DFA video

Booth, Fama and French: Perspectives on Market Volatility

Disclaimer: This article contains information that was factual and accurate as of the original published date listed on the article. Investors may find some or all of the content of this article beneficial but should be aware that some or all of the information may no longer be accurate. The information and/or data in this article should be verified prior to relying on it when making investment decisions. If you have any questions regarding the information contained in this article please call IFA at 888-643-3133.

DFA video



Volatile markets can be stressful for investors. But volatility also can be viewed in a more positive light. Price changes show that markets are working as they quickly incorporate new information into stock prices. A sound investment philosophy can guide behavior during periods of uncertainty, just as a personal philosophy can help us deal with adversity in other areas of life.

In investing, it is important to remain disciplined. Dimensional has strongly advocated for the important role advisors play in setting client expectations and encouraging discipline. Advisors can help investors understand markets and investing, feel comfortable with uncertainty, and relax in the knowledge that they should be well positioned to participate in capital market returns over time.

To help reinforce client discussions, the “Perspectives on Market Volatility” video offers insight from Dimensional thought leaders on this topic. Consider a few select quotes from the video:

“You can relax in the sense that you know the animal you’re riding, and it could turn out well. It could turn out badly over short periods of time. But it is the animal that you know.” 
—Eugene Fama

“A big challenge for an advisor is to help clients understand that this was a normal outcome and that, ‘No, we don’t need to adjust our portfolio because this quarter it went down. This was in the range of perfectly reasonable outcomes.’” 
—Kenneth French 

“What the advisor does is he or she spends time with the client, basically gives them discipline around the process, around their investment policy statement, and really helps the client stay in the markets through good markets and bad.” 
—Dave Butler