'Stay Calm': Legendary investor David Booth on the importance of staying invested

Summary

David Booth, founder and chairman of Dimensional Fund Advisors, discusses his book 'Stay Calm' and argues that investors should embrace uncertainty and remain invested in broad market index funds rather than trying to time markets or pick stocks. He highlights long-run equity returns and the market's role in setting prices to generate positive expected returns after selloffs. Booth also recalls Dimensional's early focus on smaller companies outside the S&P 500.

• David Booth promotes staying invested all the time rather than exiting during drawdowns.
• He argues that broad market index funds are a simpler and better path than active stock picking.
• Booth says stocks have returned about 12% annually with dividends over the last 50 years.
• He describes market pricing as a powerful AI-like mechanism for setting prices.
• He recalls Dimensional's early focus on the roughly 4,000 U.S. companies outside the S&P 500.
• The conversation emphasizes managing uncertainty in both investing and life.