ARTICLES

How to Think about Financial Models

Checking the weather? Guess what—you’re using a model. While models can be useful for gaining insights that can help us make good decisions, they are inherently incomplete simplifications of reality. In investing, factor models have been a frequent topic of discussion. Often marketed as smart beta strategies, these products are based on underlying models with…

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The Importance of Time Horizons in Investing

The following set of charts are great visual aids for showing the benefits of long-term investing in the stock market as well as the shortcomings of short term investing. The charts can help investors plan and set expectations for investing in the stock market. Two terms to understand the charts are below. DFA Domestic Balanced…

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Getting to the Point of a Point

A quick online search for “Dow rallies 500 points” yields a cascade of news stories with similar titles, as does a similar search for “Dow drops 500 points.” These types of headlines may make little sense to some investors, given that a “point” for the Dow and what it means to an individual’s portfolio may…

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