In an age of meme stocks and get-rich-quick schemes, a documentary on evidence-based investing is captivating millions. Why? Tune Out the Noise is changing the conversation, and you need to tune in.
When it comes to captivating audiences, evidence-based investing doesn't exactly scream "blockbuster hit". Yet, something remarkable is happening. The release of the documentary Tune Out the Noise by Academy Award-winning filmmaker Errol Morris is giving this crucial topic its unexpected Hollywood moment. (1)
This isn't your typical Wall Street drama filled with high-stakes trades and scandalous behaviour. Instead, Tune Out the Noise charts the history of academic finance and the rise and development of passive and factor-based investing.
Even as someone deeply interested in this field, the film's success has surpassed my expectations. With more than seven million views on YouTube already in the US alone, Tune Out the Noise has clearly struck a chord.
A Remarkable Story
The film charts a revolution in finance: for centuries, the industry relied on intuition, lacking reliable ways to measure results. The rise of powerful computers enabled researchers to analyse stock market data, revealing fundamental truths: diversification reduces risk, and uncertainty creates opportunity.
The biggest revelation was that active management, with its stock picking and market timing, was a costly illusion, as active managers underperformed the market despite high fees, challenging the establishment's traditional approach.
Data showed that a diversified, long-term, total market strategy was far superior, inspiring trailblazing money managers like John McQuown, Rex Sinquefield, and David Booth to develop the first index fund for the institutional market in the early 1970s.
At the time, indexing was a leap of faith, but it delivered. It didn't try to beat the market (it wasn't designed to), but it consistently outperformed
conventional active management. It eventually empowered millions across the globe to achieve their financial goals.
Divided Opinions
I have to say, I love the film. The narrative of the first half is particularly compelling. Morris’s signature storytelling approach — featuring direct-to-camera interviews, archival footage and a compelling score — makes complex financial concepts accessible and engaging.
But Tune Out the Noise is not without its critics. Some have argued that the documentary blurs the line between informative filmmaking and corporate promotion, and they certainly have a point. The film was entirely financed by Dimensional Fund Advisors, and DFA, as a firm, is central to the film's narrative. One reviewer described it as "a world-class advertisement," highlighting the absence of counter-arguments or dissenting voices.
Again, I wouldn't disagree, although, in fairness, investors are bombarded by counter-arguments to the evidence-based approach in the financial media on a daily basis, which makes this film so refreshing.
Is Investing Really a Science?
Others have questioned the film's implication that investing really is a science. Respected commentators, including veteran investment author Larry Swedroe, argue that investing, unlike the natural sciences, is heavily influenced by unpredictable human behaviour, making it more akin to an art. (2) Even prominent academics like Gene Fama and Ken French hold differing views on this.
Ultimately, while acknowledging the significant human element, I believe that, done properly, investing does lean more towards science than art. Certainly, investors who think like scientists — who question assumptions, think critically and prioritise data and evidence — are likely to have greater success than those who don’t.
If this film encourages more investors worldwide to embrace a scientific approach, it will be a success.
Those who haven’t yet seen it shouldn’t have too long to wait. I’m told the film will be free to view on YouTube in the UK in the very near future.
This article is produced by us for Financial Advisers who may choose to share it with their clients. Timeline Planning and Timeline Portfolios do not offer direct-to-consumer products.
ROBIN POWELL is a freelance journalist and author and is editor of The Evidence-Based Investor.
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