At Index Fund Advisors, we tend to attract a different clientele to most advice firms. IFA clients, generally speaking, are intellectually curious. Many have an academic or scientific background. A large proportion of them work, or used to work, in professions such as engineering that place great emphasis on data and statistical rigor.

While IFA's approach may appeal to those valuing data-driven, evidence-based strategies, these principles are broadly accessible to clients of all backgrounds and investment goals. Stilll, we make no apologies for creating content that specifically appeals to that demographic. Most firms cater to those who have no particular interest in finance or investing and are happy to trust advisors who appear to have all the answers. Our articles, charts and videos, on the other hand, are aimed at inquiring minds — people who insist on peer-reviewed, time-tested that a strategy a firm is recommending actually works before deciding to work with them.

That's why we were greatly honored when, in 2023, our founder, Mark Hebner, was asked to contribute a landmark documentary about the evolution of academic finance. The film is called Tune Out the Noise, and it's produced by the highly acclaimed film-maker Errol Morris, best known for The Thin Blue Line, and for The Fog of War, which won the Academy Award for best documentary feature in 2004.

Tune Out the Noise tells the story of a group of academics in the 1950s and 1960s whose ground-breaking research challenged Wall Street's status quo and was used by firms like Dimensional Fund Advisors to disrupt traditional methods of investing, ultimately reshaping the way the world views markets.

The dawn of the computer age, says Morris, saw "as great a revolution in finance as the one in science during the early Renaissance," resulting in the "realization that the markets themselves might be a real-world computer, with investors playing the role of processors."

Investing is a Science

Central to the film is the message that successful investing is not about forecasts, opinions or guesswork — it's actually a science.

"People are always hoping that scientists will reveal to them the true meaning of things," Errol Morris writes. "But even if science takes us deeper into the behavior of the world around us, it does not reveal deeper meaning. Why do things behave the way they do? Why do certain phenomena commandeer our attention, directing it to hidden patterns cloaked in the ubiquity of noise?

"We're trying to discover a reality beyond what is manifest. We're learning to look at the world in a different way than the familiar or the expected — realizing that subtle shapes and strange forms can often reveal something new and unexpected. Art and science show us that there is often something beyond our ken, beyond our reach. Ironically, modern finance doesn't tell us about what will happen next. It takes us into that mystery."

In the film, Mark Hebner explains how his own scientific background and instincts led him to discover Dimensional, and how the stories of Dimensional and IFA are inextricably linked; you'll find his contribution at around one hour and 11 minutes.

Other key contributors include:

• David Booth, the founder and chairman of Dimensional Fund Advisors, after whom the Chicago School of business is named;
• Rex Sinquefield, who played a key role in developing index funds by co-founding the first S&P 500 index fund for institutional investors in 1973;
• Eugene Fama, the Nobel Prize-winning economist whose development of the Efficient Market Hypothesis changed our understanding of how markets work;
• Robert Merton, another Nobel laureate, whose work on continuous-time finance influenced modern portfolio theory and risk assessment;
• Ken French, best known for developing, with Eugene Fama, the hugely influential Fama-French Three-Factor Model; and
• John "Mac" McQuown, who was a pioneer of index investing and quantitative finance at Wells Fargo in the early 1970s.

 

An Extraordinary Story

We cannot recommend Tune Out the Noise highly enough. If you haven't yet discovered Dimensional Fund Advisors or evidence-based investing, it could be one of the most valuable documentaries you will ever watch.

Even if you're an existing IFA client, or you're already familiar with our investment philosophy, you will still find it an absorbing watch. Fundamentally, Tune Out the Noise tells a remarkable story — the story of how investing changed forever and also, unquestionably, for the better.

Watch and enjoy the film here:

Tune Out the Noise

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Robin Powell is the Creative Director at Index Fund Advisors (IFA).  He is also a financial journalist and the editor of The Evidence-Based Investor. This article reflects IFA's investment philosophy and is intended for informational purposes only. 

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The mention of individuals, organizations, or external content (such as the documentary Tune Out the Noise)  is solely for informational and illustrative purposes. References to Nobel laureates, Dimensional Fund Advisors, and other entities or contributors do not represent endorsements or guarantees of Index Fund Advisors (IFA), its services, or its investment approach. Any views expressed by third parties in this film are their own and should not be construed as Endorsements of IFA or as reflective of IFA's opinions or affiliations unless explicitly stated.

This article is intended for informational purposes only and reflects the perspective of Index Fund Advisors (IFA), with which the author is affiliated. It should not be interpreted as an offer, solicitation, recommendation, or endorsement of any specific security, product, or service. Readers are encouraged to consult with a qualified Investment Advisor for personalized guidance. While academic research provides evidence-based insights into investment strategies, all investing involves inherent risks, and results cannot be guaranteed.  Quotes and images included are for illustrative purposes only and should not be considered as endorsements, recommendations, or guarantees of any particular financial product, service, or advisor. IFA does not endorse or guarantee the accuracy of third-party content. For additional information about Index Fund Advisors, Inc., please review our brochure at https://www.adviserinfo.sec.gov/ or visit our website at www.ifa.com.

Tune Out the Noise is a documentary film produced by Julie Ahlberg and Robert Fernandez, directed by Errol Morris, presented by Dimensional Fund Advisors (DFA), and is currently streaming on YouTube. The YouTube version is embedded on this website for informational purposes only. Index Fund Advisors, Inc. (IFA) is not affiliated with DFA, and the inclusion of this video does not constitute an endorsement of DFA, its products, or its services by IFA. Similarly, the appearance of any individuals, including David Booth or other notable figures, in this film does not indicate an endorsement of IFA, Mark Hebner, or any particular investment product, strategy, or advisor. DFA sponsors events by IFA, invites employees of IFA to participate in conferences hosted by DFA and refers clients to IFA in accordance with the standard terms of DFA's referral program. DFA reimbursed Mark Hebner's actual lodging and travel expenses to participate in the film but did not compensated him for his participation in the film. The content of this film is intended to explain how academics at the University of Chicago in the 1960s created groundbreaking research that was used by firms like Dimensional Fund Advisors to change traditional methods of investing.  It should not be construed as investment, legal, or tax advice. All investments involve risks, including the loss of principal. Past performance is not indicative of future results, and there is no guarantee that any investment strategy, including indexing, will be successful. This film is presented here with permission from Dimensional Fund Advisors. No further republication, redistribution, or modification of this content is permitted without the express written consent of DFA. Viewers are encouraged to use the pause button to read any important disclosures presented during the film and in the credits.