Strategic engineering and management depend on cost-effective implementation. Dimensional’s philosophy empowers traders to negotiate from a position of strength, rendering a trading advantage that flows to investors in many ways.
Trading securities—especially small cap stocks and less liquid bonds—can be expensive. Most managers are only too willing to pay these costs to meet a forecast or follow an index. The costs they generate are buried in financial statements and corporate ledgers, but the investor generally pays with lowered returns. Careful trading can reduce or even reverse the costs borne by traditional managers. The savings accrue directly to the investor’s return.
Dimensional focuses on trading. Our refusal to forecast or follow indexes gives us negotiating strength. Where others feel compelled to trade, the firm can take its time. Dimensional’s strategies collectively hold over 16,000 securities per year. It is more important that we capture the systematic performance of broad market dimensions than the random fluctuations of any single security. It is more important that we keep costs low, patiently and expertly.
For more than twenty-five years, Dimensional has developed its trading infrastructure to make this possible. Our state-of-the-art desks around the world ensure a formidable presence in financial markets. Such a large scale brings opportunity for cost-effective and lucrative trades. A vast universe of less liquid securities is transacted in a coordinated way. The result: performance driven by a combination of investment philosophy and trading power. By being patient when others are pushing to transact and by being thrifty when others pay a premium, the firm works daily to improve your results.