Dimensional’s Co-Founder to Retire This Year

Rex Sinquefield, one of the fathers of so-called passive or index stock market investing, said Thursday that he would retire at year’s end from Dimensional Fund Advisors Inc., his Santa Monica-based investment firm.

Sinquefield, 60, said he wanted to spend more time on his 1,000-acre farm in Missouri and also planned to found an economic think tank. His wife, Jeanne Sinquefield, 58, who supervises Dimensional’s trading, also plans to step down.

David Booth, 58, who co-founded Dimensional in 1981 with Sinquefield and has been co-chairman of the $70-billion-asset firm with him, would become sole chairman.

Sinquefield was a pioneer in the 1970s of the idea that investors would be better off investing broadly in the market, such as by owning all of the shares in major indexes, than by trying to pick individual winners. That is the crux of the “efficient market” theory and is the basis for how Dimensional manages money for clients worldwide.

Sinquefield and Roger Ibbotson, a Yale University finance professor, also coauthored the studies that formed the basis for one of the investing profession’s bibles: the “Stocks, Bonds, Bills and Inflation” statistical reference, an annually updated guide showing long-term financial market returns.

Sinquefield said he would retain his ownership stake in Dimensional and his board seat.