Long-Term Climate vs. Daily Market Weather

The Yeske Buie investment philosophy is predicated on certain fundamental worldviews, and we believe that, like the weather, the economy and markets are too complex and chaotic for short-term prediction. But that doesn’t mean there aren’t deep regularities that can be harnessed when investing in the long-term.

Our approach to investing is focused on developing strategies that are grounded in the best scientific evidence the academic world can supply, and then applying those strategies in a consistent and disciplined fashion. This is what led us to make Dimensional Fund Advisors (Dimensional) a significant part of our portfolio construction process, contributing, as it does, many important building blocks to nearly all of our Clients’ portfolios. And over the years, we’ve continued to feel strong philosophical alignment with the team at Dimensional.

We enjoy highlighting the synergies between our two organizations, and the video below from Dimensional is one great example of our continued alignment. In this short video, our strategic partners at Dimensional use an atmospheric metaphor to describe their approach to long-term investing. Interestingly, our own Dr. Dave Yeske drew a similar metaphor in this video – over a decade ago!

VIDEO TRANSCRIPT

It’s common for people to move south in search of more sunshine. But do they expect balmy conditions all the time? No. That’s the weather, which can change from day to day. Instead, they’re relocating for the climate, the conditions they expect over the long term. Because while it will often be sunny, people know a thunderstorm and roll through.

Daily stock movements are like the weather – they vary from day to day. While some days will bring rain, you invest because you expect to be rewarded over time. Focus on the long term.