big enough to deliver, small enough to care · 2016-12-06 · 8 id staying disciplined matters...

»The Lindner Capital StoryBig Enough To Deliver, Small Enough To Care

Lindner Capital Advisors. A Registered Investment Advisor. 600 Village Trace, Building 23, Marietta, GA 30067

Who We Are

2

ID

○ Quick Response Times

Big Enough to DELIVER

○ CEFEX Certified

○ Morningstar Investment Analysis

Platform

○ Riskalyze Risk Assessment

Platform

○ Orion Performance Reporting

○ Streamlined Account Opening

Process

○ Lead and Referral Program

○ 401(k) Proposal Generation

Small Enough to CARE

○ Quick Response Times

○ No Phone Trees

○ Strong Service Team

○ Personal Operations Assistant

○ Direct Access to Portfolio

Management

○ Access to Senior Management

○ Experienced Wholesaling

Team

○

The New Investment Experience

3

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New WayOld Way

Lindner

Capital

At Lindner Capital, we construct portfolios based on sound academic and

evidenced based principles.

4

ID

Creating a Successful Investment Experience

Where Most People Focus What Really Matters

Focus on What You Can Control

5Diversification neither ensures a profit nor guarantees against loss in a declining market.

No one can reliably and consistently forecast the market’s direction or predict which stock or investment manager will do best at any given time.

We can help you create a plan and focus on the actions that really matter.

Creating an

investment plan to fit

your needs and risk tolerance

Structuring a portfolio around

dimensions of returns

Diversifying broadly

Reducing expenses, turnover

and taxes

Staying Disciplined

What Really Matters

ID

6

ID

Have You Been a Victim to Your Emotions?

.

Resist the Urge Acting on your

emotions may

negatively impact

your Investment

experience.

Investment Fund Flows

7

ID

Source: “Quantitative Analysis of Investor Behavior, 2015 Edition” DALBAR, Inc.

Standard & Poor’s Index Services Group

8

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Staying Disciplined Matters

Source: Quantitative Analysis of Investor Behavior, 2015 Edition” DALBAR, Inc. Standard & Poor’s Index

Services Group. The 60/40 and 80/20 portfolios are referenced in the DFA Matrix Book 2015, as the Balance

Strategy: Normal 60/40 and the Balanced Strategy: Aggressive 80/20.

8.19%

4.67%

2.20%

7.80%

8.90%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

S&P 500 Average EquityInvestor

Inflation 60/40 Portfolio 80/20 Portfolio

Annualized Returns (%), January 1996 – December 2015 (Gross of Fees)

The “average equity investor”,

who is negatively effected by a

cycle of emotions, has difficulty

staying disciplined and sticking

to their plan.

The real goal is to invest in a

diversified portfolio that is

appropriate for your risk

tolerance and objectives.

Then, commit to your plan.

Ignore the Financial Press

9

Daily news and

commentary can make you

emotional and challenge

your investment discipline.

Mixed messages stir anxiety

about the future while others

tempt you to chase the latest

investment fad.

When tested, consider the

source and maintain a

long-term perspective.

For illustrative purposes only.

Source: Dimensional Fund Advisor Master Presentation dated September 2016, slide 9

ID

Markets Have Rewarded Discipline

10

Growth of a dollar—MSCI World Index (net dividends), 1970–2015

In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. The information shown

here is derived from the index. MSCI data © MSCI 2016, all rights reserved.


$0

$1

$10

$100

$43

US home

prices hit

bottom

Fiscal

cliff

worries

Euro zone

debt crisis

S&P 500

down 46%

Subprime

mortgage

crisis

Hurricanes

Katrina

and RitaIraq

war

begins

Dotcom

stock

crash

9/11

terrorist

attack

Y2K

Scare

Russian

financial

crisis

Asian

currency

crisis

Income

tax

rates

rate

Iraq

invades

Kuwait

Savings

and loan

crisis

Dow drops

23% on Black

Monday

US

inflation

at 13.5%

BusinessWeek:

“The Death of

Equities”

Gold hits

record high

S&P 500

down 43%

Oil prices

quadruple

Arab oil

embargo

1970 1980 1990 2000 2010 2013

1

A disciplined investor looks beyond the concerns of today to the

long-term growth potential of markets.$0

$1

$10

$100

$45

US home

prices hit

bottom

Fiscal

cliff

worries

Eurozone

debt crisis

S&P

500

down

46%

Subprime

mortgage

crisis

Hurricanes

Katrina

and Rita

Iraq

war

begins

Dotcom

stock

crash

9/11

terrorist

attacks

Y2K

Scare

Russian

financial

crisis

Asian

currency

crisis

Income

tax

rates

rise

Iraq

invades

Kuwait

Savings

and

loan crisis

Dow drops

23% on

Black Monday

US inflation

at 13.5%

BusinessWeek:

“The Death

of Equities”

Gold hits

record high

S&P 500

down 43%

Oil prices

quadruple

Arab oil

embargo

1970 1980 1990 2000 2010 2015

ID

There are Different Approaches to Investing

11

ID

Conventional Index

Lindner

12

ID

Attempts to identify mispricing in securities

Relies on forecasting to select “undervalued”

securities or time markets

Generates higher expenses, trading costs,

and risks

CONVENTIONAL MANAGEMENT


Conventional Investment Methods Have

Low Odds of Success

13

Fraction of mutual funds that survived and beat their index for 15 years,

ending December 31, 2015

Past performance is no guarantee of future results. Survivors are funds that were still in existence as of December 31, 2015. Outperformers are survivors that beat their respective benchmarks over the period.

See “Data Appendix” page in the Appendix for additional information.

Source: Mutual Fund Landscape, Dimensional Fund Advisors 2016. US-domiciled mutual fund data is from the CRSP Survivor-Bias-Free US Mutual Fund Database, provided by the Center for Research in Security Prices,

University of Chicago. The information shown here is derived from such database.

17%

7%

Stocks

Bonds

ID

Source: The US Mutual Fund Landscape Report

Conventional Investment Methods Have

Low Odds of Success

14

Fraction of all mutual funds and DFA funds that survived and beat their index for 15 years,

ending December 31, 2015

Past performance is no guarantee of future results. Survivors are funds that were still in existence as of December 31, 2015. Outperformers are survivors that beat their respective benchmarks over the period.

See “Data Appendix” page in the Appendix for additional information.

Source: Mutual Fund Landscape, Dimensional Fund Advisors 2016. US-domiciled mutual fund data is from the CRSP Survivor-Bias-Free US Mutual Fund Database, provided by the Center for Research in Security Prices,

University of Chicago. The information shown here is derived from such database.

17%

7%

All Stock

Funds

All Bond

Funds

17%DFA Stock

Funds88%

100%DFA Bond

Funds

Source: Morningstar and The US Mutual Fund Landscape Report

Rethinking Conventional Management

15

“I don’t try to be clever at all. The idea that I could

see what no one else can is an illusion.”

Daniel Kahneman, The Little Book of Common Sense Investing (Hoboken:

John Wiley and Sons, 2007)

“All the time and effort that people devote to

picking the right fund, the hot hand, the great

manager, have in most cases led to no

advantage.”

Peter Lynch, Beating the Street (New York: Simon & Schuster, 1993)

Source: Dimensional Fund Advisor Master Presentation dated September 2016 – slides 33 and 124

ID

There Are Differing Approaches

16

Allows commercial index to determine strategy

Attempts to match index performance, restricting

which securities to hold and when to trade

Prioritizes low tracking error over higher

expected returns

INDEXING


ID

The Effect of Index Reconstitution on Stock Prices

17

• Stocks rise on announcement

of inclusion.

• Index funds are forced to buy

on effective date.

• Buying and selling to track

index changes reduces

tracking error but generates

transaction costs.

S&P 500 data source: Anthony Lynch and Richard Mendenhall, “New Evidence on Stock Price Effects Associated with Changes in the S&P 500 Index,” Journal of Business 70, no. 3 (July 1997): 351-83. MSCI EAFE Index data

source: Rajesh Chakrabarti, Wei Huang, Narayanan Jayaraman, and Jinsoo Lee, “Price and Volume Effects of Changes in MSCI Indices: Nature and Causes,” Journal of Banking and Finance 29, no. 5 (May 2005): 1237-64. For

illustrative purposes only. Past performance is not a guarantee of future results.

Source: DFA Supplemental Slide Deck dated March 2016, slide #9

S&P 500 Index MSCI EAFE Index

One-Day Return after Announcement (%) 3.2 3.4

Run-Up to Effective Date (%) 3.8 4.5

Decay after Effective Date (%) -2.1 -2.6

Announcement Effective

Price

Time

ID

A Different Way to Invest

18

ID

LCA's Approach

PhilosophyGains insights about markets and

returns from academic research

Portfolio

ConstructionStructures portfolios along the

dimensions of expected returns

ProcessAdds value by integrating research,

portfolio management, and trading

Our Core Beliefs Building blocks to investment success

19

Advisor Use Only

Core Principle One

• Markets Are Efficient

Core Principle Two

• Diversification Is Key

Core Principle Three

• Structure Explains Performance

Core Principle Four

• Discipline and Long Term Investing

ID

20

ID

All Available

Information

Markets are Efficient

What Affects a Stock’s Current Price?

Core Principle One

A company’s equity, its prospects for future

earnings, and perceived risk

Price

Given all information, a stock’s current price offers the best approximation of actual value.

Source: Dimensional Fund Advisor Master Presentation dated September 2016 – slide 170

Embrace Market Pricing

21

The market is an effective,

information-processing machine.

Millions of participants buy

and sell securities in the world

markets every day, and the

real-time information they bring

helps set prices.


In US dollars. Global electronic order book (largest 60 exchanges). Source: World Federation of Exchanges.

World Equity Trading in 2015

Number of Trades Dollar Volume

Daily

Average

98.6

million

$447.3

billion

22

Staying disciplined through rising and falling markets can pose a challenge, but it is crucial

for long-term success.

ID

Diversification

Take the Guesswork out of Investing

Core Principle Two

Benchmarks and LCA Portfolio

S&P 500 TR USD

S&P 500 Growth TR USD

S&P 500 Value TR USD

Russell 2000 TR USD

Russell 2000 Growth TR USD

Russell 2000 Value TR USD

MSCI ACWI Ex USA TR Net USD

MSCI EAFE TR Net USD

Barclays US Agg Bond TR USD

Barclays 1-3 Yr US Treasury TR USD

LCA Traditional Retirement 65/35 *

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Higher

Return22.8 14.0 10.3 48.5 22.3 16.6 26.7 16.7 6.7 41.5 29.1 7.8 18.1 43.3 14.9 5.5

11.6 8.4 5.9 47.3 20.9 13.5 26.3 11.2 5.2 34.5 26.9 4.7 17.7 38.8 13.7 1.4

8.1 8.4 -9.4 46.0 20.3 5.8 23.5 9.1 -26.2 31.8 24.5 2.1 17.3 34.5 12.4 0.6

6.1 2.5 -11.4 40.8 18.3 5.5 20.8 7.3 -28.9 31.6 15.1 1.6 16.8 32.8 6.0 0.6

-2.4 0.0 -15.0 38.6 15.7 4.9 18.4 7.1 -33.8 27.2 15.1 -0.5 16.4 32.4 5.6 -0.8

-3.0 -9.2 -15.9 31.8 14.3 4.7 15.8 7.0 -34.9 26.5 15.1 -2.9 16.0 32.0 4.9 -1.4

-9.1 -11.7 -20.5 28.7 11.7 4.6 13.9 5.5 -37.0 21.9 13.1 -4.2 14.6 22.8 4.2 -2.7

-14.2 -11.9 -20.9 25.7 10.9 4.2 13.4 2.0 -38.5 21.2 11.2 -4.9 14.6 18.3 2.4 -3.1

-15.3 -12.7 -22.1 24.9 6.1 4.0 11.0 1.3 -39.2 20.6 7.8 -5.5 13.5 15.3 0.6 -4.4

-22.1 -19.7 -23.6 4.1 4.3 2.4 4.3 -1.6 -43.4 5.9 6.5 -12.1 4.2 0.4 -3.9 -5.7

Lower

Return-22.4 -21.4 -30.3 1.9 0.9 1.6 3.9 -9.8 -45.5 0.8 2.4 -13.7 0.4 -2.0 -4.9 -7.5

Difference between Top and Bottom

45.3 35.5 40.5 46.6 21.3 15.0 22.7 26.4 52.2 40.6 26.7 21.6 17.6 45.3 19.8 13.0

Annual Returns

You never know

which markets will

outperform from

year to year.

Some investors

may be tempted to

switch asset

classes. Don’t let

Fear and Greed get

the best of you.

Source: Morningstar

* LCA Traditional Retirement 65/35 returns are net of all fees.

EQ

UIT

IES

Core Principle ThreeStructure Explains Performance

Dimensions Point to Differences in Expected Returns

23


Diversification does not eliminate the risk of market loss. 1. Relative price as measured by the price-to-book ratio; value stocks are those with lower price-to-book ratios.

2.Profitability is a measure of current profitability, based on information from individual companies’ income statements.

Company Size Small cap premium—small vs large companies

Market Equity premium—stocks vs bonds

Relative Price1

Value premium—value vs growth companies

Profitability2

Profitability premium—high vs low profitability companies

Term Term premium—longer vs shorter maturity bonds

CreditCredit premium—lower vs higher credit quality bonds

DIMENSIONS POINT TO SYSTEMATIC DIFFERENCES IN EXPECTED

RETURNS

FIX

ED

IN

CO

ME

Historical Performance of Premiums over Rolling Periods

24

US Markets


Information provided by Dimensional Fund Advisors LP.

Indices are not available for direct investment. Past performance is not a guarantee of future results.

1. Profitability is a measure of current profitability, based on information from individual companies’ income statements.

In US dollars. Based on rolling annualized returns using monthly data. Rolling multiyear periods overlap and are not independent. This statistical dependence must be considered when assessing the reliability of long-horizon return differences.

Dimensional Index data compiled by Dimensional. Fama/French data provided by Fama/French. The S&P data is provided by Standard & Poor's Index Services Group. The information shown here is derived from such indices. Index

descriptions available upon request. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Small beat large 96% of the

time.MARKET beat T-BILLS

Overlapping Periods: January 1928–December 2015

VALUE beat GROWTH


SMALL beat LARGE


HIGH PROFITABILITY1 beat LOW PROFITABILITY

Overlapping Periods: July 1963–December 2015

Market is Fama/French Total US Market Index.

T-Bills is One-Month US Treasury Bills.

There are 877 overlapping 15-year periods, 937 overlapping 10-year periods,

997 overlapping 5-year periods, and 1,045 overlapping 1-year periods.

Value is Fama/French US Value Index.

Growth is Fama/French US Growth Index.



Small is Dimensional US Small Cap Index.

Large is S&P 500 Index.



High is Dimensional US High Profitability Index.

Low is Dimensional US Low Profitability Index.


571 overlapping 5-year periods, and 619 overlapping 1-year periods.

69% of the time

78% of the time

85% of the time

96% of the time

1-Year

5-Year

10-Year

15-Year

61% of the time

77% of the time

88% of the time

97% of the time

1-Year

5-Year

10-Year

15-Year

57% of the time

64% of the time

72% of the time

82% of the time

1-Year

5-Year

10-Year

15-Year

71% of the time

92% of the time

100% of the time

100% of the time

1-Year

5-Year

10-Year

15-Year


25

Developed ex US Markets






Dimensional Index data compiled by Dimensional. Fama/French data provided by Fama/French. MSCI data copyright MSCI 2016, all rights reserved. The information shown here is derived from such indices. Index descriptions available upon

request. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.




VALUE beat GROWTH


SMALL beat LARGE




Market is MSCI World ex USA Index (gross div.).




Value is Fama/French International Value Index.

Growth is Fama/French International Growth Index.



Small is Dimensional International Small Cap Index.

Large is MSCI World ex USA Index (gross div.).



High is Dimensional International High Profitability Index.

Low is Dimensional International Low Profitability Index.



64% of the time

67% of the time

88% of the time

91% of the time

1-Year

5-Year

10-Year

15-Year

70% of the time

94% of the time

100% of the time

100% of the time

1-Year

5-Year

10-Year

15-Year

64% of the time

82% of the time

85% of the time

95% of the time

1-Year

5-Year

10-Year

15-Year

79% of the time

100% of the time

100% of the time

100% of the time

1-Year

5-Year

10-Year

15-Year


26

Emerging Markets






Dimensional Index data compiled by Dimensional. Fama/French data provided by Fama/French. MSCI data copyright MSCI 2016, all rights reserved. The information shown here is derived from such indices. Index descriptions available upon

request. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.




VALUE beat GROWTH


SMALL beat LARGE




Market is MSCI Emerging Markets Index (gross div.).




Value is Fama/French Emerging Markets Value Index.

Growth is Fama/French Emerging Markets Growth Index.



Small is Dimensional Emerging Markets Small Cap Index.

Large is MSCI Emerging Markets Index (gross div.).



High is Dimensional Emerging Markets High Profitability Index.

Low is Dimensional Emerging Markets Low Profitability Index.



65% of the time

72% of the time

80% of the time

97% of the time

1-Year

5-Year

10-Year

15-Year

50% of the time

92% of the time

93% of the time

100% of the time

1-Year

5-Year

10-Year

15-Year

67% of the time

71% of the time

85% of the time

90% of the time

1-Year

5-Year

10-Year

15-Year

77% of the time

100% of the time

100% of the time

100% of the time

1-Year

5-Year

10-Year

15-Year

Historical Observations of Five-Year Premiums

27

Equity, size, relative price, and profitability: US Markets


In US dollars. Five-year rolling equity premium is computed as the five-year annualized compound return on the Fama/French Total US Market Index minus the five-year annualized compound return of the one-month US Treasury Bill. Five-

year rolling size premium is computed as the five-year annualized compound return on the Dimensional US Small Cap Index minus the five-year annualized compound return on the S&P 500 Index. Five-year rolling relative price premium is

computed as the five-year annualized compound return on the Fama/French US Value Index minus the five-year annualized compound return on the Fama/French US Growth Index. The five-year rolling profitability premium is computed as

the five-year annualized compound return on the Dimensional US High Profitability Index minus the five-year annualized compound return on the Dimensional US Low Profitability Index. Fama/French indices provided by Ken French. The S&P

data is provided by Standard & Poor's Index Services Group. Dimensional indices use CRSP and Compustat data. Index descriptions available upon request. Eugene Fama and Ken French are members of the Board of Directors for and

provide consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past

performance is no guarantee of future results.

MA

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1932 1940 1950 1960 1970 1980 1990 2000 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

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1932 1940 1950 1960 1970 1980 1990 2000 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

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1932 1940 1950 1960 1970 1980 1990 2000 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

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1932 1940 1950 1960 1970 1980 1990 2000 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

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28

Equity, size, relative price, and profitability: Developed ex US Markets


In US dollars. Five-year rolling equity premium is computed as the five-year annualized compound return on the MSCI World ex USA Index (gross dividends) minus the five-year annualized compound return of the one-month US Treasury

Bill. Five-year rolling size premium is computed as the five-year annualized compound return on the Dimensional International Small Cap Index minus the five-year annualized compound return on the MSCI World ex USA Index (gross

dividends). Five-year rolling relative price premium is computed as the five-year annualized compound return on the Fama/French International Value Index minus the five-year annualized compound return on the Fama/French International

Growth Index. The five-year rolling profitability premium is computed as the five-year annualized compound return on the Dimensional International High Profitability Index minus the five-year annualized compound return on the Dimensional

International Low Profitability Index. Dimensional indices use Bloomberg data. Fama/French indices provided by Ken French. MSCI data copyright MSCI 2016, all rights reserved. Index descriptions available upon request. Eugene Fama and

Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the expenses associated with

the management of an actual portfolio. Past performance is no guarantee of future results.

MA

RK

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1979 1985 1990 1995 2000 2005 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

miu

ms

1979 1985 1990 1995 2000 2005 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

miu

ms

1979 1985 1990 1995 2000 2005 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

miu

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1979 1985 1990 1995 2000 2005 2010 2015

-20%

-10%

0%

10%

20%

30%

Pre

miu

ms



29

Equity, size, relative price, and profitability: Emerging Markets


In US dollars. Five-year rolling equity premium is computed as the five-year annualized compound return on the Fama/French Emerging Markets Index minus the five-year annualized compound return of one-month US Treasury Bills. Five-

year rolling size premium is computed as the five-year annualized compound return on the Dimensional Emerging Markets Small Cap Index minus the five-year annualized compound return on the MSCI Emerging Markets Index (gross

dividends). Five-year rolling relative price premium is computed as the five-year annualized compound return on the Fama/French Emerging Markets Value Index minus the five-year annualized compound return on the Fama/French Emerging

Markets Growth Index. The five-year rolling profitability premium is computed as the five-year annualized compound return on the Dimensional Emerging Markets High Profitability Index minus the five-year annualized compound return on the

Dimensional Emerging Markets Low Profitability Index. Dimensional indices use Bloomberg data. Fama/French indices provided by Ken French. MSCI data copyright MSCI 2016, all rights reserved. Index descriptions available upon request.

Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the

expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results.

MA

RK

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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-20%

0%

20%

40%

Pre

miu

ms

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-20%

0%

20%

40%

Pre

miu

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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-20%

0%

20%

40%

Pre

miu

ms

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-20%

0%

20%

40%

Pre

miu

ms


Historical Observations of 10-Year Premiums

30

Equity, size, relative price, and profitability: US Markets


In US dollars. 10-year rolling equity premium is computed as the 10-year annualized compound return on the Fama/French Total US Market Index minus the 10-year annualized compound return of the one-month US Treasury Bill. 10-year

rolling size premium is computed as the 10-year annualized compound return on the Dimensional US Small Cap Index minus the 10-year annualized compound return on the S&P 500 Index. 10-year rolling relative price premium is computed

as the 10-year annualized compound return on the Fama/French US Value Index minus the 10-year annualized compound return on the Fama/French US Growth Index. The 10-year rolling profitability premium is computed as the 10-year

annualized compound return on the Dimensional US High Profitability Index minus the 10-year annualized compound return on the Dimensional US Low Profitability Index. Fama/French indices provided by Ken French. The S&P data is

provided by Standard & Poor's Index Services Group. Dimensional indices use CRSP and Compustat data. Index descriptions available upon request. Eugene Fama and Ken French are members of the Board of Directors for and provide

consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is

no guarantee of future results.

MA

RK

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1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2015

-6%

0%

6%

12%

18%

Pre

miu

ms

1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2015

-6%

0%

6%

12%

18%

Pre

miu

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1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2015

-6%

0%

6%

12%

18%

Pre

miu

ms

1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2015

-6%

0%

6%

12%

18%

Pre

miu

ms



31

Equity, size, relative price, and profitability: Developed ex US Markets


In US dollars. 10-year rolling equity premium is computed as the 10-year annualized compound return on the MSCI World ex USA Index (gross dividends) minus the 10-year annualized compound return of the one-month US Treasury Bill.

10-year rolling size premium is computed as the 10-year annualized compound return on the Dimensional International Small Cap Index minus the 10-year annualized compound return on the MSCI World ex USA Index (gross dividends). 10-

year rolling relative price premium is computed as the 10-year annualized compound return on the Fama/French International Value Index minus the 10-year annualized compound return on the Fama/French International Growth Index. The

10-year rolling profitability premium is computed as the 10-year annualized compound return on the Dimensional International High Profitability Index minus the 10-year annualized compound return on the Dimensional International Low

Profitability Index. Dimensional indices use Bloomberg data. Fama/French indices provided by Ken French. MSCI data copyright MSCI 2016, all rights reserved. Index descriptions available upon request. Eugene Fama and Ken French are

members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the

management of an actual portfolio. Past performance is no guarantee of future results.

MA

RK

ET

min

us

BIL

LS

SM

AL

L C

AP

min

us L

AR

GE

CA

P

VA

LU

E

min

us G

RO

WT

H

HIG

H P

RO

F

min

us

LO

W P

RO

F

1984 1990 1995 2000 2005 2010 2015

-5%

0%

5%

10%

15%

Pre

miu

ms

1984 1990 1995 2000 2005 2010 2015

-5%

0%

5%

10%

15%

Pre

miu

ms

1984 1990 1995 2000 2005 2010 2015

-5%

0%

5%

10%

15%

Pre

miu

ms

1984 1990 1995 2000 2005 2010 2015

-5%

0%

5%

10%

15%

Pre

miu

ms



32

Equity, size, relative price, and profitability: Emerging Markets


In US dollars. 10-year rolling equity premium is computed as the 10-year annualized compound return on the Fama/French Emerging Markets Index minus the 10-year annualized compound return of one-month US Treasury Bills. 10-year

rolling size premium is computed as the 10-year annualized compound return on the Dimensional Emerging Markets Small Cap Index minus the 10-year annualized compound return on the MSCI Emerging Markets Index (gross dividends).

10-year rolling relative price premium is computed as the 10-year annualized compound return on the Fama/French Emerging Markets Value Index minus the 10-year annualized compound return on the Fama/French Emerging Markets

Growth Index. The 10-year rolling profitability premium is computed as the 10-year annualized compound return on the Dimensional Emerging Markets High Profitability Index minus the 10-year annualized compound return on the

Dimensional Emerging Markets Low Profitability Index. Dimensional indices use Bloomberg data. Fama/French indices provided by Ken French. MSCI data copyright MSCI 2016, all rights reserved. Index descriptions available upon request.

Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the

expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results.

MA

RK

ET

min

us

BIL

LS

SM

AL

L C

AP

min

us L

AR

GE

CA

P

VA

LU

E

min

us G

RO

WT

H

HIG

H P

RO

F

min

us

LO

W P

RO

F

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-5%

0%

5%

10%

15%

20%

Pre

miu

ms

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-5%

0%

5%

10%

15%

20%

Pre

miu

ms

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-5%

0%

5%

10%

15%

20%

Pre

miu

ms

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-5%

0%

5%

10%

15%

20%

Pre

miu

ms


4. Let Markets Work for You-USE INSTEAD??

33

The financial markets have rewarded long-term investors. People expect a positive return on the

capital they supply, and historically, the equity and bond markets have provided growth of wealth

that has more than offset inflation.

In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. US Small Cap Index is the CRSP 6-10 Index; US Large Cap Index

is the S&P 500 Index; Long-Term Government Bonds Index is 20-Year US Government Bonds; Treasury Bills are One-Month US Treasury bills; US Inflation is the Consumer Price Index. CRSP data is provided by the Center for

Research in Security Prices, University of Chicago. The S&P data is provided by Standard & Poor's Index Services Group. Bonds, T-bills, and inflation data provided by Morningstar. Past performance is no guarantee of future result

Growth of a Dollar, 1926–2015(Compounded monthly)

$0

$1

$10

$100

$1,000

$10,000

$100,000

1926 1936 1946 1956 1966 1976 1986 1996 2006 2015

$16,743

US Small Cap Index

$5,386

US Large Cap Index

$132 Long-Term

Govt. Bonds Index

$21 Treasury Bills

$13 US Inflation (CPI)

Core Principle Four

Discipline and Long Term Investing


ID

Many of the Greatest Advancements in

Finance Have Come from Academia

34

1966Efficient Markets HypothesisEUGENE FAMA

Nobel Prize in

Economics, 2013

1964Single-Factor Asset Pricing Risk/Return ModelWILLIAM SHARPE

Nobel Prize

in Economics, 1990

1952Diversification and Portfolio RiskHARRY MARKOWITZ

Nobel Prize in

Economics, 1990

1981The Size EffectROLF BANZ

1992–1993Value Effectand Multifactor Asset Pricing ModelEUGENE FAMA

KENNETH FRENCH

2012ProfitabilityROBERT NOVY-MARX

EUGENE FAMA

KENNETH FRENCH

1984Term Structureof Interest RatesEUGENE FAMA


35

ID

LCA Portfolio ManagementUsing Academics and Research to Build Portfolios

Traditional LCA

Value and Small Cap Tilt

Taxable and Retirement Options

Long Term Track Record (1996) with Actual Performance

Fixed Income - Short Duration and High Credit Quality

• Global diversification with over 12,000 securities, 40 countries and 15 asset classes.

• LCA’s Core Principles are based on the work of Nobel Prize winning academics.

37

ID

LCA Portfolio OptionsBased on your risk tolerance, investment objective & time

horizon.

38

ID

Your Risk Score = Your Portfolio

LCA Uses Riskalyze to Determine Your Appropriate Risk Score

Your Investment Advisory Team

39

ID

CLIENT

Financial Advisor

Lindner Capital Advisors, Inc.SEC Registered Investment Advisor (RIA)

Designs & Manages Portfolio

Custodian Fidelity, Schwab, TD Ameritrade, etc.

Holds Assets

“The important thing about an investment philosophy is that

you have one you can stick with.” David Booth

Fiduciary Oversight40

Certification for Global Fiduciary Standards of Excellence

Independent recognition of an Investment Advisors conformity to the

Fiduciary Practices defined by the Prudent Practices for Investment

Advisors handbook

ORGANIZE FORMALIZE IMPLEMENT

MONITOR

DisclosuresID

Lindner Capital Advisors, Inc. (LCA) is an SEC registered investment advisor. The information contained in this document is confidential and is intended only forthe use of the person to whom it is given and is not to be reproduced or redistributed without LCA’s consent. It is not a solicitation to invest in any specificinvestment product, nor is it intended to provide individualized investment advice. This presentation does not constitute an offer to sell or the solicitation of anoffer to buy any securities, nor will any sale of a security occur in any jurisdiction where such an offer, solicitation or sale would be unlawful.

Asset allocation and diversification strategies do not assure a profit or protect against a loss. Different types of investments involve varying degrees of risk, andthere can be no assurance that any specific investment strategy will be profitable. Each asset class has inherent risks associated with that asset class.Understanding these risks is critical to making reasonable risk/return comparisons and sound investment decisions. Each of LCA's strategies may make small-capand micro-cap investments, which are subject to greater volatility than those in other asset categories. Each of LCA's strategies may invest in fixed-incomeinvestments, which are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, corporate events, taxramifications, and other factors. Each of LCA's strategies may make international investments, which are subject to additional risks, such as currency fluctuation,confiscatory policy, political instability, or potential illiquidity. Investing in emerging markets may accentuate these risks.

Inclusion of market index information is for informational purposes only and does not imply that a strategy will achieve similar returns. Index performance does not reflect the deduction of transaction costs, management fees, or other costs which would reduce returns. An investor cannot invest directly in an index. The composition of an index does not reflect the manner in which a strategy is constructed in relation to expected or achieved returns, investment guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which may change over time.

Past performance is no guarantee of future performance, and LCA’s strategies, like most investment strategies, involve the risk of loss. Since no one manager issuitable for all types of investors, it is important to review investment objectives, risk tolerance, liquidity needs, tax consequences and any other considerationswith a financial professional before choosing an investment style or manager. The information contained in this document has been compiled from sourcesdeemed reliable and it is accurate to the best of our knowledge and belief. However, LCA cannot guarantee its accuracy, completeness, and validity and cannot beheld liable for any errors or omissions.

ID

Lindner Capital Advisors, Inc.

600 Village Trace, Building 23, Suite 300, Marietta, GA 30067770-977-7779 | www.LindnerCapital.com

LCA Story - PRES-A-120216

big enough to deliver, small enough to care · 2016-12-06 · 8 id staying disciplined matters...

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