on November 3, 2026
On October 28th, I had the distinct honor of hosting a presentation with David Booth, founder of Dimensional Fund Advisors and author of the recently released book Stay Calm: Learn to Embrace Uncertainty in Investing and Life. David is a titan and a trailblazer in the world of finance and investing. He helped create one of the world’s first index funds in the 1970s and has spent his career applying groundbreaking financial theory and research to the practical world of asset management. Although investing can get very complicated very quickly, David’s book reminds us that one of the core tenets of investing is really quite simple: Stay Calm.
Investing and Staying Calm
The link between successful investing and staying calm is strong. Calm investors will make rational, evidence-based decisions on their own timetable. When the market shifts (for better or worse), they will not rush to make a change or pull all their money from stocks. Rather, they will ride the highs and lows of the market with a level head and a calm demeanor, understanding that, historically, the market always corrects itself and bear markets can easily morph into bull markets.
On the other hand, a nervous investor is likely to make rash decisions based on emotions, gut feelings, or the latest click-bait headline. They might follow recent trends or move large chunks of money around when they feel uneasy. When the market crashed in 2020, thousands of investors made the kneejerk decision to pull their money completely from the stock market. They listened to the doom-and-gloom influencers and news reports, and they didn’t trust that their plan, their portfolio, would weather the storm.
Well, the storm lasted approximately one month. One month, and the market made a miraculous recovery. And it didn’t stop there. We kept seeing historic gains, and the market soon was experiencing record highs.
Those who remained steady and calm during this time benefitted from their inaction. They rode out the hills and valleys of the market while things settled, and their investments grew. Those who let their nerves get the better of them had to buy back in at a loss.
How to Stay Calm
One of the easiest ways for an individual investor to maintain their sense of calm is to work with a trustworthy financial advisor to build a solid plan. This plan will be evidence-based, diversified, and designed to fit their unique goals and circumstances. A well-crafted financial plan should be sturdy. Robust. It should be able to endure prolonged bear markets, unexpected changes in circumstance, and surprise expenses. Few individuals can put together a plan like this, so it is prudent to work with an experienced financial advisor who believes in evidence-based investing.
Once you have a solid plan in place, leave it alone! Think long-term, don’t get distracted by investment trends, and do your best to tune out negative news and forecasts. You may need to rebalance your portfolio occasionally, but a financial advisor will be able to help you with this (no need to do it alone!). Tuning out the noise is one of the most important things an investor can do to remain calm and stick to their plan. In my next blog post (two weeks from today), I will address a few strategies for successfully doing this.
Although it sounds simple on the surface, staying calm is a vitally important part of being a responsible and, ultimately, successful investor. Those with a calm, measured approach are the ones who have historically prospered in the long run. And if you’d like more information on this, I highly recommend reading David Booth’s book: Stay Calm.
Here’s to calm, level-headed investing!