Avantis Vs. DFA and the Winner Is?

On this week's podcast, we dive into my fascinating  six-month journey with AI, exploring how tools like ChatGPT are revolutionizing access to information and informed guidance. Drawing inspiration from Seth Godin's insightful piece, "Education is Free, Learning is Expensive," we'll discuss why true  learning demands commitment and effort, especially in today's information-rich world.

I've discovered AI's power extends far beyond simple fact-checking. It's a game-changer for understanding diverse perspectives, even helping me tailor advice to different generations. My goal is to help  you  leverage this incredible tool to  build a better financial future.

We'll also gain some valuable  perspective on investment returns, especially after the unique first half of the year. While six months isn't a long-term indicator, it's certainly given us plenty to discuss! Many are wondering if now's the time to jump into international equities, especially as they've shown unexpected strength.

Understanding Diversification and Long-Term Investing

I'll share my philosophy on  successful long-term investing as a buy-and-holder: identifying equity asset classes that offer a premium for risk and grow faster than inflation. We'll examine the "ultimate buy and hold portfolio," which strategically blends U.S. and international equities, and analyze its performance over the past six months, comparing it to other popular strategies from Vanguard and DFA.

You'll be surprised to see how closely Avantis and DFA ETFs performed, despite some significant individual fund differences. We'll also delve into the fascinating relationship between the  U.S. dollar's value and international equity performance. For a deeper dive, I highly recommend checking out this illuminating table from Brandes Investment Partners:  https://www.brandes.com/insights/chart-of-the-week/us-dollar-and-international-equities-03312023. It clearly illustrates how the dollar's strength and weakness correlate with international returns, offering historical examples of how these trends ebb and flow. Chasing returns isn't the answer, but a diversified, buy-and-hold approach can significantly  reduce volatility  and smooth out your equity returns—a major advantage, especially for retirees.

The Allure and Nuance of Long-Term Returns

We'll then shift our focus to  long-term performance data, specifically looking at the last 15 years through June 2025. You might be surprised to learn how the S&P 500, growth stocks, and even Berkshire Hathaway have compounded over this period, and how these returns compare to historical averages and expectations. While U.S. growth has been a clear winner recently, we'll discuss why  historical norms suggest a different long-term outcome  for value and small-cap stocks.

I'll also address the popular  Total Market Index  and offer a candid take on whether it truly outperforms the S&P 500 for those not seeking broader diversification. We'll explore why, in some cases, a simpler approach might be just as effective, or even more so.

The Power of Information and Future Tools

Finally, I'll emphasize how  today's access to free information  from sources like Morningstar empowers you to conduct research that was unimaginable just decades ago. Plus, I'll give you a sneak peek at a new, exciting, and largely free tool coming soon from  AtlasETF.com, which will allow you to easily test different portfolio strategies.

Join me as we explore these crucial topics and continue to empower you on your journey to becoming a more successful long-term investor.

What are your thoughts on using AI for financial planning? We'd love to hear from you!