This document provides a quarterly investment update for Dimensional Fund Advisors Canada ULC. It includes summaries of market performance in the first quarter of 2014, long-term performance data of various asset classes, regional market capitalization weights and changes over time, charts showing the randomness of quarterly returns across asset classes, the impact of currency fluctuations on returns, and one-year and quarterly returns for various countries in local currency and Canadian dollars.

1. Quarterly Investment Update
Dimensional Fund Advisors Canada ULC (“DFA Canada”) is not affiliated with [insert name of Advisor]. DFA Canada is a separate and distinct company.
First Quarter 2014

2. Market Update: A Quarter in Review
1
Data is in Canadian dollars. Market segment (index representation) as follows: Canadian stocks: Large Cap (S&P/TSX 60), Small Cap (MSCI/Barra Canadian Small), Growth (MSCI/Barra Canadian Growth), Value (MSCI/Barra
Canadian Value); US stocks: Large Cap (S&P 500), Small Cap (Russell 2000), Growth (Russell 3000 Growth), Value (Russell 3000 Value); International stocks: Large Cap (MSCI EAFE [net div]), Small Cap (MSCI EAFE Small Cap
[net div]), Growth (MSCI EAFE Growth [net div]), Value (MSCI EAFE Value [net div]), Emerging Markets (MSCI Emerging [net div]); Real Estate: Global REITs (S&P Global REIT [net div]); Fixed Income: Canadian (Canadian 1-
month T-bills), Short Term Bonds (FTSE TMX Canada Short-Term Bond), Intermediate Bonds (FTSE TMX Canada Universe Bond), Global Bonds-Hedged (Citigroup World Government Bond Index 1-5 Years [hedged to CAD]).
Indexes are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance does not guarantee future returns.
S&P/TSX data provided by S&P/TSX. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995-2014, all
rights reserved. Canadian fixed income data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. Citigroup bond indexes copyright 2014 by Citigroup.
March 31, 2014
CANADIAN STOCKS
US STOCKS REAL ESTATE AND FIXED INCOME
INTERNATIONAL STOCKS
Large Cap Small Cap Growth Value Large Cap Small Cap Growth Value Emerging
+5.52% +8.50% +7.92% +4.29% +4.76% +7.37% +4.17% +5.34% +3.62%
Large Cap Small Cap Growth Value
Global
REITs
1-Month
T-Bills
Short-Term
Bonds
Intermediate
Bonds
Global Bonds
(hedged)
+5.95% +5.23% +5.18% +7.11% +11.38% +0.20% +1.06% +2.77% +0.78%

3. Survey of Long-Term Performance
2
Data is in Canadian dollars. MSCI EAFE Small Cap Index return is price-only prior to January 1999 data inception. MSCI Emerging Markets Index return is gross dividends prior to January
1999 data inception. S&P Global REIT Index return is gross dividends prior to January 2001 data inception. S&P/TSX data provided by S&P/TSX. MSCI data copyright MSCI 2014, all rights
reserved. The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995-2014, all rights reserved. Canadian fixed
income data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. Citigroup bond indexes copyright 2014 by Citigroup. Indexes are not available for direct
investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results.
March 31, 2014
Annualized (%)
Asset Class Index 1 Year 3 Years 5 Years 10 Years 20 Years
Since
Inception
Inception
date
CANADIAN STOCKS
Large Cap S&P/TSX 60 15.73 3.53 12.36 8.30 9.25 8.92 Feb-87
Small Cap MSCI/Barra Canadian Small 15.45 0.08 19.09 6.57 8.12 9.61 Jul-90
Growth MSCI/Barra Canadian Growth 14.10 -0.52 9.41 6.91 6.94 7.36 Jan-82
Value MSCI/Barra Canadian Value 18.28 6.12 17.28 9.24 11.43 11.58 Jan-82
US STOCKS
Large Cap S&P 500 32.58 19.77 18.01 5.57 8.31 11.02 Feb-51
Small Cap Russell 2000 35.89 18.24 21.09 6.67 8.26 11.78 Jan-79
Growth Russell 3000 Growth 34.40 19.64 18.78 6.09 7.47 10.77 Jan-79
Value Russell 3000 Value 32.36 19.75 18.72 5.77 8.85 12.37 Jan-79
INTERNATIONAL STOCKS
Large Cap MSCI EAFE (net div.) 27.90 12.00 13.00 4.70 4.36 9.39 Jan-70
Small Cap MSCI EAFE Small Cap (net div.) 33.92 14.11 18.56 6.68 4.10 6.33 Jan-93
Growth MSCI EAFE Growth (net div.) 25.04 12.00 12.87 4.74 3.26 9.21 Jan-75
Value MSCI EAFE Value (net div.) 30.83 11.94 13.10 4.58 5.35 12.32 Jan-75
Emerging Markets MSCI Emerging Markets (net div.) 7.25 1.47 11.51 8.22 4.78 11.11 Jan-88
REAL ESTATE
Global REITs S&P Global REIT (net div.) 10.03 13.21 20.48 4.44 7.80 8.07 Jul-89
FIXED INCOME
Canadian Bills Canadian 1-Month T-Bills 0.95 0.91 0.71 1.86 3.07 6.55 Jun-73
Canadian Short-Term Bonds FTSE TMX Canada Short-Term Bond 1.92 3.06 3.16 3.88 5.63 8.22 Jan-80
Canadian Bonds FTSE TMX Canada Universe Bond 0.84 4.98 5.04 5.12 6.92 9.32 Jan-80
Global Bonds (hedged)
Citigroup World Government Bond
Index 1-5 Years
1.78 2.77 2.40 3.27 4.78 6.74 Jan-85

4. Weights
Number of
Countries
Number of
Stocks
Total
Value March 31, 2014
Change from
Previous Year
01/90-03/14
Average
Canada 1 327 1.64 Trillion 3.74% -0.59% 3.15%
United States 1 2,435 20.89 Trillion 47.65% 5.66% 44.56%
Developed Markets 21 3,067 16.16 Trillion 36.85% -8.28% 46.00%
Emerging Markets 21 2,624 5.15 Trillion 11.75% -14.53% 6.28%
Total 44 8,453 43.84 Trillion 100.00%
Value of Stock Markets around the World
3
Data is in US dollars and values are beginning of month. The proxies for the Canadian and US equity markets are based on the respective country markets from the
MSCI All Country World IMI Index. The international developed market proxy is the MSCI All Country World IMI ex USA ex Canada Index. The proxy for emerging
markets is the MSCI All Country World IMI Index (Emerging Markets). MSCI data copyright MSCI 2014, all rights reserved.
January 1990–March 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
1990 1993 1996 1999 2002 2005 2008 2011
Emerging Markets
Maximum 15.68%
September 2010
CAN Stock Market
Maximum 5.07%
March 2011
Intl. Developed Markets
Maximum 67.07%
January 1990
US Stock Market
Minimum 29.89%
January 1990
Emerging Markets
Minimum 0.72%
January 1990
US Stock Market
Maximum 54.85%
January 2002
Intl. Developed Markets
Minimum 34.51%
May 2012
CAN Stock Market
Minimum 2.11%
December 1998
Global market capitalization weights are not static; they change across time.

5. Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
14.09 9.45 5.60 3.33 5.12 8.97 11.71 5.16 7.02 7.59 13.67 6.31 9.26 13.67 11.38 ?
12.78 8.15 3.43 2.48 1.49 6.18 10.52 2.25 4.07 6.59 10.18 2.52 6.25 9.01 6.12 ?
12.59 4.03 2.41 1.05 0.23 3.59 8.56 0.58 3.27 4.81 7.59 0.24 4.15 7.29 6.06 ?
10.26 3.49 0.50 1.01 -7.92 2.09 8.43 0.23 2.60 1.72 3.34 -0.14 3.58 5.00 4.76 ?
7.80 3.33 0.23 0.23 -8.54 1.49 4.39 -1.16 1.24 1.21 0.69 -1.02 0.68 2.09 3.62 ?
3.15 0.23 -0.05 -0.56 -11.97 0.65 0.71 -5.22 0.96 0.59 0.68 -2.36 0.26 0.45 2.77 ?
0.93 -0.30 -0.27 -1.68 -12.02 0.43 0.20 -5.67 0.23 0.30 0.44 -4.08 0.11 0.38 0.78 ?
0.09 -0.71 -0.78 -5.15 -15.72 0.21 -0.21 -7.02 -0.21 0.24 0.21 -4.84 -2.23 0.24 0.20 ?
The Randomness of Quarterly Returns
4
Data is in Canadian dollars. Indexes represented as follows: Canadian stocks (S&P/TSX Composite Index), US stocks (Russell 3000 Index), International Developed Markets (MSCI EAFE
Index), Emerging Markets (MSCI Emerging Markets Index), Global REIT (S&P Global REIT Index), Canadian 1-Month T-Bills, Canadian Bonds (FTSE TMX Canada Universe Bond Index),
Global Bonds (Citigroup World Government Bond Index Canada 1-5 Years). Indexes are not available for direct investment. Index performance does not reflect the expenses associated
with the management of an actual portfolio. Past performance is not a guarantee of future results.
S&P/TSX data provided by S&P/TSX. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright ©
Russell Investment Group 1995-2014, all rights reserved. Canadian fixed income data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. Citigroup bond indexes
copyright 2014 by Citigroup.
March 31, 2014
Highest
Return
Lowest
Return
This table shows from top to
bottom the highest returning
asset classes each quarter over
the last 15 quarters. Each asset
class is color coded based on
the legend below.
The lack of a pattern indicates that picking which asset classes will be the best or worst
performers is virtually impossible.
Portfolios combining these various investments will avoid extreme returns.
Canadian Stocks
US Stocks
International Developed Markets
Emerging Markets
Global REITs
Canadian 1-Month T-Bills
Canadian Bonds
Global Bonds

6. Currency
5
Data is in Canadian dollars. The market for the United States, International Developed Markets, and Emerging Markets is defined as: Russell 3000 Index, MSCI EAFE Index, and MSCI
Emerging Markets Index, respectively. The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995-2014, all rights
reserved. MSCI data copyright MSCI 2014, all rights reserved. Indexes are not available for direct investment. Index performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results. FX Rates courtesy of Federal Reserve of New York.
March 31, 2014
CHANGE IN FOREIGN EXCHANGE RATES (%)
FX/$CAD
Currency Q1 2014 One Year Three Years
$ US Dollars -3.85% -7.91% -12.06%
€ Euro -4.07% -14.27% -9.42%
£ Pounds -4.49% -16.01% -15.32%
¥ Yen -5.91% 0.71% 9.41%
IMPACT OF CURRENCY FLUCTUATIONS
Annual Returns in CAD and Local Currency Three-Year Annualized Returns in CAD and Local Currency
33.21
28.10
7.04
22.61
15.82
3.60
US Stocks Int'l Stocks Emerging Markets
UnitedStates
19.55
12.19
1.31
14.62
9.48
1.38
US Stocks Int'l Stocks Emerging Markets
CAD
Local Currency

7. ONE YEAR RETURNS IN CAD AND LOCAL CURRENCY
Return
in CAD
Return
in Local
Currency
Impact of
Currency
1. Greece 84.22% 57.98% 26.24%
2. Italy 71.59% 47.15% 24.44%
.
13. United States 33.13% 22.54% 10.59%
.
.
27. Canada 16.31% 16.31% 0.00%
.
.
43. Chile -21.14% -15.26% -5.88%
44. Turkey -23.06% -16.28% -6.78%
FIRST QUARTER 2014 RETURNS
Return
in CAD
Return
in Local
Currency
Impact of
Currency
1. Indonesia 27.23% 14.33% 12.91%
2. Greece 23.16% 18.53% 4.63%
.
.
.
.
27. Canada 6.10% 6.10% 0.00%
28. United States 5.88% 1.93% 3.96%
.
43. Hungary -5.03% -5.42% 0.38%
44. Turkey -11.26% -8.65% -2.61%
MSCI Country Returns in
Canadian Dollars and Local Currency
6
MSCI data copyright MSCI 2014, all rights reserved. Indexes are not available for direct investment. Index performance does not reflect the expenses associated with the management of an
actual portfolio. Past performance is not a guarantee of future results.
March 31, 2014
UnitedStates
UnitedStates

8. -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0
Colombia
Egypt
Indonesia
Philippines
Peru
Denmark
Brazil
Mexico
Thailand
South Africa
China
India
Malaysia
Czech Republic
Singapore
Sri Lanka
Sweden
Australia
Chile
Argentina
Norway
Pakistan
Hong Kong
Switzerland
Germany
Korea
Poland
New Zealand
Morocco
Turkey
Netherlands
Spain
UK
France
Isreal
Belgium
Taiwan
Russia
Finland
Japan
Hungary
Italy
Portugal
Jordan
Austria
Ireland
Greece
MSCI Country Returns
7
Data in Canadian dollars gross of fees. MSCI data copyright MSCI 2014, all rights reserved. Indexes are not available for direct investment. Index performance does not reflect the
expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results.
Country Rankings—Ten-Year Annualized Returns as of March 31, 2014
Canada
United States UnitedStates
Percent Return

9. Bond Returns
8
March 31, 2014
Return (%)
Index Q1 2014
One
Year
Three Years
Annualized
Canadian 1-Month T-Bills 0.20% 0.95% 0.91%
FTSE TMX Canada Short-Term Bond Index 1.06% 1.92% 3.06%
FTSE TMX Canada Mid-Term Bond Index 3.22% 1.17% 6.04%
FTSE TMX Canada Long-Term Bond Index 5.12% -1.11% 7.51%
FTSE TMX Canada Universe Bond Index 2.77% 0.84% 4.98%
Citigroup World Government Bond Index 0.78% 1.78% 2.77%
(1-5 years hedged)
CAN Treasury Yield Curve
0%
1%
2%
3%
4%
3M 6M 1YR 2YR 3YR 5YR 10YR 30YR
12/31/2012 6/28/2013 12/31/2013
Data is in Canadian dollars. Canadian fixed income data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. Data provided by Citibank. Treasury yield data
provided by Bank Of Canada; copyright © 1995-2014, Bank of Canada.

10. $0.90
$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
Mar-13 Jun-13 Sep-13 Dec-13 Mar-14
Balanced Portfolio T-Bills Canadian Bonds
International Stocks Emerging Markets Stocks US Stocks
Global Real Estate Canadian Stocks
Growth of Wealth
9
In Canadian dollars. T-Bills is Canadian 1-Month T-Bills, Canadian Bonds is FTSE TMX Canada Universe Bond Index, International Stocks is MSCI EAFE Index (net div.), Emerging
Markets Stocks is MSCI Emerging Markets Index (gross div.) from 01/1988 to 12/1998 and MSCI Emerging Markets Index (net div.) from 01/1999, US Stocks is S&P 500 Index, Global Real
Estate is S&P Global REIT Index (gross div.) from 07/1989 to 12/2000 and S&P Global REIT (net div.) from 01/2001 and Canadian Stocks is S&P/TSX Composite Index. Balanced Portfolio
is 10% T-Bills, 30% Canadian Bonds, 20% Canadian Stocks, 15% US Stocks, 15% International Stocks, 5% Emerging Markets Stocks and 5% Global Real Estate. Canadian fixed income
data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor’s
Index Services Group. S&P/TSX data provided by S&P/TSX. Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results.
One Year as of March 31, 2014
$1.07
$1.16
$1.01
$1.13
$1.01
$1.10
$1.32
$1.28

11. $0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14
Balanced Portfolio T-Bills Canadian Bonds
International Stocks Emerging Markets Stocks US Stocks
Global Real Estate Canadian Stocks
$1.45
$1.40
Growth of Wealth
10
In Canadian dollars. T-Bills is Canadian 1-Month T-Bills, Canadian Bonds is FTSE TMX Canada Universe Bond Index, International Stocks is MSCI EAFE Index (net div.), Emerging
Markets Stocks is MSCI Emerging Markets Index (gross div.) from 01/1988 to 12/1998 and MSCI Emerging Markets Index (net div.) from 01/1999, US Stocks is S&P 500 Index, Global Real
Estate is S&P Global REIT Index (gross div.) from 07/1989 to 12/2000 and S&P Global REIT (net div.) from 01/2001 and Canadian Stocks is S&P/TSX Composite Index. Balanced Portfolio
is 10% T-Bills, 30% Canadian Bonds, 20% Canadian Stocks, 15% US Stocks, 15% International Stocks, 5% Emerging Markets Stocks and 5% Global Real Estate. Canadian fixed income
data provided FTSE TMX Global Debt Capital Markets Inc., all rights reserved. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor’s Index
Services Group. S&P/TSX data provided by S&P/TSX. Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the management of
an actual portfolio. Past performance is not a guarantee of future results.
Three Years as of March 31, 2014
$1.04
$1.11
$1.03
$1.26
$1.16
$1.72

12. $0.90
$1.10
$1.30
$1.50
$1.70
$1.90
$2.10
$2.30
$2.50
$2.70
Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14
Balanced Portfolio T-Bills Canadian Bonds
International Stocks Emerging Markets Stocks US Stocks
Global Real Estate Canadian Stocks
$2.29
$1.84
$1.28
$1.90
$1.04
$1.67
$1.72
$2.54
Growth of Wealth
11
In Canadian dollars. T-Bills is Canadian 1-Month T-Bills, Canadian Bonds is FTSE TMX Canada Universe Bond Index, International Stocks is MSCI EAFE Index (net div.), Emerging
Markets Stocks is MSCI Emerging Markets Index (gross div.) from 01/1988 to 12/1998 and MSCI Emerging Markets Index (net div.) from 01/1999, US Stocks is S&P 500 Index, Global Real
Estate is S&P Global REIT Index (gross div.) from 07/1989 to 12/2000 and S&P Global REIT (net div.) from 01/2001 and Canadian Stocks is S&P/TSX Composite Index. Balanced Portfolio
is 10% T-Bills, 30% Canadian Bonds, 20% Canadian Stocks, 15% US Stocks, 15% International Stocks, 5% Emerging Markets Stocks and 5% Global Real Estate. Canadian fixed income
data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor’s
Index Services Group. S&P/TSX data provided by S&P/TSX. Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results.
Five Years as of March 31, 2014

13. Growth of Wealth
12
In Canadian dollars. T-Bills is Canadian 1-Month T-Bills, Canadian Bonds is FTSE TMX Canada Universe Bond Index, International Stocks is MSCI EAFE Index (net div.), Emerging
Markets Stocks is MSCI Emerging Markets Index (gross div.) from 01/1988 to 12/1998 and MSCI Emerging Markets Index (net div.) from 01/1999, US Stocks is S&P 500 Index, Global Real
Estate is S&P Global REIT Index (gross div.) from 07/1989 to 12/2000 and S&P Global REIT (net div.) from 01/2001 and Canadian Stocks is S&P/TSX Composite Index. Balanced Portfolio
is 10% T-Bills, 30% Canadian Bonds, 20% Canadian Stocks, 15% US Stocks, 15% International Stocks, 5% Emerging Markets Stocks and 5% Global Real Estate. Canadian fixed income
data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor’s
Index Services Group. S&P/TSX data provided by S&P/TSX. Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results.
Ten Years as of March 31, 2014
$0.50
$0.70
$0.90
$1.10
$1.30
$1.50
$1.70
$1.90
$2.10
$2.30
$2.50
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Balanced Portfolio T-Bills Canadian Bonds
International Stocks Emerging Markets Stocks US Stocks
Global Real Estate Canadian Stocks
$1.20
$1.78
$1.72
$1.65
$2.18
$2.20
$1.54
$1.58

14. $2.35
$3.81
$2.54
$4.50
$5.16
$1.83
$4.94
$3.92
Growth of Wealth
13
In Canadian dollars. T-Bills is Canadian 1-Month T-Bills, Canadian Bonds is FTSE TMX Canada Universe Bond Index, International Stocks is MSCI EAFE Index (net div.), Emerging
Markets Stocks is MSCI Emerging Markets Index (gross div.) from 01/1988 to 12/1998 and MSCI Emerging Markets Index (net div.) from 01/1999, US Stocks is S&P 500 Index, Global Real
Estate is S&P Global REIT Index (gross div.) from 07/1989 to 12/2000 and S&P Global REIT (net div.) from 01/2001 and Canadian Stocks is S&P/TSX Composite Index. Balanced Portfolio
is 10% T-Bills, 30% Canadian Bonds, 20% Canadian Stocks, 15% US Stocks, 15% International Stocks, 5% Emerging Markets Stocks and 5% Global Real Estate. Canadian fixed income
data provided by FTSE TMX Global Debt Capital Markets Inc., all rights reserved. MSCI data copyright MSCI 2014, all rights reserved. The S&P data are provided by Standard & Poor’s
Index Services Group. S&P/TSX data provided by S&P/TSX. Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results.
Twenty Years as of March 31, 2014
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14
Balanced Portfolio T-Bills Canadian Bonds
International Stocks Emerging Markets Stocks US Stocks
Global Real Estate Canadian Stocks

15. When the media raises the subject of beating the market
through astute stock picking, the name Warren Buffett is
usually cited. But what does this legendary investor actually
say about the smart way to invest?
Buffett is considered to have such a track record of picking stock winners and
avoiding losers that his annual letter to shareholders in his Berkshire Hathaway
conglomerate is treated as a major event by the financial media.1
What does he think about the Federal Reserve taper? What could be the
implications for emerging markets of a Russian military advance into Ukraine?
What does an economic slowdown in China mean for developed markets?
Buffett has a neat way of parrying these questions from journalists and
analysts. Instead of offering instant opinions about the crisis of the day, he
recounts in his most recent annual letter a folksy story about a farm he has
owned for nearly 30 years.2
Has he laid awake at night worrying about fluctuations in the farm’s market
price? No, says Buffett, he has focused on its long-term value. And he
counsels investors to take the same sanguine, relaxed approach to liquid
investments such as stocks as they do to the value of their family home.
“Those people who can sit quietly for decades when they own a farm or
apartment house too often become frenetic when they are exposed to a
stream of stock quotations,” Buffett wrote. “For these investors, liquidity is
transformed from the unqualified benefit it should be to a curse.”
While many individuals seek to ape Buffett in analyzing individual companies
in minute detail in the hope of finding a bargain, he advocates that the right
approach for most people is to let the market do all the work and worrying
for them.
“The goal of the non-professional should not be to pick winners,” Buffett wrote.
“The ‘know-nothing’ investor who both diversifies and keeps his costs minimal
is virtually certain to get satisfactory results.”
As to all the predictions out there about interest rates, emerging markets,
or geopolitics, there will always be a range of opinions, he says. But we are
under no obligation to listen to the media commentators, however distracting
they may be.
“Owners of stocks . . . too often let the capricious and irrational behavior of
their fellow owners cause them to behave irrationally,” Buffett wrote. “Because
there is so much chatter about markets, the economy, interest rates, price
behavior of stocks, etc., some investors believe it is important to listen to
pundits—and, worse yet, important to consider acting upon their comments.”
The Buffett prescription isn’t rocket science, as one might expect from an
unassuming, plainspoken octogenarian from Nebraska. He rightly points out
that an advanced intellect and success in long-term investment don’t necessarily
go together.
“You don't need to be a rocket scientist,” he has said. “Investing is not a
game where the guy with the 160 IQ beats the guy with 130 IQ.”3
Not Rocket Science
14
1. “Buffet Warns of Liquidity Curse,” Bloomberg, Feb 25, 2014.
2. Berkshire Hathaway Inc. shareholder letter, 2013, www.berkshirehathaway.com/letters/2013ltr.pdf.
3. “The wit and wisdom of Warren Buffett,” Fortune, November 19, 2012, management.fortune.cnn.com/2012/11/19/warren-buffett-wit-wisdom/.
Adapted from “Not Rocket Science” by Jim Parker, Outside the Flags column on Dimensional’s website, March 2014. Diversification neither assures a profit nor guarantees against loss in a declining market. Investing involves
risks including potential loss of principal and fluctuating value. All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation,
recommendation, or endorsement of any particular security, products or services. Dimensional Fund Advisors LP ("Dimensional") is an investment advisor registered with the Securities and Exchange Commission. All
expressions of opinion are subject to change without notice in reaction to shifting market conditions. This content is provided for informational purposes, and it is not to be construed as an offer, solicitation, recommendation or
endorsement of any particular security, products, or services.
March 31, 2014