Our investment philosophy is simple. We believe:
- Your investment portfolio exists to provide you with the cash flow required to achieve your lifestyle and giving goals.
- Your portfolio strategy (mix of stocks, bonds, and cash) should not be based solely on your risk tolerance or age; there are many factors to consider. Your strategy should also be capable of earning the returns required to achieve your financial life goals.
- High portfolio management fees and trading costs should be avoided because they can erode your chances of having a favorable investment experience.
- Your portfolio strategy should be stress-tested over challenging, average, and favorable economic environments. Doing so can help you avoid surprises and understand the potential outcomes of different strategies.
- Flexible trading strategies can result in lower costs.
- Informed investors make better decisions when developing a portfolio strategy and selecting an investment approach.
*Historical returns do not guarantee future performance.
Why we use Dimensional
One Life can access over 10,000 investment options on your behalf. Most of the time, we invest through Dimensional Funds, though we are not required or obligated to use Dimensional.
We Like Dimensional for 3 Simple Reasons
1. Dimensional Takes an Academic Approach to Investing.
Many mutual fund companies start with their philosophy and find the data to support it. Dimensional’s approach begins with academic research. Dimensional uses that data to help construct their investment solutions.
2. Dimensional Tilts Their Portfolios Towards Higher Expected Returns.1
Using academic research, Dimensional has identified four premiums of higher expected returns for equities.
Click here to learn more about the four premiums.
3. Dimensional Believes in the Power of Markets.
Many active stock fund managers believe they have the skill to beat the market. As you can see, in the SPIVA U.S. Scorecard (p.9), more than 90% of stock fund managers failed to beat their benchmark over the 15 year period ending 12/31/2018 in almost every category.
Dimensional takes a different approach. Dimensional believes that market prices are very efficient and that trying to beat the market over the long run is a losing game.
See below for a summary of Dimensional’s performance. As you can see on the chart, 11 of 13 of Dimensional’s US Equity Flagship Funds have been able to outperform their respective benchmark over the past 20 years.
How Has Dimensional Performed? 3
Disclosures – Read More
All written content is for information purposes only. Opinions expressed herein are solely those of One Life Financial Group Inc. and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by One Life Financial Group Inc. a Registered Investment Advisor in the State of Minnesota. One Life Financial Group Inc. is not affiliated with or endorsed by the Social Security Administration or any government agency, and are not engaged in the practice of law.
One Life Financial Group uses Dimensional funds within client portfolios. It is important to disclose the following:
- One Life does not receive any monetary compensation (commissions, referral fees, service fees, etc) for recommending or purchasing Dimensional funds on behalf of One Life clients.
- One Life does not have an obligation or commitment to use Dimensional funds within client portfolios.
- One Life receives academic research, client articles, videos, and educational resources. These resources are used to educate clients, team members of One Life, and to develop portfolios for clients.
- One Life will use investment solutions outside of Dimensional funds if One Life feels there is a better solution for our clients.
1 Higher expected returns are calculated from historical performance. Past performance does not guarantee future returns.
Source: Dimensional Fund Advisors LP
2 All figures represent 10-year annualized compound returns (%) in US dollars. US size premium: Dimensional US Small Cap Index minus S&P 500 Index. US relative price premium: Fama/French US Value Research Index minus Fama/French US Growth Research Index. US profitability premium: Dimensional US High Profitability Index minus Dimensional US Low Profitability Index. Dev. ex US size premium: Dimensional Intl. Small Cap Index minus MSCI World ex USA Index (gross div.). Dev. ex US relative price premium: Fama/French International Value index minus Fama/French International Growth Index. Dev. ex US profitability premium: Dimensional International High Profitability Index minus Dimensional International Low Profitability Index. Emerging Markets size premium: Dimensional Emerging Markets Small Cap Index minus MSCI Emerging Markets Index (gross div.). Emerging Markets relative price premium: Fama/French Emerging Markets Value Index minus Fama/French Emerging Markets Growth Index. Emerging Markets profitability premium: Dimensional Emerging Markets High Profitability Index minus Dimensional Emerging Markets Low Profitability Index. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Dimensional indices use CRSP, Compustat and Bloomberg data. Fama/French indices provided by Ken French. S&P data copyright 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. MSCI data © MSCI 2018, all rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. See “Index Descriptions” for descriptions of Dimensional and Fama/French index data. Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP.
Source: Dimensional Fund Advisors LP
3 “Long-term” refers to Dimensional flagship equity mutual funds with at least 20 years of performance. All funds are US domiciled. The current value of a hypothetical $100,000 investment is reported net of all advisory fees and expenses and includes reinvestment of dividends and other earnings. The initial investment may be higher or lower than the initial amount required to invest in each fund. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index. Past performance is not a guarantee or prediction of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, visit us.dimensional.com.
Source: Dimensional Fund Advisors LP