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Editor’s note: We have been teaching investors how to use Vanguard and Dimensional Fund Advisors funds for more than a decade. Here’s an update on how they compare.
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In this update to one of the most important items in our article library, Paul Merriman shows how a series of simple but powerful concepts can put patient investors far ahead of the crowd. This 2008 revision updates all reported returns to include the year 2007.
If you are a serious investor, this article could be one of the most important things you'll ever read. I'm going to show you the very best investment strategy that we know, the strategy that's behind the way we manage the majority of the money we invest for clients.
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Many do-it-yourself investors want solutions they can implement once, then leave alone. Can individual investors adopt a strategy that's so good it will meet their needs from age 21 to 91? In this article, FundAdvice.com Publisher Paul Merriman and Managing Editor Richard Buck tell why they think the answer is yes.
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Great chefs know that it takes more than the right ingredients to make an outstanding meal. If you put everything together in just the right way, ordinary ingredients can turn into magic. In this article, Jeff Merriman-Cohen shows how the same thing is true for investing.
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We’ve been managing money for clients since
1983, and the best way we have ever found to build a buy-and-hold portfolio is using
no-load asset-class index funds managed by Dimensional Fund Advisors (DFA). These funds
were created to help investors pinpoint the most productive types of assets, as identified
in academic research.
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This all-equity portfolio represents what we believe is the very best
way for investors to diversify their investments using mutual funds
available to the public. It’s designed to provide exposure to the nine
most important equity asset classes that we recommend. No single fund
family, including Fidelity and Vanguard, has open funds in all nine.
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For serious buy-and-hold investors, asset allocation and diversification are by far the most important decisions. They are more important than selecting the right mutual funds and individual stocks. They are more important than exactly when you get into the market and when you finally exit.
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Perhaps the biggest job that any investor has is managing risk. If you take too much, you could be flirting with disaster; if you take too little, you could cheat yourself out of the returns you need to take care of yourself, your family and your heirs. In this article, Paul Merriman shows how to get this important equation just right.
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John Bogle, founder
and retired chairman at Vanguard Group, has done a great deal for
individual investors over the past 30 years.
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Sidebar to:
In Stock Investing, Size Matters
In the stock market, "large-cap" and "small-cap" are insiders’
shorthand for a simple bit of mathematics that tells the overall value
that investors place on various public companies.
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