From pings and dings to tariffing things, there is more noise than ever in financial markets. A once-basketball player turned money man, Dave Butler Co-CEO of Dimensional Fund Advisors says tune out the noise. Butler believes investors can follow a clearer road with evidence-based signposts. His firm’s documentary, “Tune out the Noise,” chronicles the early days of modern finance to present day from the concept of market efficiency to the advent of index funds and the evolution of client-first financial advice. 

Despite the democratization of finance, some investors still utilize dated strategies in an attempt to predict the market. And there are real behavioral challenges investors face. Butler acknowledges that financial success can also be clouded by behavior and personal background that can influence decision-making. Butler shares his own encounter with that with his Boston Chicken story. It was a cautionary tale of risk, as he recalls investing about half his net worth on a single stock that did not perform well at all. It was a reminder of the unpredictability of a single stock. 

Butler argues that the evidence overwhelmingly supports a different approach: leveraging the power of diversification, keeping costs low, and in Dimensional’s view, tilting portfolios toward factors like size, value, and profitability based on academic research. But if he had to boil it down to a few principles, Butler underscores the importance of adhering to three tenets: markets work, costs matter, and diversification is essential.

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