There are roughly 200,000 advisors in the US. How does an investor choose one?

David Booth, the founder of Dimensional Fund Advisors, says, “trust the advisor who trusts the market.”

See his memo here.

This year, I’m grateful for Diversification. Diversification is the only free lunch in investing. Let me repeat that. Diversification is the only free lunch in investing. As an investor, it allows you to dramatically reduce the range of possible outcomes in your investment portfolio, thereby making it easier to reach your financial goals. The range of performance of individual US companies this year was extremely wide and volatile. Think of it as a roller coaster with huge and frequent ups and downs. By diversifying, you were able to avoid some possible very negative outcomes. The video below provides a nice visual of the performance of the S&P500 year-to-date and gives an example of how increasing diversification, in this case by adding in small-cap companies, can help smooth the ride.

Video created by Jan Varsava.

We can’t — and won’t try to — tell you what 2017 has in store for investors. But we can tell you that our approach to managing whatever does unfold remains the same. Here are a couple of inspirational quotes from other respected voices who share our perspective about the road ahead.

From Financial Author & Coach Nick Murray …

“The nature of successful investing, as we see it, is the practice of rationality under uncertainty. We’ll never have all the information we want, in terms of what’s about to happen, because we invest in and for an essentially unknowable future. Therefore we are dedicated to the principles of long-term investing that have most reliably yielded favorable long-term results over time: planning; a rational optimism based on experience; patience and discipline. These will continue to be the fundamental building blocks of our investment advice in 2017 and beyond.”

From Dimensional Fund Advisors’ paper, “Prediction Season” …

“In the end, the only certain prediction about markets is that the future will remain full of uncertainty. History has shown us, however, that through this uncertainty, markets have rewarded long-term investors who are able to stay the course.”