Business

Weekly Clarity Coaching 3-2-11 / DFA Ranked #1

Two weeks ago, Barron's revealed its annual mutual fund rankings and which fund family do you think they rated as the best for 2010? I'll give you a hint. It wasn't Vanguard, Fidelity, or American Funds. These are by far the three largest mutual fund families and the names familiar to most people. (Such is the power of advertising dollars, compliments of their investors!)

 

So, which family was ranked as #1? It was Dimensional Fund Advisors (DFA) - the fund family we use as the building blocks for all of our managed portfolios. Most people have never heard of this fund family. You may be asking yourself why and this is because they spend absolutely zero dollars on advertising!

And why were they #1 last year? The very short video linked below gives three reasons for this exemplary performance:

 

1) They didn't take money off the table.

2) They didn't flee to defensive stocks.

3) They didn't hide in Treasury bonds.

 

Sounds like our Academic approach to investing, doesn't it?

 

Click below for the video. The video does however drop an inference that the only reason we did as well as we did was due to the risk involved with our investments, however we did what we do every year. We didn’t try to beat the market; we only attempt to get what the market with bear.

 

http://online.barrons.com/video/the-best-mutual-fund-families/CA486FF9-A03C-4232-8132-5AF2DA72D92D.html

 

Visit Financial Abundance's website and send Paul a note about the show or a question that you would like to have answered under the "Ask the Coach" link.

 

http://www.FinancialAbundanceInc.com or 866-867-5745

 

Paul Nichols is the President of Financial Abundance, Inc., a Registered Investment Advisor based in Central Pennsylvania with offices in State College and Lewisburg in Centre County. Please don't hesitate to call our office at 814-867-5745 or send Paul an email at  pauln@financialabundanceinc.com  with any questions that you may have.



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