Key Questions for Long-Term Investors

Whether you’ve been investing for decades or are just getting started, at some point on your investment journey you’ll likely ask yourself some of the questions below. Trying to answer these questions may be intimidating, but know that you’re not alone. Your financial advisor is here to help. While this is not intended to be...

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Navigating the Proposed Tax Legislation

On Monday, The House Ways and Means Committee released their proposed legislation titled “Responsibly Funding Our Priorities.” The preliminary tax legislation, which circulated on and off Capitol Hill, would raise as much as $2.9 trillion to pay for most of President Biden’s sweeping expansion of the social safety net by increasing taxes on the wealthiest...

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Tuning Out the Noise

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as affecting your financial well-being can evoke strong emotional responses from even the most experienced investors. Headlines from the so-called lost decade–the 2000s, when the S&P 500 ended below where it...

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‘Everything Screams Inflation.’ How to Interpret the Headlines.

How quickly things change. Two years ago, the New York Times reported, “Federal Reserve officials are increasingly worried that inflation is too low and could leave the central bank with less room to maneuver in an economic downturn.”1 More recently, a Wall Street Journal article presented a sharply different view, with a headline that likely touched a raw nerve among...

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Equilibrium Markets in the Time of COVID

The pandemic snuck up on investors. On December 31, 2019, the government in Wuhan, China, confirmed that dozens of people were being treated for a new virus. China reported its first death from the virus on January 11, 2020, the World Health Organization declared a global emergency on January 30, and the first death outside...

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How Your Retirement Accounts Could Face Up to 70% in Taxes

Many people have spent a lifetime saving and accumulating money in tax-deferred retirement savings vehicles like the 401(k), 403(b), 457, IRA, SEP IRA, or TSP Plan (non-Roth retirement accounts). As you make contributions into these plans, you are making the decision to defer income (and income tax) today. The money within these vehicles has the...

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Researching Retirement: Myths and Realities About Asset Allocations

Dimensional’s Research team recently evaluated the ability of common investing and spending strategies to support smooth retirement consumption. We used simulations to compare an income-focused allocation with two wealth-focused allocations that are inspired by real-world target date funds.1 We found that the income-focused allocation delivers similar retirement income with lower risk. Our results differ from conventional wisdom about...

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Equity Investing Fixed Income Investing: Investment Principles

US consumer prices were up by 5.4% for the year ending June 2021, the largest annual increase since August 2008.1 Naturally, inflation is at the center of attention for many US investors. Our recent paper US Inflation and Global Asset Returns provides some good news for investors looking to outpace inflation over the long term. But it also...

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The Next Normal

A year ago, at the end of March 2020, the S&P 500 was down nearly 20%1 and the world was scrambling into lockdown. Many experts wrote articles telling us where we would be in a year. I don’t remember reading any that said the S&P 500 Index would be up 56% over the next 12 months....

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Climate Change and Asset Prices

The economic effects of climate change may be substantial—and may unfold over decades. Climate change can, therefore, affect the future payoffs of a wide range of assets. Given this strong potential impact, a central question is whether markets do a good job of reflecting climate risk in asset prices. Since the effects of climate change...

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