Decisions: Past, Present and Future

What do you have from 2002 or 2003 which you still value?

What relationships? Any investments? Any stocks or stock funds?

What did you acquire or begin 15 years ago which are still important to you?

Remember, in 2002, the iPhone and Facebook had yet to be invented, Netflix came by DVDs in the mail and Blockbuster stores were still everywhere. Lots has changed since then!

In October 2002, I attended my first BAM National Conference, when we were initially investigating how to provide investment advisory services. I quickly realized BAM Advisor Services was the right group of people with the right tools and ideas for us. BAM would be the source for the investment philosophy and intellectual resources we would need to advise our future clients.

Our introduction to BAM and their investment philosophy led us to the investment approach of a major and growing mutual fund group, Dimensional Fund Advisors (DFA), which would become the primary stock mutual fund provider for the vast majority of our clients’ stock investments. We have been pleased with this decision.

For the 16th straight year since 2002, I will be traveling this weekend to attend the BAM National Conference in St. Louis.

Have you done anything for 16 straight years? If you have, and you were not going under duress, it must be very worthwhile, right?

As we are nearing our 15th year of providing investment advisory services, we realize the critical importance of these early decisions. These decisions have had a direct and very positive impact on each of you, our clients.

We often say that we cannot predict the future. It’s true….we can’t!

However, you rely on us to help you assess and deal with an uncertain future. You expect us to make good decisions, even with uncertainty, which will have long and important implications for you and others close to you. You judge us by the advice and decisions we make.

When it comes to the quality of these vital decisions, selecting BAM, DFA and our investment principles, we are confident that we selected firms and concepts that would, and have, withstood the test of time, through good and bad markets.

As we look back, and forward, our relationship with BAM and use of DFA funds have been integral in the development of our investment philosophy.  BAM is also a key factor in our firm’s delivering excellent, accurate and responsive service to our clients.

DFA’s stock mutual fund philosophy was new to us in 2002. Today, we feel that DFA is the foundation for the best way to invest serious money for the long term. They have consistently beaten or out-performed their asset category averages over the 15 year period ended September 30,2017.** They are reliable. They are very low cost. They offer tax-efficient funds, whichlower your tax bills for non-retirement accounts. They are not dependent on one or two star money managers or analysts for their results. They have a methodology and culture which we are confident will provide strong returns well into the future.

DFA confirmed their 15 year outperformance relative to benchmarks and similar competitor funds across a variety of investment categories in a chart this week. This data, available upon request,** shows that DFA funds we have utilized and recommended for the long-term have performed near the top of their respective categories, far above most other funds in respective categories and have outlasted the 30-50% of funds which existed 15 years ago that have not even survived the 15 year period ended September 30, 2017.

We are confident in the long term expected returns of DFA’s stock mutual funds. “Combining the category attrition and the surviving funds with lower net return ranks gives a better sense of how Dimensional’s equity funds have fared relative to their peers…The results suggest that investors in Dimensional’s equity funds would have enjoyed strong relative performance over the past 15 years in each of the equity asset classes shown.”**

We cannot predict the future, but we are confident in our decision making. As the world, and the financial markets specifically, are continuously evolving and changing, we and the firms we work with must also continue to grow, change and be continually learning. We are always open to new ideas and concepts.

This is why we continue to attend the BAM Annual Conference every year. These are not rah rah sales sessions. This is why Keith and I travel to participate in multiple peer-peer learning group sessions every year and peer calls throughout the year. We ask questions. We listen to top speakers across diverse topics. We discuss client issues. We gain knowledge we can bring back and use as we provide advice and guidance to you, our clients. That is part of what we will be doing from Saturday until Tuesday with our BAM investment peers from across the country.


This week’s takeaway: In 2002-03, we began the process of forming and starting what is now WWM, a thriving financial advisory firm. We partnered with BAM Advisor Services and began to invest and recommend DFA stock mutual funds. We expected that each of these firms would provide us and our clients some of the following characteristics: excellence, confidence, reliability, valuable information and consistency.We made the right decisions and they have delivered on our expectations.  For the benefit of our clients.


**Source: Dimensional chart and supporting data: “Relative Performance of Flagship Equity Funds,” as of September 30, 2017. Published October, 2017. Available upon request.

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