In his new book, Stay Calm: Learn to Embrace Uncertainty in Investing and Life, David Booth, the founder of Dimensional Fund Advisors, offers up a simple, enduring philosophy for coping with uncertainty.
David begins his story in small-town Kansas, where he grew up with little money. His early recollections are those of taking on many small jobs to help pay the bills — from selling newspapers to shoes — an upbringing that stressed hard work, humility, and honest dealing. Those roots inform lessons that should sound familiar to Forum clients:
- Don’t Predict, Plan: Predicting tries to foresee a single outcome, while planning can prepare for whatever may happen.
- Control What You Can Control: Your savings rate, your asset allocation, and your diversification are levers you hold; what the market does is beyond our control. With the world becoming louder — making it harder to “tune out the noise” — our own discipline and focus become more valuable.
Booth also reframes uncertainty itself. Rather than something to fear, uncertainty is the very source of long-term returns and many of life’s joys. Without uncertainty, stocks would offer nothing beyond what Treasury bills provide, and first dates wouldn’t give us a nervous pit in our stomach. As he writes, “Far from leaving us helpless, this approach grants a sense of freedom and optimism. The world will continue throwing curveballs—tornadoes, economic downturns, reorganizations at work, and even health crises. But by applying a disciplined, evidence-based framework and directing our energy toward what we can influence, we become both more stable and more adaptable.”
For Forum clients, these ideas are more than philosophy. Many of the mutual funds and ETFs in your portfolio are managed by Dimensional, the firm David Booth built on these principles. If you would like to hear more directly from its source, you can find out more about the book at staycalminvesting.com.
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