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Thinking About Stock Market Volatility

Category: Investing » Foster Group Investment Principles
By Kent Kramer
07/11/2022

What caused the stock market to rise by over 20% in the second quarter of 2020 even as the COVID pandemic was out of control? How about the over 11% rise in the fourth quarter of 2021 as inflation ticked up and the Fed was warning of rate increases? It seems a little more obvious why the US stock market has fallen in the first 6 months of 2022, but should it have fallen more…or less?

Speeding Tickets & Investing

Category: Investing » Foster Group Investment Principles
By Zach Dalluge
06/13/2022

Recently, I received a gift from the Iowa State Patrol in the form of a speeding ticket. In reflecting on this experience, it occurred to me that I took an unnecessary risk to attain something I didn’t need and ended up sacrificing money I didn’t have to lose.

Barbell Portfolios Can Be Hard To Hold On To

Category: Investing » Foster Group Investment Principles » Align Purposes and Portfolio
By Marcus Iwig
11/03/2021

Barbells work great at the gym because they put weight on a bar in such a way that it’s balanced, leaving room in the middle for someone to use it to workout. We often see portfolios that are designed like a barbell at the gym: lots of risk in one account and lots of cash or very short-term securities in another. In aggregate, it might produce some balance, but the reality is that it can create some real challenges.

Equilibrium Markets in the Time of COVID

Category: Investing » Foster Group Investment Principles » Accept Uncertainty
By Guest Blogger
09/09/2021

Over the years, Foster Group has utilized a number of mutual funds and exchange traded funds managed by Dimensional Fund Advisors (DFA). DFA was founded in 1981 on the idea of making academic investment research and empirically based portfolio management accessible to investors. In this article, Professor Kenneth French describes how markets responded to the events surrounding the COVID-19 pandemic.

What’s Your Best Buy: Firm Foundation or Castle In the Air?

Category: Investing » Foster Group Investment Principles » Avoid Predictable Disappointments
By Kent Kramer
08/13/2021

If an investor could discover the true worth of a company, a piece of real estate or even an idea, where “true worth” equated to the future value or price that others would pay, success would be almost certain to follow. Those opportunities that were priced significantly lower than the future value would be automatic buys. The one’s with higher prices today than the future price would be ones to avoid. If only it were that simple!