David Booth: Shocked People are Anxious About Investing

Summary

David Booth, co-founder of Dimensional Fund Advisors, discusses his book 'Stay Calm' and argues that investors should stay calm, stay invested, and avoid trying to outguess the market. He cites long-term stock returns near 10% and bond returns near 4-5%, says professional managers generally fail to beat the market, and defends index-based investing as still price-efficient. The conversation also touches on Dimensional's ETF share classes, fee compression, and his optimism about public markets.

• Booth says panic selling during 2020 caused investors to miss a sharp rebound.
• He states long-run stocks return about 10% annually and bonds about 4-5%.
• He argues active managers generally do not beat the market, favoring low-cost indexing.
• He says rising index ownership has not made markets inefficient because trading volume remains high.
• He expects AI and better data processing to make markets more efficient.
• Dimensional added ETF share classes mainly to make investing easier.
• Booth expresses optimism about public markets despite widespread anxiety.