Letting the Markets Do The Work For You
In episode #6 of Grow Money Business, Kelly Klingaman joins us to talk about investing and what the markets are doing. Kelly is a regional director at Dimensional Fund Advisors. Her firm is one of the investment management giants in the USA and also a pioneer in incorporating empirical evidence and research in investment philosophy, strategies and execution. In this episode, Grant and Kelly talk about investment strategies, domestic versus international investments, sustainable investments and much more.
[02:45] Kelly’s background and her role at DFA – Kelly talks about how she got into the field of investment management and her current work with financial advisors.
[04:50] DFA’s unique investment – Kelly explains why DFA does not offer mutual funds directly to the public and why they go through the financial advisor channel only.
[13:40] Story of Dimensional Fund Advisors – Kelly talks about the firm’s history and growth over almost four decades.
[16:35] Identifying better performing securities – Grant and Kelly talk about using historical data analysis of different types of stocks and markets to identify characteristics of securities that tend to outperform others.
[26:45] Being right consistently – Kelly describes what factors contribute to their investment decision making.
[34:01] Value of not being specific – Kelly explains how lots of people are specific on the companies they want to buy and how they could have had better opportunities had they been open to more options.
[41:14] International investing – Kelly and Grant talk about the value of diversifying investments in international markets.
[46:47] DFA’s approach to securities lending – Kelly explains how her firm participates in securities lending.
[53:45] Nobel prize-winning work of Eugene Fama – Kelly talks about how DFA’s involvement with the creators of the Fama and French three-factor model.
[1:00:17] Fixed income securities – Kelly explains what fixed income securities and what goes in to decision making around them.
[1:11:12] Sustainable and socially conscious investing – DFA’s constantly evolving approach to screening and rating investments based on how companies are affecting the environment.