2026 MIC – David Booth on Five Decades of Evidence-Based Investing and Why Staying Calm Is the Hardest Edge

Few careers in asset management span as much intellectual territory as David Booth’s. Speaking at the 2026 Morningstar Investment Conference in a wide-ranging conversation with Morningstar Senior Principal Bridget Hughes, Booth, Founder and Chairman of Dimensional Fund Advisors, reflected on more than fifty years of applying academic finance to practical portfolio management. He co-founded Dimensional in 1981 out of a Brooklyn brownstone apartment alongside Rex Sinquefield, helped build what is now a global firm that crossed one trillion dollars in assets under management this year, and worked closely with Nobel laureates including Eugene Fama and Merton Miller throughout his career. His message at the conference was plain: markets work, uncertainty is an asset rather than a liability, and the biggest risk most investors face is their own anxiety.

The Outsider Mentality That Built a Firm

Booth traced his instincts back to arriving at the University of Chicago Graduate School of Business in 1969 as a young man from Lawrence, Kansas. He described the environment as electric, surrounded by people who would go on to win Nobel Prizes in economics, at a time when the efficient markets hypothesis and factor research were treated by the mainstream as something close to heresy. That outsider quality, he argued, was exactly the point.

Booth said he thinks most people feel like outsiders, and that his own parents were so skeptical of financial institutions that they never invested in public markets at all. To him, outsiders are not people on the fringe for its own sake but people genuinely challenging the status quo. The ideas he and his colleagues were developing in the early 1970s were powerful precisely because the establishment had not yet accepted them. He left academia not because the research was finished, but because he wanted to apply it.