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Financial Happenings Blog
Tuesday, January 30 2007

We use the Dimensional investment funds, as a sophisticated and powerful investment approach.

I often have a hard time explaining exactly the Dimensional advantage - what it is, how it works, the research behind it, the great minds (nobel award winners) who have fashioned this approach.

We have just pot together a document for clients that shows the power of the strategy, and I thought it worth mentioning the results of the 5 year returns, after costs.

If you had invested $100,000 into an Australian share index fund, that simply got the average return from the Australian sharemarket over 5 years (to the end of December 2006), your $100,000 would have growth a very healthy $200,000 (assuming dividends are re-invested).

The Dimensional funds focus on small companies and value companies as sources of additional investment returns.  If you had invested $100,000 in the Dimensional Small Companies fund it would now be worth $255,000.  If you had invested $100,000 in the Dimensional Value Companies this would have growth to $254,000.

That is the power of an effective investment approach, patience, and slightly above average market returns at work.





Posted by: Scott Francis AT 08:43 pm   |  Permalink   |  Email
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