SENATOR WILLIAM( BILL) W. BRADLEY
Managing Director, Allen & Company and Former Senator, New Jersey
I always thought that a career in public service required a sense of purpose. You’ re there to make lives better for people and solve problems for others, not for yourself. And I want to say that to me, one of the ways that you express opportunity or create opportunity for others is through innovation. And when you combine purpose and innovation, you create conditions for real change.
David Booth’ s whole career is a perfect example of that. Purpose and innovation. His entire life has been informed by values. He grew up in a small town in Kansas. He’ s never forgotten where he came from or who he’ s seeking to serve— to help families save money to buy their first home or send their kid to college or have a good retirement. David attended two great higher education institutions, the University of Kansas and the University of Chicago, to which he’ s been unfailingly generous, year after year.
And David’ s first class at the University of Chicago was with a legendary economist, Gene Fama. He walked in on the first day and Fama said,“ This is going to be the most practical course you ever will take.” That was an understatement. David quickly realized he was at the center of pioneering research and scientific breakthroughs that would transform investing in the financial industry. Students and professors were working together, testing new ideas, using computers, modeling the markets and trying to be able to understand at a deeper level what markets were all about. When David graduated, he went to work for an index fund— one of the first index funds— and then started his own firm, Dimensional, a purpose-driven investment manager rooted in academic insights and service to clients.
From his Brooklyn apartment, David helped blaze the trail for a better way to invest, an approach based upon low costs, broad diversification, robust risk controls and the latest academic research. Forty-five years later, Dimensional manages over $ 1 trillion from clients around the world. David and his firm continue to innovate on behalf of investors, and they
continue to demystify investing so more people can benefit from the power of markets. So I’ m pleased that the Museum of American Finance is recognizing David with the Financial Innovation Award, because he truly has had an outsized impact on the financial industry and investors around the world. And beyond that, David is smart, humble, generous, an astute observer and a thoughtful friend.
A few years ago, we established the annual ritual of going to one Final Four game. We both like basketball, and I forget what city it was, but we got to the game. We always like to get there early while they’ re warming up. And, so, we got there early and two sections over there was a guy and he started pointing at us. And then he started walking toward us. And I thought to myself,“ Oh, another Knicks fan.” And he was walking toward us, and then I could hear what he was saying. He said,“ David Booth, David Booth, you changed my life. You changed my life.” Well, I could only smile because it was so powerful and so true. David has changed a lot of lives. He’ s led a life of purpose, and we’ re all better for his visionary leadership and his unwavering commitment to employees, clients, investors and the investing public generally.
DAVID G. BOOTH
Founder & Chairman, Dimensional Fund Advisors
Thank you for the kind words. You really are an inspiration to all of us. And of course, special thanks to the Museum of American Finance for giving me this award. Their mission is incredibly important. The idea of financial literacy and the history of finance can really improve people’ s lives.
I’ d like to talk tonight about one aspect of it, which is the public finance markets. I grew up in Kansas with Depression-era parents. They didn’ t trust markets, so they never really invested. They viewed themselves as outsiders, and they felt that insiders were the ones that made all the money and would take advantage of them, so they never invested. And that’ s unfortunate, because if they’ d understood better about stock and bond markets, they could have invested and lived a little easier in retirement. Here’ s what they were missing: Public stock and bond markets perform pretty much like we hoped they would.
Stocks have higher average returns than bonds and bonds have higher average returns than inflation, and so on. And this gives us trust in the power of public markets. Best of all, you don’ t have to be an insider to get those returns. These days, everyone can get stock and bond market returns through low-cost market portfolios like index funds, which can be purchased very easily. In essence, the markets work, giving fair returns for risks taken. Of course, this applies to the total stock and bond markets and not to individual stocks and bonds. If people better understood how markets work, they would be more likely to invest and stay invested.
Unfortunately, my parents only had a few years in retirement. And when they passed away in 1985, my brother and sister and I went to the bank and opened their safety deposit box. What we found in there was really amazing. $ 15,000 in cash. That represented a huge fraction of the total value of their estate. And it makes you sad that they worked so hard for that money and then just left it in the safety deposit box.
So, unfortunately, they never had a program of investing in public markets. If they had invested $ 15,000 when my dad got back from World War II in 1945 and got the stock market return, by 1985— 40 years later— it would have been worth more than a million dollars. That’ s the magic of compounding at over 11 % a year. Now it’ s been my experience that the benefits of compounding are not well understood by many. I mean, those of us in the business, it’ s kind of automatic, but particularly in today’ s environment where you have so much day trading and betting on various markets, people lose sight of the benefits of compounding. Einstein said compounding is the eighth wonder of the world, and it really is.
And if you think that 40-year period we’ re talking about is unique, think again. If we’ d taken that $ 15,000 that was in the safety deposit box and invested it for the next 40 years through 2025 and got the stock market returns, it would have gotten to a million dollars again. So here you have back-to-back 40-year periods. And then if you extend the data, going back to 1926, you have 100 years of good returns.
So compounding truly is the way to make a lot of money, but you have to stay invested if you’ re going to be assured of the long-term returns that we’ re talking
30 FINANCIAL HISTORY | Spring / Summer 2026 | www. MoAF. org