A successful long-term investment experience is pretty boring on a daily or weekly basis. Usually, there aren't any significant moves or changes that need to be made. But there are many small decisions at the portfolio level that can really add up over time. For example?
- Strategically rebalancing your portfolio with periodic cash flows
- Continuing to dollar cost average during difficult markets
- Minimizing fees and taxes
- Vetting and incorporating meaningful updates in academic research
- Sticking with your plan even when things don't appear to be "working"
- Not chasing the latest hot investment strategy with sizzling returns or a compelling story
Within a portfolio, the managers of a mutual fund should take a similar approach. There are small incremental decisions they can make over time that potentially improve their results. Watch the video below and hear from Dimensional CEO David Booth about how the little things add up over time:
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