We talk frequently about the importance of a well-designed estate plan, but equally valuable is your communication with the next generation. In a recent publication from Vanguard, they pointed out three commonly missed factors associated with a successful transfer of wealth:

• Strong communication and a sense of trust among family members
• Thorough preparation of heirs
• A cohesive purpose for family wealth

A family mission statement provides the perfect template for achieving success in these areas. As a start, we encourage you to think about what enduring values around money persist in your family’s history? We have tools and resources to share in the months ahead, but consider this question until next time.

1. That no one can accurately predict the market:

• in advance,
• consistently,
• or for decades at a time.

2. That trying to pick individual stocks or active managers is a loser’s game. Winners buy the world in bulk at a fair price and let capitalism work its magic.

3. That delegating the activity and attention of my personal investing to someone that knows me:

• is liberating,
• has higher expected returns, and
• frees me to pursue my unique abilities.

4. Investing based on the data and evidence shown in decades of market returns and peer-reviewed academic research beats:

• picking stocks,
• gurus,
• black boxes, and
• Las Vegas.

5. Focusing on the things that matter and that I can control are most important, e.g.:

• asset allocation,
• spending, and
• investment expenses.

6. That managing my investing behavior is MORE important than tracking short-term investment performance.

7. That there will always be an apocalypse du jour, so “taking the long view” reminds me that the multi-decade trend of the global stock market is UP.

As our clients know, short-term performance doesn’t matter. That’s right, it doesn’t.

However, we’re particularly fond of the quality of DFA’s visual presentation of information and infographics in recent years, and this quarterly market review is a great example. Click here for a visual summary of second quarter performance.