On June 28th, Weston Wellington provided insights into how previous concepts of Investment advice are being replaced by a comprehensive strategy that better balances risk/reward elements, and how pricing stability of competitive markets outpaces the tail-chasing methodologies of market timing and the selection biases of equilibrium investing.
This differentiated concept of investing is based upon the “Chicago School” of economic theory. Developed by DFA Board of Directors member and Nobel laureate Eugene Fama, this first modern finance theory is based upon the efficient market hypothesis. This theory was heralded as revolutionary in the 1960’s when it was first introduced, but with the passage of time and proven results that it has demonstrated it is now acknowledged as the operative view of economic theory in finance, academic and investment circles. In addition to his Nobel prize, Eugene Fama has won the Deutsch Bank Prize in Financial Economics, the Morgan Stanley American Finance Association Award for Excellence in Finance, and the Onassis Prize in Finance, the Chaire Francqui Science Price, and the Nicholas Molodovsky Award from the CFA Institute.
Despite all the professional acclaim, the clarity of the efficient market strategy has evaded many investors, and it is the work of Weston and others to spread the gospel of efficient market theory to investors. His presentation outlined differentiated benefits of this strategy, as he utilized his clear speaking approach and a series of illustrations to outline these differences. We were fortunate to have Weston present to Heritage clients and guests and thank both him and our friends at DFA for supporting this tremendous educational event.