“I knew there was this body of work where we actually knew something about financial markets and it was scientifically testable and scientifically demonstrated… (DFA) took all that and put it to work in real life day to day portfolios.” –Jed Fogdall, Dimensional Fund Advisors
Check out this short video where Jed Fogdall talks about his transition from satellite engineering to portfolio management at Dimensional Fund Advisors: Building Satellites and Designing Portfolios
He was drawn to DFA for the same reasons I was. When I first learned of how their portfolios are scientifically engineered and backed by empirically tested research, I knew it would change the way I invested forever….and it did.
Most investors live in the unscientific world of stock picking, market timing and track record investing. I prefer to live in the scientific world of the efficient market hypothesis, modern portfolio theory and the five factor model. These are scientific models that have proven to work in the real world of investing. In fact, Eugene Fama and Harry Markowitz have even been awarded Nobel Prizes in Economics for showing investors how to invest and how markets really work using these models.
Keep in mind that your portfolios are scientifically designed. Even when things are uncomfortable or feel bad, we don’t throw away the science of investing. We try to find the best mix of assets that you can live with if markets go up or down.
I would much rather have the science of investing on my side than gambling and speculating on what I think might happen.