Perspectives on Market Volatility

Dimensional Fund Advisors thought leaders, David Booth, Eugene Fama and Kenneth French discuss their perspectives on market volatility and key principles that may help investors during periods of increased market volatility.


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.

[bs_lead]“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[/bs_lead]

[bs_lead]“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[/bs_lead]