFA (Dimensional Fund Advisors) provides the underlying funds that we utilize in the construction of our portfolios. I’ve written before why we utilize these funds, so I’ll not go into that again. More to the point, I’ll let the story provided below, speak for itself. However, let me also point out that our group of advisors now generate more investment dollars for DFA than any other independent advisor (coaching) group!



Copyright (c) 2013 Frederick C. Taylor All Rights Reserved
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