I compare this behavior with DFA investors and we find that the opposite is true. DFA investors are disciplined, diversified and behave as professional investors would. I can remember when I went to DFA training in Chicago and they used the hockey analogy to explain investment discipline. If you show up for the game fifteen minutes late (miss the first goal) and during a bathroom break (miss the second goal) and actually find yourself in your seat for the final goal; you are going to have a much different experience (outcome) than the person in front of you that happened to enjoy all three goals. We never want to be caught out of the market when a goal is scored and we never know when the next goal will be. If we pick disciplined low cost funds and diversify the risk, we should end up with a successful investment experience. Just think how many times you have witnessed fans leaving the stadium just in time to miss the greatest comeback in franchise history. These fans get stuck listening to the end of the game while stuck in their parking space.
This is the reason we use DFA funds within “The Cambridge Plan”. I can remember during 2007 and 2008 when the financial worlds were crumbling; inflows into DFA funds were positive. It’s like your parents always said “It’s who you hang out with that matters”. Remember; hang out with institutional investors and keep your butt in your seat.