This Fund's Performance Reveals an Important Lesson for Investing Today

Dimensional Fund Advisors has one glaring hole in its fund performance. It offers an important lesson for investors today.

Le Penseur, Auguste Rodin, 1904, bronze (Musée Rodin) (photo credit: CrisNYCa)

I feel bad for the people in text groups with me. Sometimes, I can fall down some esoteric rabbit holes, and they have to listen to me rant about it for a few days. 

I fell into one of those rabbit holes this week that I want to share with you. So, indulge me for a minute. I promise some interesting investing lessons can come out of this endeavor.

Dimensional Fund Advisors doesn’t have a lot of name recognition among individual investors like BlackRock or Vanguard. What it lacks in brand recognition, it makes up in plenty of other categories. With over half a trillion in assets under management and a roster of advisors and directors with several Nobel Laureates in Economics to their names, it is one of the more academically-credentialled funds out there.

Dimensional’s CIO gave an interview recently, and part of me wondered if he was speaking some alien language because their investing strategies and philosophies sounded so complex and foreign to me. It was one of several interviews that shook my confidence that I could even cut it as an investor. 

In an attempt to restore some of my confidence, I wanted to see if Dimensional’s investment performance lived up to the claims of its management. What I found out carries a lot of poignant lessons for investors.

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