Over the last 20+ years in the financial advising business, I have altered my portfolio construction techniques a number of times. These changes were quite drastic in the beginning and they have become minor tweaks in the past 5 or so years.
In my first year I believed, largely because it was what I was told, that the analysts at Morgan Stanley were better stock pickers and market timers than the rest (who were told the same story). Over time, this proved false… albeit not just for me.
I switched firms multiple times, learning new things, trying new products and adopting new philosophies. I started my own firm in 2002 and to better serve our clients I’ve attended thousands of presentations on financial planning and portfolio design at a hundred conferences in both industry and academic settings since then.
The best deep dive conference I have been to was the Dimensional Fund Advisors (DFA) “Foundations Conference” which I attended 5-6 years ago. DFA is committed to applying academic research to their portfolio construction in a way that I have never seen before. They call it the “science” of investing and the math nerd in me absolutely loved it. Today, DFA makes up the core of our client portfolios.
When I saw Robin Powell’s interview of DFA’s Co-CEO, I had to share it.