Welcome to the Fear and Greed Business Interview. I'm Suan Aylmer. If the last few months or anything to go by, investors are in for a bumpy few years. US President Donald Trump has shown he's not afraid to cause volatility in global markets, making major announcements then pausing altering them. Who knows. So how does a global investment giant handle turbulence in markets and what role do financial advisors play in keeping every day investors on track. Dave Butler is the co CEO of Dimensional Fund Advisors. Dimensional is a global investment firm which by the end of last year had reached one point three trillion dollars in assets under management. He's visiting Australia at the moment and joins me in the studio. Dave, welcome to Fear and Greed.

Welcome to the Fear and Greed Business Interview. I'm Suan Aylmer. If the last few months or anything to go by, investors are in for a bumpy few years. US President Donald Trump has shown he's not afraid to cause volatility in global markets, making major announcements then pausing altering them. Who knows. So how does a global investment giant handle turbulence in markets and what role do financial advisors play in keeping every day investors on track. Dave Butler is the co CEO of Dimensional Fund Advisors. Dimensional is a global investment firm which by the end of last year had reached one point three trillion dollars in assets under management. He's visiting Australia at the moment and joins me in the studio. Dave, welcome to Fear and Greed.

Thank you, Sean, appreciate it.

Thank you, Sean, appreciate it.

How do you tune out the noise in an investing environment as we have at the moment.

How do you tune out the noise in an investing environment as we have at the moment.

Well, that's probably the most important thing to do if you're going to be a successful investor, and that's one thing that we spend a lot of time on with our clients and with advisors that work with those clients. So you know, the real point is avoiding the noise, you know, avoiding the regular kind of short term kind of fluctuations and noise that come with the markets, and staying with a discipline, long term approach. We all have opinions, we're all human, we all listen to the news. I do too, but you know we always say, God forbid, we don't invest your money based upon those opinions. So the best thing to do is to step back, remove the emotion, remove the fear, remove the greed, and try to stay with your long term investment policy statement that was set up by you and your advisor.

Well, that's probably the most important thing to do if you're going to be a successful investor, and that's one thing that we spend a lot of time on with our clients and with advisors that work with those clients. So you know, the real point is avoiding the noise, you know, avoiding the regular kind of short term kind of fluctuations and noise that come with the markets, and staying with a discipline, long term approach. We all have opinions, we're all human, we all listen to the news. I do too, but you know we always say, God forbid, we don't invest your money based upon those opinions. So the best thing to do is to step back, remove the emotion, remove the fear, remove the greed, and try to stay with your long term investment policy statement that was set up by you and your advisor.

Okay, but is there some noise you should listen to?

Okay, but is there some noise you should listen to?

There's always noise, you know. I think everybody likes to hear news and stories and information. We always like to also think about you know, if you you've got a specultive part of your portfolio, you've got an investment part. So probably ninety ninety five percent of your portfolio for most people is going to be an investment and five to ten percent is speculative. So if you really feel you need to scratch that itch and need to do something about the noise and about the information of the day, you know, do that in your specultive portfolio, but don't speculate with your investment portfolio. That's the real key that we need to make sure investors understand.

There's always noise, you know. I think everybody likes to hear news and stories and information. We always like to also think about you know, if you you've got a specultive part of your portfolio, you've got an investment part. So probably ninety ninety five percent of your portfolio for most people is going to be an investment and five to ten percent is speculative. So if you really feel you need to scratch that itch and need to do something about the noise and about the information of the day, you know, do that in your specultive portfolio, but don't speculate with your investment portfolio. That's the real key that we need to make sure investors understand.

Now, I have been a journalist for about thirty years and no one has actually put it to me that way. That's a great way thinking about it. So it's your investment portfolio and kind of makes intuitive sense obviously, but it kind of makes sense to play the market because it's almost impossible to tune out the noise. Totally.

Now, I have been a journalist for about thirty years and no one has actually put it to me that way. That's a great way thinking about it. So it's your investment portfolio and kind of makes intuitive sense obviously, but it kind of makes sense to play the market because it's almost impossible to tune out the noise. Totally.

Yeah, totally. People are human, you know, we all have those emotions. We all think about, you know, the market, the headlines or whatever you're going to see. But sometimes it's easier just to say there's going to be a portion of my portfolio. Like when I go to Las Vegas and go bet or gamble, I'm not going to gamble my entire net worth. I'm going to gamble some portion of it. And that's what you need to make a decision on before you start doing it. And oftentimes it keeps people's eyes off the prize, which is really the investment side of the portfolio, allows them to do something, allows them to be active, allows them to have some fun allows them to have cocktail party conversations, but they're not doing that with the ninety five percent of portfolios on the investment side.

Yeah, totally. People are human, you know, we all have those emotions. We all think about, you know, the market, the headlines or whatever you're going to see. But sometimes it's easier just to say there's going to be a portion of my portfolio. Like when I go to Las Vegas and go bet or gamble, I'm not going to gamble my entire net worth. I'm going to gamble some portion of it. And that's what you need to make a decision on before you start doing it. And oftentimes it keeps people's eyes off the prize, which is really the investment side of the portfolio, allows them to do something, allows them to be active, allows them to have some fun allows them to have cocktail party conversations, but they're not doing that with the ninety five percent of portfolios on the investment side.

I mean, I want to come to your former career in a little bit, but you've been in this industry for thirty plast years? Am I right in saying them correct? How important is financial advice?

I mean, I want to come to your former career in a little bit, but you've been in this industry for thirty plast years? Am I right in saying them correct? How important is financial advice?

It's extremely important. I have a financial advisor, and I've had one for twenty eight years, and that person is somebody who not only provides the knowledge around a lot of the wealth management aspects of state planning and tax planning and charitable giving and so forth, but he also is just a friend. He knows my family, he knows my kids, he knows how I think, he knows my wife's emotions around investments and money. It's just a nice sounding board for us to have and it's a really important part of our family dynamic. At this point. Didn't know he has access to our dreams, our financial dreams, and that's a really important role to play as an advisor.

It's extremely important. I have a financial advisor, and I've had one for twenty eight years, and that person is somebody who not only provides the knowledge around a lot of the wealth management aspects of state planning and tax planning and charitable giving and so forth, but he also is just a friend. He knows my family, he knows my kids, he knows how I think, he knows my wife's emotions around investments and money. It's just a nice sounding board for us to have and it's a really important part of our family dynamic. At this point. Didn't know he has access to our dreams, our financial dreams, and that's a really important role to play as an advisor.

And in times like this, is his advice similar to yours?

And in times like this, is his advice similar to yours?

It is. Yeah, he's aligned. We think in the same ways, but again, we don't speak on a regular basis about the tariffs, about Donald Trump. I mean, we think about you know what, we set up probably five to ten to fifteen to twenty years ago, and we're looking out five to ten to fifteen to twenty years. So today's movement, in today's activity in the stock market, today's headlines are nothing that I would invest upon. I'm certainly going to be aware of it. I'm going to have an opinion on it, but I'm not going to and he's not going to change my investment portfolio in any way. Due to the noise of the day.

It is. Yeah, he's aligned. We think in the same ways, but again, we don't speak on a regular basis about the tariffs, about Donald Trump. I mean, we think about you know what, we set up probably five to ten to fifteen to twenty years ago, and we're looking out five to ten to fifteen to twenty years. So today's movement, in today's activity in the stock market, today's headlines are nothing that I would invest upon. I'm certainly going to be aware of it. I'm going to have an opinion on it, but I'm not going to and he's not going to change my investment portfolio in any way. Due to the noise of the day.

I'm never quite sure what dimensional, to be honest, whether you're passive or active, and I know I should know that, but it depends who who you read, whether you're passive reactive. Yeah, good investors, A great question.

I'm never quite sure what dimensional, to be honest, whether you're passive or active, and I know I should know that, but it depends who who you read, whether you're passive reactive. Yeah, good investors, A great question.

I mean, David Booth, our founder says, you can call us pact, passive or active just if you As long as you call us, it's fine.

I mean, David Booth, our founder says, you can call us pact, passive or active just if you As long as you call us, it's fine.

And that's very But my question actually comes to, is now the time to be a passive investor though simply because he can tune out the noise, or is now exactly the time to be an active investor?

And that's very But my question actually comes to, is now the time to be a passive investor though simply because he can tune out the noise, or is now exactly the time to be an active investor?

It's always a good time to be a passive investor. And when I describe a passive investor, you know, you start with some really basic fundamentals in the capital markets. One is you want to be diversified yep. Two you want to have your cost below and three you want to believe that the markets work and the markets function properly so that the price that you see in the market is the price is a pretty good predictor of actual price. And that's kind of the market efficiency hypothesis we talk about quite often. But the important point is you start with those foundational theories. I mentioned a story this morning about Martin Miller, who is a finite Nobel Prize winner and on our board of directors. In my first interview at Dimensional thirty years ago, he said, you know, you just need to know three things to be a successful investor. One is diversification as your buddy, two cost matter in three markets work. He says, if you can get those three things in your head, you're going to be in a pretty good position to have a good successful investment experience. And that's been very very true.

It's always a good time to be a passive investor. And when I describe a passive investor, you know, you start with some really basic fundamentals in the capital markets. One is you want to be diversified yep. Two you want to have your cost below and three you want to believe that the markets work and the markets function properly so that the price that you see in the market is the price is a pretty good predictor of actual price. And that's kind of the market efficiency hypothesis we talk about quite often. But the important point is you start with those foundational theories. I mentioned a story this morning about Martin Miller, who is a finite Nobel Prize winner and on our board of directors. In my first interview at Dimensional thirty years ago, he said, you know, you just need to know three things to be a successful investor. One is diversification as your buddy, two cost matter in three markets work. He says, if you can get those three things in your head, you're going to be in a pretty good position to have a good successful investment experience. And that's been very very true.

Stay with me, Dive. We will be back in a minute. My guest this morning is Dave Butlck. How Cel of Dimensional Fund Advisors. Before the break, you were telling us about the three things you learned on your first interview prior to starting Dimensional that you. I mean, you've very successful academically, but you're also drafted by the Boston Celtics. Correct.

Stay with me, Dive. We will be back in a minute. My guest this morning is Dave Butlck. How Cel of Dimensional Fund Advisors. Before the break, you were telling us about the three things you learned on your first interview prior to starting Dimensional that you. I mean, you've very successful academically, but you're also drafted by the Boston Celtics. Correct.

Yeah, I was drafted by the Celtics in nineteen eighty seven. So Larry Bird and Bill Wlattin and Perish and McHale, all those guys were on that team at the time.

Yeah, I was drafted by the Celtics in nineteen eighty seven. So Larry Bird and Bill Wlattin and Perish and McHale, all those guys were on that team at the time.

What sort of buzz is that to not just get drafted but with sort of people who are legends.

What sort of buzz is that to not just get drafted but with sort of people who are legends.

Yeah, So being drafted by the Celtics has been a lot of fun. So for me for the last thirty years, being able to say I was drafted by the Celtics was fun. I wasn't in the league of those guys. I was a good player, not a great player. The year that I got drafted, they had a strike, so I didn't even get a chance to try out with the Celtics. I went right overseas. I went to Istanbul, Turkey for my first year, playing in Tokyo, Japan my next year, turned down an offer in Sydney, Australia for one year and ended up playing in England my last year, and that was about the end of my career.

Yeah, So being drafted by the Celtics has been a lot of fun. So for me for the last thirty years, being able to say I was drafted by the Celtics was fun. I wasn't in the league of those guys. I was a good player, not a great player. The year that I got drafted, they had a strike, so I didn't even get a chance to try out with the Celtics. I went right overseas. I went to Istanbul, Turkey for my first year, playing in Tokyo, Japan my next year, turned down an offer in Sydney, Australia for one year and ended up playing in England my last year, and that was about the end of my career.

I like talking to people who have been successful in sport and then bringing into business because often there are disciplines in both that seem to suit investing, particularly because you have to be extremely disciplined to be a successful sports person and extremely disciplined to be a successful investor.

I like talking to people who have been successful in sport and then bringing into business because often there are disciplines in both that seem to suit investing, particularly because you have to be extremely disciplined to be a successful sports person and extremely disciplined to be a successful investor.

Absolutely, I think you all the I guess learnings apply in both sports and investments and in the firm. You know, when we think about our mission, we think about culture, we think about collaboration. You know, all those things are things I knew and loved in the sporting world, and now I bring those back to my corporate life now, which is really important. Any successful entity is going to have to have those ingredients to be really good and be a place where people want to be involved, They want to be participating, and they want to be excited about what they do on a regular basis.

Absolutely, I think you all the I guess learnings apply in both sports and investments and in the firm. You know, when we think about our mission, we think about culture, we think about collaboration. You know, all those things are things I knew and loved in the sporting world, and now I bring those back to my corporate life now, which is really important. Any successful entity is going to have to have those ingredients to be really good and be a place where people want to be involved, They want to be participating, and they want to be excited about what they do on a regular basis.

Culture matters in both absolutely. Okay, which is more fun? I think you just answered it there.

Culture matters in both absolutely. Okay, which is more fun? I think you just answered it there.

You go, Well, sports you have a little bit of an outlet. You have that physical outlet, right, and sometimes it's it's fun to be able to go one on one and see who wins. And oftentimes in business you have a lot of different kind of components that actually come into play and in a discussion. But it makes it a more challenging environment and one that keeps your interest. For sure.

You go, Well, sports you have a little bit of an outlet. You have that physical outlet, right, and sometimes it's it's fun to be able to go one on one and see who wins. And oftentimes in business you have a lot of different kind of components that actually come into play and in a discussion. But it makes it a more challenging environment and one that keeps your interest. For sure.

You're in Australia for three or four days, why and I know you have an office in Sydney. Why Australia. So I often think it's interesting that really big global managers come to the Australian market, which it has a massive superannuation pool. That's very attractive, I'm sure, but at the end of the day, we're not a massive market.

You're in Australia for three or four days, why and I know you have an office in Sydney. Why Australia. So I often think it's interesting that really big global managers come to the Australian market, which it has a massive superannuation pool. That's very attractive, I'm sure, but at the end of the day, we're not a massive market.

Yeah, it's an important market. And I think Americans love love Australia anyway, and they love being down here. And and I think it's uh, you know when you think about our mission a Dimensional you know, started out as a capital market mission. So all the academics for the night teen sixties looked at stock market data, they looked at active management performance. They looked over the last fifty sixty years and said active managers don't add value above and beyond chance. So that led to the indexing movement in nineteen seventies, and then nineteen eighty one is when Dimensional was launched, so we've been doing that for fifty years. We have a long, long track record. We think it's a track record that's important for Australian investors to have access to. And secondly, we have this advisor component which we started working with advisors back in nineteen eighty nine in the US, and we think the independent advisor who's working on behalf of the client and working as a fiduciary. We think that model is really really important for clients to have a great investment experience. So we sort of separate out the expertise. Dimensional is the capital market expert. Advisor is a client expert. The combination we think is going to give the client the greatest chance that a great investment experience, and we think that can happen in the US, it happens in Australia. We have offices in London and Tokyo and all over the world, so we think it's important for investors to get that kind of experience.

Yeah, it's an important market. And I think Americans love love Australia anyway, and they love being down here. And and I think it's uh, you know when you think about our mission a Dimensional you know, started out as a capital market mission. So all the academics for the night teen sixties looked at stock market data, they looked at active management performance. They looked over the last fifty sixty years and said active managers don't add value above and beyond chance. So that led to the indexing movement in nineteen seventies, and then nineteen eighty one is when Dimensional was launched, so we've been doing that for fifty years. We have a long, long track record. We think it's a track record that's important for Australian investors to have access to. And secondly, we have this advisor component which we started working with advisors back in nineteen eighty nine in the US, and we think the independent advisor who's working on behalf of the client and working as a fiduciary. We think that model is really really important for clients to have a great investment experience. So we sort of separate out the expertise. Dimensional is the capital market expert. Advisor is a client expert. The combination we think is going to give the client the greatest chance that a great investment experience, and we think that can happen in the US, it happens in Australia. We have offices in London and Tokyo and all over the world, so we think it's important for investors to get that kind of experience.

In that word, fantastic, Dave, thank you for talking to Fear and Greed.

In that word, fantastic, Dave, thank you for talking to Fear and Greed.

Thank you.

Thank you.

It was Dave Butler, co CEO of Dimensional Fund Advisors. This is a Fear and Greed business interview. Remember This is general information only, and you should seek professional advice for investing. Join us every morning for the full episode of Fear and Greed. Daily Business us but people who make their own decisions. I'm Jane elma Enjoy your day.

It was Dave Butler, co CEO of Dimensional Fund Advisors. This is a Fear and Greed business interview. Remember This is general information only, and you should seek professional advice for investing. Join us every morning for the full episode of Fear and Greed. Daily Business us but people who make their own decisions. I'm Jane elma Enjoy your day.