David Booth pioneered index investing. Here's his advice for investors..
Summary
David Booth, a leader in index investing, advises investors to stay calm and keep investing despite market ups and downs. In his upcoming book "Stay Calm," Booth explains that accepting uncertainty in the market is better than trying to beat it, and that investing broadly and cheaply through index funds is an effective strategy.Key Facts
- David Booth co-founded Dimensional Fund Advisors, which manages $1 trillion in assets.
- His new book "Stay Calm" will be published on September 1, 2026.
- Index investing began in the 1970s as a way to avoid the risks and high fees of picking individual stocks or using active management.
- Booth studied under Eugene Fama, whose research showed markets are efficient and hard to beat consistently.
- Data shows most active fund managers do not beat the market after fees.
- Booth encourages investors, especially young people, to start investing early to benefit from compound growth.
- The stock market has averaged about a 9-10% annual return over nearly 100 years despite various economic crises.
- The higher returns come as a reward for taking risks by investing in stocks.
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