Stay Calm

SPEAKER_03 0:04

Noise, noise, noise. Let it pass, let it pass. Markets rise, markets fall. No one knows the turn at all. Spread the risk, keep the cost low. Trust what the long record shows. Stay calm. Stay calm. Hold the world and hold it long. Stay calm. Stay calm. Let the evidence be strong.

SPEAKER_02 0:47

Talking real money.

SPEAKER_00 0:53

Another really special song for, well, a really special show, because we're going to do something that we almost never do.

Booth on Staying Calm

SPEAKER_00 1:03

On the podcast today, on Talking Real Money, we're going to spend a little time with someone we've talked to in the past, someone who made a dramatic difference in the investing industry in his life. There are only a few people who have really changed the way we invest. One of them was Jack Bogle from Vanguard, who we've talked to. The other is a gentleman by the name of David Booth. You've probably heard of him from, well, he has a school, but he's also the founder and he is currently the chairman of the board of Dimensional Fund Advisors. And David, welcome back to Talking Real Money.

SPEAKER_04 1:40

Well, thanks for having me.

SPEAKER_00 1:41

It is such a pleasure. And you're here. We get you when you have a book. And you have a new book. And just real briefly, what's the book? What's it about?

SPEAKER_04 1:53

Well, I mean, the title kind of says a lot. Stay calm. Our view, and in fact, when we did the movie a few years back, uh three years ago, the um the view was if if we help people better understand how markets work, they would be able to make better decisions or work with their advisors and make better decisions. So if they do that, they can feel hopefully more optimistic and have more confidence that they're going to have a good investment experience.

SPEAKER_00 2:28

Aaron Powell Now it's been our experience as folks who have been talking to people on the on the radio and on our podcast for decades that those two words are some of the hardest things for investors to do. Staying calm. Our emotions are fighting us. So how do you do that?

SPEAKER_04 2:46

Well, I think it boils down to you got to feel comfortable that you're making good decisions. You know, if you make good decisions or or stated differently, if you make the best decision you can, then um you're more likely to be able to stay calm. Because if you make the best decision you can, sometimes it works out, sometimes it doesn't. That's why we call it uncertainty. Um But if in and even during those times when it doesn't work out, you uh don't beat yourself up so much because you made a good decision.

SPEAKER_00 3:21

It just didn't work out. Well, we are so emotional, though, uh on both sides of the investing question, and that is uh the the fear that comes when markets are declining and the greed that comes into play when they are or have

Handling Market Emotions

SPEAKER_00 3:37

been, I I always have to remember to use past tense, have been rising. And how do you keep those those powerful emotions in check? Uh, other than having having the plan, what do you do to keep people from misbehaving?

SPEAKER_04 3:54

Well, I mean you you start with having a good plan, as you mentioned. But then you go back to I think you just kind of go back to first principles. You know, um control what you can control. You can't control what's going on in the market. Here's uh kind of I th I think of as the classic mistake in thinking that people have. They hear about some bad news coming in about the market or a stock. And they go, oh man, that makes me nervous. Then they look and they find out, you know, the price has dropped already, tw you know, fifteen, twenty percent. Oh man, I gotta get out. So here's what I tell people when you get into a situation like that, okay, let's repeat that. You got bad news coming in, uh markets dropped a lot, um then what you your response should be, well, I think the market's dropped about what it should give the information we had. I I go back to the pandemic. First quarter the market's down twenty percent, roughly. People are pulling their hair out. What are we supposed to do? Um what's gonna happen? I go, I don't know what's gonna happen. Uh but uh here's uh here's what I think is going on. We've had bad news coming about the pandemic. You know, the consensus is that's maybe a two or three year problem. So the market being being down twenty percent is about right. So the going forward, there's no reason not to expect you'd have a positive expected outcome going forward because the market adjusted adjusted already. And that's what happened. I mean, I l I looked pressioned, but because the market ended up being uh uh up twenty percent for the year after being down twenty percent the first quarter. So it it came back fifty percent after the first quarter. So people were sitting there and got out of the market, you know, they missed out on that fifty percent run. You know, the market doesn't give you a do-over. There are no mulligans in investing. So uh yes, over the long haul, stocks have done 10% a year or so. And uh but you have to be there to get it. You can't be sitting on the sideline when there's a big run-up.

SPEAKER_00 6:11

Aaron Powell Well, I think though, as inve well, just as human beings, one of our biggest problems is the fact that we want to know the future. We want some certainty about what's happening next. And as you say, it's the uncertainty that drives those average annual 10% returns over a hundred years.

SPEAKER_04 6:31

Aaron Powell Absolutely. It's uh I I know we want uh people who would like to be able to predict things, but some things are just not predictable. The s not stock market is one thing, where you'll be twenty years from now is uh you know another. So life is inherently unpredictable, and so as is the market. So it goes back to your point earlier on. You gotta have a good plan. Don't try don't don't try to predict the unpredictable. Get a sensible plan, pay attention to what's going on, you know, adapt to whatever happens, you know, and uh be flexible and above all, you know, control what you can and basically manage what you can't. You know, we tell people Yeah, life is uncertain and investing is uncertain. Um but it's uh uncertain uncertainty though that creates the opportunity, as you alluded to. The uh if there were no uncertainty in life, uh you wouldn't have been able to progress. And similarly, in investing, if there were no uncertainty, then every all investments would be riskless and they would all have the riskless rate of return.

SPEAKER_00 7:39

So the riskless rate of return is what that four percent we're s we see in bonds, right?

SPEAKER_04 7:43

Yeah, right.

SPEAKER_00 7:44

Which really is just over inflation, but barely.

SPEAKER_04 7:47

But barely. And that's historically bonds have done about one or two percent above

How Factors Earn Returns

SPEAKER_04 7:53

inflation.

unknown 7:53

Aaron Ross Powell, Jr.

SPEAKER_00 7:54

So that brings us to this thing that you call and and really I think DFA and you and uh Dr. Fama and French kind of coined this whole concept of factor investing.

SPEAKER_04 8:07

Right.

SPEAKER_00 8:07

And when it comes to factor investing, is isn't that uncertainty like the first factor, the driving factor?

SPEAKER_04 8:17

Yeah, the uncertainty about the overall market is uh is that's uh that's how kind of the science of investing started with a model of uh risk and return that was um based on uncertainty. You know, the in the early years we thought of risk as being uh a stock or portfolio's beta. You know, if you had a beta greater than one, you had relative fluctuations greater than the market and beta less than one. You fluctuate less than the market. And uh and then Fama and French had to break through. Well, it's more complicated than that. Uh there's these other factors or dimensions of returns that cut through the whole stock market. So I think the way to think about investing is you start with the overall market. And you know, market you can buy the stock market, market portfolio uh very cheaply and very easily these days. And then if you say, well, how what can I do to improve upon the market? Well, you take into account, you know, these factors or dimensions. We've the two uh basic first ones identified by Faum and French were you know company size and then uh the price of the stock, low price versus high price. So you can um but uh you know part of what we're trying to do here is get some people to invest at all that have never invested. So we like to start with the market. People can understand that pretty well. Uh when you start getting to these factors, I think most people need to have an advisor to help them out.

SPEAKER_00 9:53

Yeah, although, well, we'll get to that in a minute. The the fact that now dimensional as opposed to being available only through advisors is available to anyone because of the exchange traded fund market. But let's get to that after we talk a little bit more about factors. You mentioned size and you mentioned value as being two of the early factors. There's the risk factor, which means you're getting rewarded for taking risk. If you're going to take risk, there should be an expected, albeit not guaranteed, reward, right?

SPEAKER_04 10:23

Right.

SPEAKER_00 10:24

Then why are we rewarded for size and value?

SPEAKER_04 10:32

Well, those you know, that's the subject of intense academic research. I I think um I think you're always better to kind of go back intuitively. Uh look appeal to your intuition first and then look at the academic research, you know, second. First off, smaller companies are just most people accept that they're riskier. You know, they um because they're smaller, and um and that appears to be true. And the the value story is low price. Um low price stocks have higher average returns than high price stocks. So um why would that be? Well, all other things being equal. The lower the price you pay for something, the better your eventual return. So that's part of the intuition.

SPEAKER_00 11:19

Yeah, well, I kind of refer to it as the duh factor. Oh, they're smaller, they're riskier, you get rewarded more. They're they're undervalued, they're having troubles of some kind. If they do well, you might get rewarded more. That's held up pretty consistently, but there have been times when the value factor and the small factor have come into question.

SPEAKER_04 11:43

Well, oh, I can give you a story about that for sure. Our first nine years, basically all 90% of what we had under management was U.S. small cap stocks, which we started the firm just at the beginning of the worst nine-year run for small stocks relative to large stocks.

SPEAKER_00 12:02

So here we are, Brandon. So you're not a market timer then. You're not very good at timing.

SPEAKER_04 12:07

Inflation, uh, when we started was still double-digit, you know, it was I don't know why. I guess it's because I was young. We thought we could start a firm, an equity firm in those days. But um that but that tells you there's a point. I mean, these all these factors, even including the overall market, if you if you're a statistician, it probably takes you usually 20 or 30 years to conclude that um stocks have a higher average returns than uh money market funds. Yeah, we all inherently believe that's the case. And that's that has shown up over long periods of time. But there's so much variability around that, it takes an awful long time to document that statistically.

SPEAKER_00 12:51

But again, it comes back to it being a duh factor. Like duh, all right. Like, for example, what took so long? Why is it that's the reason you just explained? Why did it take so long to come up with the profitability factor? I mean, if they're making more money, they're likely to make you more money, right?

SPEAKER_04 13:12

Well, that's right. Uh but it's uh I think the problem is uh, you know, gap methods. I mean, the the the way you you report incomes, uh, you know, profitability. Um it took uh people, um researcher Robert Novi Marks, who works with us, it took him um uh a very clever way of measuring profitability. And then it took a couple of years of him presenting his research findings to major business schools around around the country. And then finally, you know, Professors Faum and French said, Hey, look, we've got a guy here, Robert Novi Marks, has this new factor profitability, and he's defending it very well. So maybe we ought to look into it. So we replicated his research, you know, came up with the same findings he did. So we invited him uh to join our team.

SPEAKER_00 14:08

So for an average investor, what you're saying is that the research is incredibly robust before you ever adopt a factor as a part of your investing philosophy at Dimensional.

SPEAKER_04 14:21

Yeah, that's right. I one of the things that drives me crazy in this business is you go in to visit a client and they go, hey, you know, this other firm was just just here, and you know, last night they did a new um uh research report, you know, had some new regressions, and they uh were going to create a fund about it. I go, what do you mean they just did the research? They haven't vetted it in the public.

SPEAKER_00 14:45

They just did the research, like yesterday. Aaron Ross Powell, Jr.

SPEAKER_04 14:47

They did yeah, right, on the on the on the bus ride over or whatever. You know, it's uh um whereas Fama and French, you know, are um two of our uh directors of the firm and Fama was one of the founders, the um they insist on um before we uh do anything with their research, they insist that it they it be in the public domain. Um there's so much bad research out there where people come back with research findings that that nobody else can ever replicate.

SPEAKER_00 15:21

You mean that's uh So those aren't factors, those are just That's data mining and data mining or some luck, too.

SPEAKER_04 15:29

Yeah, right. It's data mining and just uh you know poor Well, hopefully they people aren't fudging the data.

Testing Efficient Markets

SPEAKER_00 15:37

Um Well Dr. Fama's claim to fame, Eugene Fama, Nobel Prize winner, his claim to fame is the is the the whole idea of efficient markets. That markets are incredibly efficient.

unknown 15:50

Right.

SPEAKER_00 15:50

So if markets are incredibly efficient, why don't we just buy the total market index instead of tilting to value or small or profitability or whatever it might be?

SPEAKER_04 16:02

Trevor Burrus Well, I mean the um we can get a more scientific explanation, but I think first off, I think the way you outlined it is a way to start to think about it. Let's look at the overall market first. And then um uh but not all stocks are equally risky or not, you know, they're they don't all have the same expected return. So that's when we look at the research into finding are there way better ways where we can identify uh these factors that might help us explain why some stocks or portfolios have higher average returns than others. And um then once you get to a robust research finding and you vetted it in in business schools around the world, then uh you still have to decide, do I really believe this or do I think this is data mining? You know, when we when Fama and French published their what turned out to be a landmark paper in 1992, identifying these this size and va value factors, you know, people said, well, how do we know this is not data mining? So we did a couple of things. One is we paid for the data on stocks outside the US. So Fama and French replicated their work on markets outside the US, came up with the same uh you know, same conclusions. Then the the original data started in 1963. We hired painstakingly people to go back and collect the data from 1926 to 1963. This is accounting data. You can't believe how difficult it is to collect that away.

SPEAKER_00 17:45

It's probably in handwritten ledgers.

SPEAKER_04 17:47

Ah man, yeah. And then at the end of the day, people have to trust you did it right. Yeah. So there's a lot of uh painstaking work going into uh developing research quality data. But anyway, when once we got the data done, they looked at the data from 26 to 63 and they found the same factors that they identified in their post-63 data.

SPEAKER_00 18:11

Aaron Ross Powell And if they could go, you you would, I would guess from that extrapolate that if they could go back even earlier, back into the 1800s, they would probably, if they had the data, find the same thing.

SPEAKER_04 18:22

Aaron Powell Well, not only if they had the data, but if they had accounting standards that were that were believable. You know, the modern accounting I think really starts in about the 30s, you know, so you start going back uh pretty far. You don't know if you can really trust the data.

SPEAKER_00 18:36

Aaron Ross Powell So the Wild, Wild West was really the wild, wild West when it came to money. There was there was no accountability.

SPEAKER_04 18:43

Yeah. But in speaking about data, I mean that was really the breakthrough, right? Uh before 1960, re you couldn't do much research on stock and bond prices because you didn't have the data, research quality data. You didn't have computers big enough to really process the data, even if you had it. And it all changed in the 60s.

SPEAKER_00 19:05

Is that why we saw the major change in thinking that occurred between when you started in the industry back you were Wells Fargo, right?

SPEAKER_04 19:14

Right.

SPEAKER_00 19:15

When you started in the industry and uh today that we have now seen this gigantic shift from the belief, the fervent belief that people can, with enough data on people in a parking lot or sales uh at a front counter, make a decision as to which stocks are likely to do better than others. Is that data, the fact that we it's so massive, been a part of that?

SPEAKER_04 19:37

It it it uh absolutely. Uh before uh 1960, you could claim almost anything because you didn't have the data. So uh um and well we found f first thing we found from the data is that it looked like professional money managers weren't worth the cost. That was a huge shock. And that was a challenge uh to uh conventional wisdom and to Wall Street, and really to basic human intuition. Most people just grew up believing if they're smarter and work harder, they can probably beat the market. Uh well, it turns out even the pros can't do it. Um and that was a that

Why Active Managers Persist

SPEAKER_04 20:18

was a shock.

SPEAKER_00 20:18

Yeah, but we've spent the past, I don't know, like 30 years, at least in my broadcasting career, basically proving that active stock picking management, traditional management fails more often than it succeeds. Faum and French's own study, the Swiss Finance Institute, where they found that if even if you do outperform, most of that outperformance is attributable to luck. Given that amount of time, why do so many active managers persist?

SPEAKER_04 20:50

Well, I mean, that is a really good question. I think it's it comes back to um it's really hard for people to accept the evidence. Um their intuition is just so strong. And that's why we we spend, as you know, uh a large part of what we do is try to educate clients about markets and how they work. I mean, this is nothing but good news. The first off is uh managers don't seem to be able to beat the market. Let me explain the good news in that, and that my parents never really invested in the stock market because they thought of themselves as outsiders, and insiders would make all the money and take advantage of them. Well, it turns out that's not true. You can do as well as you know as the pros, because you can buy the market in any number of places, very inexpensively. So that takes that argument away. You know, and then the second part of it is you know, stock and bond returns behave like we hoped they would. You we now have a hundred years of research quality data. I mean, that you start with the Great Depression, go through World War II and so forth, Great Recession, pandemic. Through all those periods of very stressful periods, stocks done ten percent a year. I mean we ought to be having a ticker tape rate.

SPEAKER_00 22:12

Last four years even better than that.

SPEAKER_04 22:15

And and I and I think also the r the ri you have to ask why do you have a ten percent return? And I think uh the the short answer is because stocks are riskier. I think the uh a better answer or a bigger part of the answer is about human ingenuity. You know what happens you take in the pandemic, all of a sudden the pandemic hits. You know, people are asking, what am I supposed to do? What what's gonna happen? I go, I don't know what's gonna happen. Oh, here's what I believe. What I believe is that people want to make always want to make their lives better and the lives of their family. And when they go to work, they want to make their f firms better. So this pandemic hitting their hitting the economy and the firms, people aren't just gonna sit there and take it. They're gonna figure out uh what to do differently, get back on track or even um you know, get ahead. And there'll be winners and losers. I don't it's hard to predict who the winners and losers will be. But this power of human ingenuity will you know propel us forward faster than you might think. And that's what happened. The economy it was a one-quarter recession. The even though we went down twenty percent for the year, it ended up up twenty percent for the year. Uh it's um it was down twenty percent for the quarter and up twenty for the year. So um that's that's what people ought to focus in on. You know, when um the market's down and there's bad news like in the pandemic, you know, people need to say, look, the market's down 20% given what we know about the pandemic. That seems to be about the right number. So uh the market's done its job. So now it's seems like a good time to invest.

SPEAKER_00 24:09

Well, we've had the the the best literally the best four years ever for stocks are pretty darn close. I mean, yeah. Isn't it time to panic?

SPEAKER_04 24:22

Uh no. The um that's the that's a d that's the flip side of that coin, you know what? Um I remember a few years ago we had a kind of a barrage of months where we hit new eyes, and people go, oh man, we hit uh new eyes again and again. You know, uh shouldn't we get out? Well that was before. And now we've had this last four years. You know look, um you know, um trees don't go to the sky. I mean, they uh you can't um you can't have fifteen percent returns forever.

SPEAKER_00 25:01

But then the good news is left to the their own devices, the forest will get bigger.

SPEAKER_04 25:05

The forest will get bigger. So we don't know you know, about once a generation you have market down fifty percent. That's life.

SPEAKER_00 25:13

I mean that so um, so you're saying maybe maybe you and I have already seen our generational bear market, our generational uh uh Great Depression kind of market.

SPEAKER_04 25:26

Well, I'm a little older than you. I've I've had two down fifty percent periods, one the 73-74 uh downturn. Okay, I was a youngster, yeah. Here a year, yeah. And then we have you know the 2007-2009. Uh those are nasty periods. And you know what it is, people have all this anxiety, and like I say, hopefully they read the book, the they'll feel better about markets.

SPEAKER_00 25:51

Um But the amount of anxiety now, I don't think compares with the anxiety people must have had in in 1929 when the depression hit or I don't know though, because 29 it was so few people who owned any equity securities and and they had taken on debt up to the eyeballs to to buy these stocks. Uh i it it was far more uh well, I mean, we do have gambling now, but it was it was it was a lot more like a casino then than it is today.

SPEAKER_04 26:24

Aaron Powell Well, it may have been. I you know, I I don't know. There are definitely a lot fewer people. Uh but the

Buying, Gambling, and Crypto

SPEAKER_04 26:32

uh but I I'm getting at is that uh anxiety is kind of one of the byproducts of investing in markets.

SPEAKER_00 26:40

Well, but we now we we have made mar uh investing in the market so accessible to everybody now. I between uh Vanguard and you guys and and all of the the the fidelities of the world where low-cost indexing or low-cost factor investing, uh the the costs have gotten so low that is there any reason why anybody would do anything else now?

SPEAKER_04 27:07

Well, I don't think there's any reason to do anything else for sure, but I'm kind of biased here.

SPEAKER_00 27:12

But there still is a lot of anything else. I mean, you see the explosion in gambling that we're seeing through prediction markets and sports betting and Robin Hood and and the like.

SPEAKER_04 27:24

So the way I deal with that is look, um, it doesn't make any sense these prediction markets, you know, it's a negative expected outcome. Um but you can't if somebody's really got the bug, there's nothing you can say to deter 'em. So rather I just say, okay, well look, look, if you really want to pick stocks, let's take ten percent of your portfolio and and you can do wild things with it, whatever you want. So but for the ninety percent, let's come up with a sensible plan, you know, that so that over the long haul you have a high likelihood of meeting your investment objectives.

SPEAKER_00 28:01

Well, I catch a lot of grief over crypto. A lot.

SPEAKER_04 28:05

Okay.

SPEAKER_00 28:05

I'm t told I'm totally out of touch by all the little crypto bros who review the show. What do you think of things like crypto?

SPEAKER_04 28:13

Well, I don't understand why it would work, so I don't can I don't I don't invest in things I don't understand.

SPEAKER_00 28:19

They're gonna call you an old fogey, though, David. They're gonna say, you just aren't in, you just aren't up on the the latest technology.

SPEAKER_04 28:25

Well, I am an old fogey. What can you say? You know, me too. I mean so uh it's a nice thing about uh getting older is you can be a fuddy duddy. I mean, that's you're you're allowed.

SPEAKER_00 28:37

Well we had a talk we had something come up recently on the podcast where uh somebody asked us about some structured note products, these complicated, convoluted uh creatures that are supposed to give you these high returns and low risk. What's your thinking of those?

SPEAKER_04 28:53

Well, I mean it covers a wide range. Uh the um first thing I I look at is um what are the total fees that I'm paying for something like that? Uh usually a lot of those things come with at pretty high fees. So you have a kind of a high bar you have to achieve. Um in my experience, you know, there there are some seemingly complex things that might work, but in general, um I think it's hard to beat coming up with a simple plan, just a simple mix between you know, stock market portfolio and a low risk portfolio to find the combination that's good for you. And over the long haul that's really that's really tough to beat. Um so I'm not I don't I rarely get attracted to those kinds of ideas.

Avoiding Stock Catastrophes

SPEAKER_00 29:46

You mentioned that you have on the walls of your office the stock certificates of twenty-four corporations that lost all of their value. Those certificates are worthless. Um They're they're like uh you call them the headstones of active investors. What's your favorite corpse of all those?

SPEAKER_04 30:06

Oh, God, I've been so long I can't even I never knew th their names to begin with. I mean they were pretty pretty obscure. So uh my memory is pretty faulty anyway. No, but I think that's kind of the point you're talking about, which is look, uh people are worried about a catastrophe and they want to feel safe. You know, if you invest in an individual stock, it can go to zero uh the price. The stock market is not going to zero. So that's your first protection level of protection is buy the whole market. That way you don't have that risk.

SPEAKER_00 30:37

It eliminates then what you're saying, the the we had the risk of of total loss. You can't lose everything if you own the market.

SPEAKER_04 30:44

Right. You take the worst period of time. You can't now th during the Great Depression there were kind of some extremes and and movements. So the way you handle that is don't put all your money in stocks. Let's say you put half your money in stocks, um and you've cut that risk in half. So there's there's a combination of stocks and low-risk um investments that's right for everybody.

Fear Versus Bull Market Euphoria

SPEAKER_00 31:13

As we're getting closer to the end here, a couple of more questions. This one I I thought about this a lot. What is more dangerous to you? The fear that people have during a bear market or the envy and excitement that occurs during a bull market.

SPEAKER_04 31:30

Oh the That is a that is so tough, because I mean in both cases people can do goofy things. Uh you know, uh all of a sudden you find day traders again coming back if when things are going well or when things go poor poorly. But I I I guess the the thing I've been most sensitive to over the years is just the heartbreak that comes from watching people get out of the market like in March of 2020 and then miss out on a big uh a big run. The the people that get over like uh exuberant on a on an upmarket, um you know it if they've already made a ton of money, if if their money's already doubled, and they lose half at that point, then they're back to where they start.

SPEAKER_00 32:22

So I guess I'm I have You're a glass half full kind of guy.

SPEAKER_04 32:27

Yeah, right. Yeah.

SPEAKER_00 32:28

So if there is one message that you have learned through your many years in this industry, um what would that like one paragraph message be to investors?

SPEAKER_04 32:40

Well, that's why I wrote the book. Stay calm, stay invested, and let markets work for you.

SPEAKER_00 32:46

That's it. Let me do this. Let me real quickly, okay. Let me ask you about exchange, because I said I would do this.

ETFs and Advisor Value

SPEAKER_00 32:54

What has the change from a mutual fund, primarily mutual fund company, to an exchange traded fund company now? What has that done to make dimensional different than it was?

SPEAKER_04 33:05

Well, in the in in in the old days, uh the only way you to invest was was through the mutual fund, which means you had to fill out an application form and wire money to our custodian bank. Um and then uh exchange trading funds came along and you were able to access them through your brokerage account.

SPEAKER_00 33:24

Uh on your own.

SPEAKER_04 33:26

On your own. And now we are uh um we've merged uh we're in the process of merging exchange traded and regular mutual fund. So you have two sleeves coming out of the same investment pool. Now investors um in ETFs you have to sell to investors. They don't we I don't know how many phone calls we get a day from people we don't know, but very, very few. Uh very few over a month. So yeah, we're available to to everybody.

SPEAKER_00 34:03

But there's not a lot of of seeking you out unless it's through an advisor, is what you're saying?

SPEAKER_04 34:08

Yeah, right. You have to you have to work at it.

SPEAKER_00 34:11

So the advisors the advisors are still an important part of what dimensional does.

SPEAKER_04 34:15

Actually, they're m more important uh than than I I ever realized. And that um and I I like a pr draw parallel between that and say you know, med medicine. You know, if you have a severe medical problem, you go to see a doctor. You don't you better not self-medicate in general. And I think the same th everybody, as it turns out, has a severe financial problem. If you have a a a zillion dollars, you you still have a lot of issues. You know, nobody can be perfect perfectly knowledgeable about insurance and tax, estate planning, so on and so so forth. You need you need um financial advice from somebody you trust.

SPEAKER_00 34:59

Just as you And hopefully somebody who doesn't charge too much.

SPEAKER_04 35:02

Well, I mean people people need to get a fair uh price for what they do. Um but that's right. I mean you want to be you wanna in addition to the to the bromite I just gave, stay calm, stay invested, and and uh let markets work for you. We'll throw in a dollop of and pay attention to fees and taxes.

SPEAKER_00 35:22

That's the best advice anybody could give. The new book is out the day this airs. We're we're this airs on uh on the first of September. David Booth's new book is called Stay Calm. It's available everywhere. There is a link down in the show notes if you want to just click on that so you can get right to the book and go get it. David Booth, it is always a pleasure to have you on the program. We love your wisdom and your sensibility and uh just the way you approach life and money. And thank you so much for being here.

SPEAKER_04 35:51

Thanks for having me.

SPEAKER_00 35:53

David Booth, the founder and chairman of Dimensional Fund Advisors.

Show Outro and Disclosures

SPEAKER_00 35:58

And stick around because uh I've got a little musical surprise at the end of the show. And remember, we're here almost every day.

SPEAKER_03 36:06

Talking real money forty voices before the morning, every one of them searching and laughed, a number at the top of the hour. Somebody paid a shout at the crowd. They sell you the fear, they sell you the hurry, they sell you the things you don't know.

SPEAKER_02 37:07

None of it ever was meant for you.

SPEAKER_03 37:12

Let it pass, let it go. Noise, noise, noise. Let it pass, let it pass. Somebody counted in a quiet room, and nobody there had a thing to sell.

SPEAKER_02 37:33

They ran every fund, every year, every name.

SPEAKER_03 37:38

And the answer came back like a bell. They published it twice. They published it over again.

SPEAKER_02 37:52

And it said the same thing it said that start.

SPEAKER_03 37:57

And it said the same thing back then. Mark it's moved Market's gone. Every price must tell you That is the end I saw Every price is an argument settled. A million gets it folded to one Whatever you learn, price learned it first. Long before your day had begun There's nothing at all in your clever hand That isn't already in the song So let it go, let it pass, let it be And let the long years come Noise, noise, noise Let it pass Let it pass Markets move Markets know Every Price will tell you so cost is more time is long That is the end song So own the whole market, own every name Then tilted the way the research shows Toward the small, toward the cheap, toward the ones that are That's where the extra return grows There's no extra pay without extra risk And anyone promising more is a fool And the cost is the one thing under your hand So keep it low and keep to the rule They tell you that There's no free lunch to be had There's one and the price is small You give up the brag and the beautiful bat But you keep the climb while you soften the fall list No commission in a truth like that So hardly so it now And we will keep on ringing that bell No Let out Let Stay on Stay on Hold it on Hold it alone Stay on Stay Congress No Every Price Every Price Ever Small Time is Long That is the Nobody knows the future That is the intime Noise Noise Noise Doing with Letter Pass Stay calm That is the in time The opinions and views expressed on this podcast were current on the date recorded.

SPEAKER_05 42:16

Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and our subjects change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. Although information and opinions given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Information presented on the podcast is not personalized investment advice from Apollo Well. The views and strategies described may not be suitable for everyone. This podcast does not identify all the risks, direct or indirect, or other considerations which might be material to you when entering any financial transaction. We hope you realize that the information provided on Talking Real Money is for informational, educational, and hopefully enjoyable purposes only. The podcast is not trying to get you to buy yourself any financial products or securities. Instead, the program is provided as a public service by Apello Wealth, a fee-only registered investment advisor. See Apello Wealth's ADB part two and on our website for information regarding Appello's fees and services. Apelled Capital L O C D B A Apello Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in the states where it is properly registered, or excluded or exempt from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill of training. Appello does not provide tax or legal advice, and nothing either stated or implied here should be inferred as providing such advice. Thanks for listening, and please visit talkingrealmoney.com for more information and important disclosure related to performance of any specific index or fund quoted in this podcast. The lawyers get richer.