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Lessons for the Next Crisis

It will soon be the 10-year anniversary of when, in early October 2007, the S&P 500 Index hit what was its highest point before losing more than half its value over the next year and a half during the global financial crisis.

Over the coming weeks and months, as other anniversaries of major crisis-related events pass (for example, 10 years since the bank run on Northern Rock or 10 years since the collapse of Lehman Brothers), there will likely be a steady stream of retrospectives on what happened as well as opinions on how the environment today may be similar or different from the period leading up to the crisis. It is difficult to draw useful conclusions based on such observations; financial markets have a habit of behaving unpredictably in the short run. There are, however, important lessons that investors might be well-served to remember: Capital markets have rewarded investors over the long term, and having an investment approach you can stick with—especially during tough times—may better prepare you for the next crisis and its aftermath.

The Surprising Dividends of Transformed Investing

client question of the week
This article is written by Dave Goetsch who is the Executive Producer of the CBS comedy "United States of AI." He previously served as Executive Producer of "The Big Bang Theory" and as a writer on "3rd Rock from the Sun." Goetsch is a Dimensional consultant.

I’ve been working in sitcom writing rooms for the past 25 years, and one of the most discussed, and least understood, topics is investing. To be in one of those rooms means that you have already beaten the odds. In success, the financial benefits can be fast and huge (Google “writer” plus “nine-figure deal”), but in failure, the financial misfortune can come even faster and be even more extreme.

So what do you do? How do you plan when there’s no way to know which show you’ll be working on one, three, or five years from now? Or whether you’ll be working at all? Thanks to my exposure to a better way of investing, I have an incredible advantage over almost every one of my colleagues.