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Episode 335 - "What About Warren Buffett?"

12 december 2024 · 1 uur 8 min
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What makes Warren Buffett's investment legacy so iconic, and how has his advice shaped the world of investing? In this episode, we delve into Warren Buffet's investment philosophy and the lessons he offers everyday investors. In our conversation, we unpack the impact of his investment strategies on the financial world, debunk common misconceptions, and discuss how his strategies have changed over time. We also examine the structural barriers to replicating his success, the complexities of scale and changing market dynamics, and the parallels between his approach and modern asset pricing models. Discover Warren Buffett's astonishing historical returns, his perspectives on diminishing returns for active managers, and the misunderstood nuances of his advice regarding index funds. Gain insight into academic research on Warren Buffett's success, his pragmatic view on cash holdings, and his opinion on the value of dividends for investors. Tune in to learn about the world's greatest investor and how you can apply his wisdom to your own portfolio! Lees meer

Key Points From This Episode:

(0:04:55) Warren Buffett's legacy and Berkshire Hathaway's performance history.

(0:13:04) The problem of diminishing returns to scale and finding skilled active managers.

(0:18:37) Reasons Buffett repeatedly advises most investors to choose low-cost index funds.

(0:23:14) Why identifying skilled managers before they outperform the market is impossible.

(0:30:15) Research explaining Buffett's success using multi-factor asset pricing models.

(0:35:30) Insight into why Berkshire Hathaway holds large cash reserves as part of its strategy.

(0:44:02) Buffett's views on dividends and why his focus remains on reinvestment.

(0:48:16) Why diversification concentration is a bad strategy and Buffett's investing superpower.

(0:57:07) Aftershow: Ben's experience of being on The Wealthy Barber podcast.

(0:58:07) Reviews and feedback from the episode with Randolph Cohen and Michael Green.

(1:04:58) Chang…
Episode 334 - Magnus Reitan: Managing (Significant) Family Wealth

5 december 2024 · 30 min
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How do you balance family values, evidence-based investing, and building long-term wealth? In this episode, we are joined by Magnus Reitan, CEO of Reitan Kapital, to discuss his evidence-based approach to wealth management. Reitan Kapital is a leading investment firm specializing in index fund strategies and innovative portfolio optimization techniques. Under his leadership, the firm has become a key player in the investment industry, known for its analytical approach and commitment to sustainable and effective financial solutions. In our conversation, we delve into the disciplined, evidence-based philosophy driving Reitan Kapital's investment strategy, the importance of simplicity in managing wealth, and the lessons he's learned as an investor and a leader. We also explore the nuances around managing family wealth, unpack the importance of aligning investment strategies with family and business goals, and uncover the influence of Norway's Sovereign Wealth Fund on Reitan Kapital's approach. Join us as we explore the intersection of finance, legacy, and innovation and learn why a low-cost, evidence-based investment strategy works with Magnus Reitan. Tune in now! Lees meer

Key Points From This Episode:

(0:03:27) The Reitan family's journey from a single grocery store to a multinational group.

(0:04:20) How Reitan Kapital fits into the broader Reitan Group and how it started.

(0:06:35) Discover how Reitan Kapital defines risk and the role of access liquidity.

(0:08:06) Magnus shares how he developed his personal investment philosophy.

(0:09:33) Hear how his personal interest in finance led to founding Reitan Kapital.

(0:11:24) Explore the differences between managing a business and a family portfolio.

(0:12:26) Why the company chose to hire a CIO who was not part of the Reitan family.

(0:13:59) Reitan Kapital's values: long-term perspective, diversification, liquidity, and low costs.

(0:17:37) Hear how the family decided on and agreed to the company's investment appro…
Episode 333 - The Presidential Puzzle: Trump's Win and Expected Stock Returns

28 november 2024 · 44 min
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What does Trump's re-election mean for the markets? In this episode, Ben and Mark explore The Presidential Puzzle, a phenomenon revealing that equity risk premiums have historically been higher under Democratic presidencies than Republican ones. With Trump returning to office as the 47th U.S. president, they examine how voter risk aversion shapes political outcomes and market expectations, offering surprising insights into this intriguing connection between politics and investing. They also delve into market timing pitfalls, the importance of diversification, and how financial advisors can help investors navigate emotionally charged decisions. To wrap up, Ben and Mark reflect on listener perspectives and explore the intriguing future of Bitcoin in finance. Tune in to learn what Trump's win means for expected stock returns and more! Lees meer

Key Points From This Episode:

(0:00:18) Mark and Ben's experiences at the Physician Financial Independence Conference.

(0:06:53) Republicans vs. Democrats: What the election results mean for the stock market.

(0:09:09) The Presidential Puzzle and how belief informs asset choices among voters.

(0:15:12) How risk aversion and the economy impact election outcomes and expected returns.

(0:20:08) What investors should and should not do with this information.

(0:24:38) The dangers of making financial decisions based on emotional predictions.

(0:30:02) Unpacking the relationship between global risk aversion and U.S. presidencies.

(0:31:20) Our aftershow segment: digging into recent reviews, the podcast topic puzzle, Ben's recent trip to Boston, and Bitcoin.

Links From Today's Episode:

Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRem…
Episode 332 - Randolph Cohen & Michael Green: How Concerned Should We Be About Index Funds?

21 november 2024 · 1 uur 58 min
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Are index funds a silent disruptor? Or are the concerns overblown? In this grab-your-popcorn episode, Michael Green returns to the show after his previous appearance elicited a wave of compelling feedback from listeners. These included very smart individuals in academia and practice who were interested in hearing a counter perspective. Joining Michael today for a lively debate is Randolph Cohen, Senior Lecturer of Entrepreneurial Management in the Finance Unit at Harvard Business School. In our conversation, Michael shares his deep concerns about how index funds and target-date funds might be distorting financial markets, honing in on the tension between market efficiency and price elasticity. Randolph counters with an academically grounded perspective, drawing on his PhD and years of research and teaching at one of the world's leading business schools. With Ben and Cameron moderating, the discussion explores both sides without reaching a definitive conclusion. Tune in to witness this spirited, nuanced exchange and decide where you stand! Lees meer

Key Points From This Episode:

(0:00:14) Introducing Michael Green, Randolph Cohen, and today's topics of debate.

(0:06:00) Defining passive investing, distinguishing between the two different meanings of "the rise of passive investing", and how much of the market is currently held by passive investors.

(0:12:53) Michael's concerns with the high levels of passive investing and Randy's response.

(0:20:55) Addressing the proliferation of target-date funds and their use in different scenarios.

(0:28:48) Debating risk in the market, raised valuations, and retirement savings diversification.

(0:42:22) A breakdown of the biggest thing Michael and Randy disagree on: how passive investing is impacting stock market valuations.

(0:57:06) Answering the question: does inelasticity rise with passive, and how does it shape the impact of active managers?

(01:06:14) Unpacking whether the rise of passive has made the markets more efficient…
Episode 331 - Cameron in Norway: The Indexing Revolution, and Key Lessons from Past Guests

14 november 2024 · 1 uur 1 min
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In today's episode, Cameron sits down with Mark McGrath to talk about his trip to Trondheim, Norway, the event he attended there, and his presentation in which he shared top lessons from prestigious Rational Reminder Podcast guests. Tuning in, you'll hear Cameron's top takeaways from conversations with Nobel laureate Eugene Fama and his collaborator Kenneth French, as well as Robert Merton, Antti Ilmanen, Professor Ludovic Phalippou, and more. We also delve into the changing industry trends regarding index investing and the many benefits that come with embracing it, including how it helps financial advisors better serve their clients. Stay tuned for our after-show section, where we discuss advice for new advisors, from developing a robust investment philosophy to building a network, along with insights to help consumers navigate the industry and much more. To learn all about Cameron's trip to Norway, top guest takeaways, and industry trends around index investing, be sure to tune in! Lees meer

Key Points From This Episode:

(0:01:13) An overview of today's episode and a discussion on industry trends.

(0:03:56) Our conversation with Håkon Kavli on managing Reitan Kapital.

(0:04:38) What it was like for Cameron to meet Håkon Kavli and Magnus Reitan in Norway.

(0:05:42) The excellent event in Trondheim, Norway, and their impressive lineup of speakers.

(0:08:56) Unpacking industry trends in index investing and why more people are embracing it.

(0:09:42) The light bulb moment for Mark and Cameron regarding index investing.

(0:19:07) Highlights from our interviews with Eugene Fama, Ken French, and Robert Merton.

(0:25:28) Dr. Annamaria Lusardi's insights and takeaways from our John Cochrane interview.

(0:29:05) Top lessons from our conversation with Antti Ilmanen on low-expected returns.

(0:30:58) Insights from talking with Professor Ludovic Phalippou about private equity.

(0:32:22) Closing thoughts on Cameron's presentation in Norway and index investing trends.

(0:39:…
Episode 330 - Davidson Heath: How Are Index Funds Affecting Financial Markets and Corporate Governance?

7 november 2024 · 44 min
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What happens when index investing dominates the market? In this episode, we're joined by Davidson Heath, Assistant Professor of Finance at the University of Utah David Eccles School of Business, to explore this question and its surprising answers. Davidson's research dives into the unintended impacts of passive investing, examining how it influences price stability, corporate governance, and even the way we define shareholder responsibility. He unpacks how index funds, while supporting price efficiency, may be weakening governance structures by reducing shareholder oversight, a shift that could have lasting effects on corporate accountability. We also discuss the promise and limitations of socially responsible investing (SRI), as Davidson introduces the term "impact washing" to describe how some SRI funds fail to achieve real change despite their green branding. In a forward-looking segment, Davidson shares insights on the collaboration between AI and human intelligence in finance, giving a reassuring perspective on the future of machine and human co-existence in complex decision-making. This episode is a must-listen for anyone curious about the hidden dynamics of passive investing and the evolving role of technology in finance! Lees meer

Key Points From This Episode:

(0:02:22) Davidson's paper On Index Investing; Why active managers are important to indexing.

(0:08:42) Conclusions on how index investing is affecting price efficiency.

(0:11:10) The role of shareholders in corporate governance.

(0:13:06) How the incentives of index funds to monitor portfolio firms differ from active funds.

(0:15:10) Measuring how well index or active funds are monitoring the companies they own.

(0:16:54) How the expense ratios of index funds affect their quality of monitoring.

(0:18:08) What shareholders can do to monitor and make themselves heard.
(0:20:31) How index fund ownership affects other firm-level governance issues.

(0:21:30) Recap and takeaways on index funds and the marke…
Episode 329 - Optimal Education Savings, Withdrawals, and Asset Allocation

31 oktober 2024 · 1 uur 22 min
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Unlocking the power of education savings is often a complex task, but with the right strategies, a Registered Education Savings Plan (RESP) can be a game-changer for Canadian families planning their children's future. In this episode, Ben Felix, Dan Bortolotti, and Mark McGrath take a deep dive into the mechanics of the RESP, covering everything from optimal contributions and grant maximization to tax-efficient withdrawals and asset allocation. They discuss critical factors like the Canada Learning Bond (CLB) for low-income families and the intricacies of group RESPs, noting how pooled plans, though easy to join, can financially penalize those who don't stay the course. With the RESP's unique 35-year lifespan and its flexible range of education options, this in-depth conversation brings clarity to a valuable tool often overshadowed by its complexity. Tune in to discover practical strategies that could transform how you fund education, optimize your investments, and make the most of Canada's RESP benefits. Lees meer

Key Points From This Episode:

(0:02:43) Purpose and structure of the RESP as a tool to fund post-secondary education.

(0:06:25) Insight and tips for how contribution limits and government matching grants work.

(0:07:13) How the CLB supports low-income families with up to $2,000 without contributions.

(0:10:13) Family RESPs, which allow multiple beneficiaries to share contributions and earnings.

(0:11:54) Distinguishing between Education Assistance Payments (EAP), Post-Secondary Education Payments (PSE), and their tax implications for beneficiaries.

(0:14:27) Front-loading versus annual contributions: optimal contribution strategies to maximize grants and investment growth.

(0:23:22) Tips for tax-efficient RESP withdrawals, especially if beneficiaries have other income.

(0:35:28) Education outside of Canada, over-contribution penalties, and other considerations.

(0:37:28) RESPs and estate planning, including naming a successor subscriber in your will.

(0…
Episode 328 - Prof. Stephen R. Foerster: Pursuing the Perfect Portfolio

24 oktober 2024 · 1 uur 10 min
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Have you ever wondered how the world's top financial thinkers shaped the way we invest today? In this episode, Ben and Cameron sit down with Professor Stephen Foerster from the Ivey Business School to explore the evolution of modern investing. As a distinguished financial expert and co-author of In Pursuit of the Perfect Portfolio, Professor Foerster dives into the groundbreaking work of financial pioneers like Harry Markowitz, Bill Sharpe, Gene Fama, and others, unpacking their remarkable contributions to portfolio management, risk assessment, and market efficiency as we know it today. Tuning in, you'll gain a deeper understanding of Markowitz's revolutionary diversification theory, Sharpe's introduction of beta as a risk measure, and Fama's Efficient Market Hypothesis, as well as each of their perspectives on the "perfect portfolio," tying together the history, theory, and practical application of modern investment strategies. Whether you're looking to sharpen your strategy or build your investment knowledge from the ground up, this conversation with Professor Foerster is packed with actionable takeaways and fascinating stories that could change the way you approach your financial future. Don't miss this opportunity to learn from the thought leaders who shaped the market! Lees meer

Key Points From This Episode:

(0:03:29) Contrasting the historical art of investing with the modern science of investing.

(0:04:44) Markowitz's diversification theory and the importance of balancing risk and return.

(0:09:39) Sharpe's capital asset pricing model (CAPM) and his contribution to measuring risk.

(0:16:13) Insight into Fama's Efficient Markets Hypothesis and the joint hypothesis problem.

(0:19:13) The rise of factor investing and the significance of Fama-French's three-factor model.

(0:23:26) Unpacking Shiller and Fama's main point of disagreement on bubbles.

(0:26:50) Bogle's perfect portfolio and persistence about the index fund, despite resistance.

(0:29:37) How the Black…
Episode 327 - Building Better Portfolios with Don Calcagni

17 oktober 2024 · 59 min
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What does it take to manage a $60 billion wealth management firm while keeping investment strategies grounded in scientific thinking? In this episode, we're joined by Don Calcagni, Chief Investment Officer at Mercer Advisors. Don chairs the firm's investment committee and provides guidance on mergers and acquisitions, investment integration, and long-term strategic planning. His expertise spans fiduciary oversight, portfolio management, private equity, and financial mathematics. In our conversation, we discuss how his firm constructs client portfolios, engages with academic and industry experts, and leverages a factor-based investment approach. He also explains the importance of having an investment philosophy rooted in fiduciary principles and delves into how Mercer Advisors manages fiduciary oversight for billions of dollars in assets across thousands of families. Explore the details of portfolio governance and the role of the firms's alternative investment platform space. Gain insights on value metrics, factor investing, and how Mercer works to provide a family-office experience for everyday clients. Tune in for a deep dive into portfolio construction and the evolving landscape of wealth management with Don Calcagni! Lees meer

Key Points From This Episode:

(0:05:22) Learn about Mercer Advisors and the range of services it has on offer.

(0:07:10) Unpack Mercer Advisors' approach and philosophy to portfolio construction.

(0:11:55) The Building Better Portfolio Summit and the purpose of the event.

(0:17:08) How the meetings are structured and the main takeaways from the last event.

(0:24:45) What topics cause extreme points of agreement and disagreement at the meetings.

(0:29:21) Find out how takeaways from the events are implemented into client portfolios.

(0:31:19) Mercer Advisors' recently launched alternative investment platform space.

(0:40:23) Don shares valuable recommendations and advice for the average investor.

(0:42:23) Aftershow: the controversy surroun…
Episode 326 - Dr. Sunil Wahal: Applying Financial Science

10 oktober 2024 · 1 uur 17 min
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What are the critical factors driving investment success? How can investors balance profitability and risk? In this episode, we sit down with Dr. Sunil Wahal, the Jack D. Furst Professor of Finance and Director of the Center for Responsible Investing at the W.P Carey School of Business at Arizona State University, to delve into the intricacies of financial science. With over 25 years of academic and practical experience, Dr. Wahal shares his unique perspective on factor investing, profitability premiums, and how to approach value investing in today's complex financial environment. He talks about the joint distribution of value and profitability, explains how profitability premiums work, and discusses the challenges faced when integrating academic research into practical investing strategies. Dr. Wahal also touches on common misconceptions in financial theory, the long-term benefits of maintaining a diversified investor base, and why understanding the nuances of financial risk is key to avoiding costly mistakes. Gain insights into building a successful investment portfolio grounded in the principles of financial science and how to avoid common pitfalls in factor investing. Join us to hear actionable strategies for balancing risk, understanding factors, and applying academic research to real-world scenarios with Dr. Sunil Wahal! Lees meer

Key Points From This Episode:

(0:04:15) Dr. Wahal's work on profitability, data sourcing challenges, and its significance.

(0:08:01) The impact of controlling the value of the profitability premium.

(0:10:08) Correlations between value and profitability and the benefits of "tilted" portfolios.

(0:14:48) Steps for unleveraged long-term investors to build profitable portfolios.

(0:17:27) How the joint distribution of value and profitability differs from a profitability screen.

(0:20:43) Approaches of large financial firms to implementing value and profitability in portfolios.

(0:24:41) Time horizons for tiled portfolios and their expect…
Episode 325: Addressing 200+ Comments on Renting vs. Owning a Home

3 oktober 2024 · 43 min
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There are many different considerations behind housing when you are in the position to choose between renting or buying. During this episode, hosted by Ben Felix and Dan Bortolotti, we address user questions and comments on homeownership, rentals, and the factors that may lead to choosing one over the other. We discuss what makes homeownership more attractive as your financial situation evolves, consider whether or not landlords are making money on their properties in 2024, and explore the explanations behind whether or not renters are less wealthy than owners. This conversation also touches on one of the most common misconceptions about housing, why it is untrue, and how to make this key decision of renting or buying based on both lifestyle and financial considerations and the difference in mindset between renters and buyers. Join us today to hear all this and more. Lees meer

Key Points From This Episode:

(0:02:06) Homeownership versus renting with renovations and rental evictions in mind.

(0:08:40) Understanding the risks and rewards associated with securitive tenure.

(0:10:09) Factors that may influence changing needs that may influence whether you rent or buy.

(0:15:58) Three factors that one user would include in an argument of renting versus buying.

(0:18:25) Addressing the idea that it is equally expensive for a family or landlord to own a home.

(0:21:00) How the cost of homeownership evolves with time and other factors.

(0:24:50) Why owning a home is not above and beyond better than renting or owning with a mortgage.

(0:27:50) Understanding factors beyond financial considerations when it comes to renting versus owning.

(0:34:10) The difference in mindset between homeowners and renters and the benefits of both.

(0:38:10) Why it is so beneficial to be open-minded and add to conversations rather than rejecting other people's ideas.

(0:40:25) Ben tells the story from the start of his career and Dan shares his experience of feedback on the Canadian Couch Potat…
Episode 324 - Dr. Bryan Taylor: Lessons from Market History (1600-2024)

26 september 2024 · 1 uur 4 min
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Have you ever wondered how financial markets performed centuries ago or how world events impacted stock prices? Today, we sit down with Dr. Bryan Taylor, President and Chief Economist at Global Financial Data, to unpack the world's fascinating financial history. Dr. Taylor is known for his extensive work in collecting and analyzing historical financial data that spans several centuries and his valuable knowledge of stock, bond, and commodity market trends, which led to the creation of Global Financial Data. In our conversation, Dr. Taylor shares insights from his extensive research, covering stock and bond returns from as far back as the 1600s. From the impact of the French Revolution on financial markets to the performance of commodities, Dr. Taylor provides a rare view of the long-term trends shaping today's financial decisions. Learn about the value of historical financial data, its importance for investment decision-making, and how long-term trends can provide insights into future market behaviour. We discuss the creation of Global Financial Data's extensive historical financial database, the challenges of gathering centuries-old data, and the long-term performance of stocks versus bonds. Explore the impact of major geopolitical events on financial markets, the importance of studying historical market trends for modern investment decisions, and how his data-driven research has been utilized. Join us as we delve into the world's financial history and its relevance to today's investment landscape with Dr. Bryan Taylor. Tune in now! Lees meer

Key Points From This Episode:

(0:03:41) Background about Global Financial Data, their data sources, and the challenges of collecting historical data.

(0:09:27) What he finds fascinating about historical data, who uses the database, and the role of historical data in financial decision-making.

(0:14:49) How stocks have performed relative to bonds throughout the financial records.

(0:17:34) Uncover the main historical factors that l…
Episode 323 - Renting Versus Buying a Home in Canada 2005-2024

19 september 2024 · 1 uur 19 min
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Is renting just "throwing money away," or could it be the smarter financial choice? In this episode, we dive deep into one of the most debated topics in personal finance: renting versus owning a home. In our conversation, we discuss the nuances of renting versus owning, the hidden costs of buying a home, and the importance of saving discipline. Tuning in, you'll discover how emotional biases may inflate real estate prices and how societal pressures influence housing decisions. Then, we shift our focus to a listener's question about interest rates and bonds. Dan explains how bond prices and yields work inversely and delves into the concept of bond duration. He also breaks down how long and short-term bonds react to interest rate changes and why the Bank of Canada's influence on bond markets may not always be straightforward. Join us as we investigate the pros and cons of renting versus buying and how to leverage bonds effectively in a dynamic interest rate environment! Lees meer

Key Points From This Episode:

(0:03:54) Exploring the common belief that owning a home is universally better.

(0:09:13) How buying and renting in Canada compares to other countries.

(0:10:58) Some of the inherent risks of renting versus buying in Canada.

(0:17:01) Methods to test how housing performed as an asset with examples.

(0:21:04) The importance of analyzing real data, and Ben presents his findings.

(0:31:03) How housing costs influence the financial outcome of renting versus owning.

(0:35:51) Ways that mortgages, housing costs, and forced savings affect wealth accumulation.

(0:47:34) Unpacking how maintenance costs serve as a proportion of the building value.

(0:52:45) Renting versus buying takeaways and the associated psychological factors.

(1:00:37) Dan's take on whether long-term bonds can take advantage of falling interest rates.

(1:10:55) Insight into how various market-driven factors influence the long-term return on bonds.

(1:13:30) Aftershow: final takeaways, catch-up, new…
Episode 322 - Prof. Marco Sammon: How are Passive Investors Affecting the Stock Market?

12 september 2024 · 1 uur 9 min
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Can we really understand the impact of passive ownership on the US market? Marco Sammon is an Assistant Professor in the Finance Unit at Harvard Business School. During this episode, he joins us to share deep insights into the complex and counter-intuitive nature of the index fund revolution. To kick off our conversation, we discuss some of the challenges associated with getting a true understanding of the scope of passive ownership across the US. Distinguishing between different approaches to investment, we begin to unpack Marco's paper with Alex Chinco, titled 'The Passive-Ownership Share Is Double What You Think It Is'. We touch on the relevance of Grossman Stiglitz in 2024, pricing and reconstitution, and the ins and outs of employee stock and compensation. Using the case studies of huge global firms, we consider how to best accommodate passive demand. Lastly, as an index investor who does not own index funds, Marco shares his opinion on whether index funds have had a net positive or negative impact on financial markets. Tune in today to get a more dynamic view of the complex world of index funding and investment. Lees meer

Key Points From This Episode:

(0:00:45) Index funds, index and passive investments, and why Professor Marco Sammon is perfectly positioned to unpack these concepts.

(0:03:36) The challenges of understanding just how big passive ownership is in the US market.

(0:08:16) Distinguishing between partial investment, direct investment and passive funds.

(0:10:14) Important concepts on the closing auction and which indexes Marco focuses on.

(0:15:50) Defining the Grossman-Stiglitz framework and its validity in 2024.

(0:20:36) Evolving ideas around pricing and reconstitution over time.

(0:23:05) Why indexing is a fixed-point problem and how to measure market efficiency.

(0:32:19) Nuances of security demands around indexing and how it differs from other investors.

(0:38:02) Employee compensation and reverse causality as illustrated by Marco's friend.
…
Episode 321 - Evidence in Practice with Håkon Kavli

5 september 2024 · 1 uur 36 min
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How can the Rational Reminder Podcast get even better? By bringing back one of its most beloved voices, Dan Bortolotti, also known as "The Spud." In this exciting episode, hosts Ben Felix, Cameron Passmore, and Mark McGrath announce that Dan, the mind behind the Canadian Couch Potato Podcast, will now be a regular guest, contributing segments like "Bad Investment Advice" or "Ask the Spud." Before Dan joins the conversation, we have an insightful discussion with Håkon Kavli, CIO of Reitan Kapital. Håkon shares how his team manages the wealth of one of Norway's most prominent families, comparable to Canada's Weston family. We discuss Reitan Kapital's evidence-based investing approach, their robust methods for overcoming portfolio optimization challenges, and much more. Håkon also sheds light on their upcoming investing conference in Norway, featuring speakers like our very own, Cameron Passmore, and Marcos López de Prado. Following this, Dan kicks off his return by dissecting an article that advocates going all-in on the QQQ ETF in an RRSP, exposing the dangers of such a concentrated and risky strategy. He contrasts this approach with the wisdom of diversifying across global markets, using examples like Vanguard's VEQT ETF, which offers exposure to over 13,000 stocks worldwide. Additionally, if you're a financial advisor interested in joining a planning-focused, fiduciary firm like PWL Capital, we encourage you to reach out. Our team is growing, and we're looking for like-minded individuals to join our mission. Tune in for a rich mix of expert advice, thoughtful discussions, and exciting announcements! Lees meer

Key Points From This Episode:

(0:00:28) Announcements: a new regular guest, PWL's call for like-minded advisors, and more.

(0:04:15) Introducing Håkon Kavli, the Reitan family, and the origins of Reitan Kapital.

(0:08:06) Reitan Kapital's investment philosophy and asset allocation strategy.

(0:10:29) The biggest differences between a Reitan Kapital portfolio and a…
Episode 320 - Kyla Scanlon: In This Economy?!

29 augustus 2024 · 54 min
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Have you ever wondered how vibes can shape the economy? Or how the economy differs from financial markets? Or even how meme stocks operate? In this episode, we dive into the intersection of economic theory, social media, and public sentiment with Kyla Scanlon, an insightful economic commentator known for her relatable approach to explaining complex economic concepts. Kyla is a prolific content creator and founder of the financial education company, Bread. She produces a weekly newsletter, informative YouTube videos, the Let's Appreciate Podcast, and (almost) daily short-form videos that break down complex economic concepts into engaging, bite-sized content. She's also the author of In This Economy?: How Money & Markets Really Work, an indispensable guide to the "mad math and terrible terminology" of economics. Join us as we explore her unique vibecession concept, discuss the impact of social media-driven market movements, examine the housing crisis through the lens of generational wealth transfer and zoning laws, and much more. As Kyla explains it, economics isn't just about numbers. It's about the stories we tell and how they influence the world around us. For a fun, fascinating, and highly accessible look at the state of the economy today, don't miss this conversation with one of the internet's favorite financial educators! Lees meer

Key Points From This Episode:

(0:03:19) Kyla's definition of economics, who the main players are, and how it's understood.

(0:05:04) How "vibes" influence the economy and intersect with economic theory and reality.

(0:07:07) Money, its impact on the economy, and whether GDP reflects economic health.

(0:09:45) Ways that expectations about inflation affect vibes in the economy.

(0:10:50) Kyla's take on housing, what people get wrong about it, and renting versus owning.

(0:15:16) Surprisingly simple reasons for the housing crisis in the US and beyond.

(0:17:48) Key distinctions between financial markets, the economy, and the stock market.…
Episode 319 - The Ultimate RRSP vs. TFSA Showdown

22 augustus 2024 · 1 uur
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Which account should you choose, a registered retirement savings plan (RRSP) or a Tax-free savings account (TFSA)? This is one of the most common decisions that Canadians must make when it comes to investing, but it will also elicit some of the most passionate responses. RRSPs especially get a lot of undue skepticism, with some even labelling it as a scam. Today we take a deep dive into both of these savings accounts, exploring the downsides and benefits of each, and how to decide which account is right for you based on your savings goals. With the help of Conquest Planning, a specialized, in-depth modelling tool, we look at a range of scenarios incorporating different variables, like income and family size, and break down our analysis regarding the RRSP vs. TFSA decision for each scenario. We discuss key factors to consider, including the basic personal amount tax credit, which allows RRSPs to act as a tax flow-through, and the guaranteed income supplement (GIS), which can impact retirement planning. Our conversation also examines how to approach family size and longevity, as RRSPs become more advantageous with longer lifespans. Join us today to learn about the benefits and flexibility of each of these accounts, the surprising ways RRSPs often outperform TFSAs, and find out which one is right for you! Lees meer

Key Points From This Episode:

(0:00:20) An introduction to the RRSP vs. TFSA debate.

(0:08:11) How we used the Conquest Planning tool and the scenarios we analyzed.

(0:10:34) Taxation and contribution considerations and strategies for RRSPs and TFSAs.

(0:20:11) An analysis of scenario one; $60,000 income and no children.
(0:22:38) Basic personal amount tax credit; how it allows RRSPs to act as a tax flow-through.

(0:27:20) The Guaranteed Income Supplement (GIS) and its impact on RRSP vs. TFSA analysis in different scenarios.

(0:36:16) How GIS is tied to Old Age Security (OAS) payments.

(0:41:12) An analysis of scenario two; a couple with two children, and the…
Episode 318 - Assia Billig: Is Canada Pension Plan (CPP) Sustainable?

15 augustus 2024 · 46 min
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If you're in the Canada Pension Plan (CPP), then you won't want to miss today's conversation with Canada's Chief Actuary, Assia Billig. Assia's knowledge of the CPP is extensive, having joined the Office of the Chief Actuary (OCA) in 2008, where she was involved in the preparation of statutory actuarial reports on the Canada Pension Plan and Old Age Security Program. She has served as Chief Actuary of the Government of Canada since 2019, and, before joining the OCA, she worked in private pension consulting. She is also a Fellow of the Society of Actuaries and the Canadian Institute of Actuaries. Assia joins us today for a deep dive into the most common questions about the Canada Pension Plan, from the inner workings of its financial components to the quality of governance that drives it. Discover the world-leading topics she and her team investigate, the immense power and research behind their analysis, and why the CPP is set to be sustainable for the next 75 years. We also discuss the concerns some people have about the CPP's longevity, before examining how the actuarial report on the sustainability of the CPP, conducted every three years, reliably addresses this. If today's conversation with Canada's chief actuary does not instill confidence and pride in Canada's investment in our collective retirement, then we don't know what will! Tune in, to hear all of Assia's keen insights and discover why she is unequivocally the best person to talk about the sustainability of the CPP. Lees meer

Key Points From This Episode:

(0:00:18) Introducing today's guest, Assia Billig and the Canada Pension Plan (CPP).

(0:04:53) What the main function of the Office of the Chief Actuary is.

(0:06:28) The independence of Assia's office and the work that they do.

(0:07:09) Unpacking the main purpose of the actuarial report on the Canada Pension Plan.

(0:09:22) Changes that the report triggers to contribution or benefit rates.

(0:13:04) Main revenue sources for the CPP and how base CPP benef…
Episode 317 - An Economist's Perspective on Capital Gains Taxes with Kevin Milligan

8 augustus 2024 · 1 uur 23 min
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Today, we sit down with Professor Kevin Milligan to unpack the recent capital gain changes and the complexities of the Canadian tax system. Kevin Milligan is a Professor of Economics at the Vancouver School of Economics, University of British Columbia. He holds positions as a Scholar-in-Residence at the C.D. Howe Institute and a Research Associate at the National Bureau of Economic Research. A two-time recipient of the Purvis Prize, Professor Milligan's work is recognized for its significant contributions to Canadian economic policy. His research focuses on public and labour economics, particularly concerning the economics of children and the elderly, along with tax and labour market policy issues. In our conversation, we dive deep into capital gains tax, the progressivity of the tax system, and the distribution of tax burdens among different income groups. We explore the intricate details of who bears the burden of corporate taxes, the impact of recent capital gains changes, and the intriguing relationship between income and longevity in Canada. Professor Milligan also shares insights from his research on longevity and the implications of tax policies on economic behaviour. Join us and uncover the truths about Canada's tax system, capital gains changes, and their profound impacts on Canadians. Tune in now! Lees meer

Key Points From This Episode:

(0:07:20) Background about Professor Milligan and an outline of today's topic.

(0:10:10) Complexities behind tax policy and recent capital gains changes in Canada.

(0:14:22) Distribution of tax rates in Canada and how progressive the tax system is.

(0:20:12) Analysis of how the Canadian tax system is applied to the top 1% of earners.

(0:22:28) The theory behind capital income and how it relates to personal income tax.

(0:26:40) Explanation of tax integration and how income tax accounts for corporate taxes.

(0:29:53) Impact of the capital gains tax changes and Canada's overall tax progressivity.

(0:40:55) How the new capital…
Episode 316 - Andrew Chen: "Is everything I was taught about cross-sectional asset pricing wrong?!"

1 augustus 2024 · 44 min
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Are you curious about the hidden factors driving your investment decisions? Today's guest is Andrew Chen, a Principal Economist at the Federal Reserve Board who focuses on monetary policy and financial stability. Published in leading journals, his research informs key policy decisions and helps shape the Federal Reserve's strategy for managing economic challenges effectively. In this episode, Andrew delves into the intricacies of meta-research and asset pricing, focusing on cross-sectional asset pricing predictors, replication, and out-of-sample performance in factor investing. We discuss the significance of open-source data and transparency, highlighting Andrew's creation of the Open Source Asset Pricing project, an indispensable and comprehensive dataset for asset pricing predictors. We also address the challenges of replicating financial studies, publication bias, data mining, and false discovery rates, with Andrew offering practical insights on how these factors impact financial research and investment decisions. For actionable insights that could refine your investment strategies and enhance your understanding of financial research, don't miss this fascinating conversation! Lees meer

Key Points From This Episode:

(0:03:43) What an asset pricing factor is and how it differs from a predictor.

(0:04:25) Three plausible explanations for why cross-sectional predictors exist.

(0:05:45) Insight into Andrew's Open Source Asset Pricing project and why it's so important.

(0:09:49) Where the results of his research diverge from other papers on the subject.

(0:11:42) How the returns on anomalies in his data sample change post-publication.

(0:12:33) Implications of this research for the "replication crisis" in cross-sectional asset pricing.

(0:14:14) Challenges of false discovery rates, publication bias, and out-of-sample returns.

(0:18:37) The effect of transaction costs on expected returns from factor investing.

(0:22:02) Problems with estimating factor expected returns …
Episode 315 - An Update from Avantis with Eduardo Repetto

25 juli 2024 · 59 min
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During this episode, we welcome back Eduardo Repetto, Chief Investment Officer of Avantis Investors. In his leadership capacity, he directs research design and the implementation of strategies and oversees the investment team and marketing initiatives. Our conversation kicks off with Edoardo's explanation of how Avantis systemizes active management before we dive into strategies for launching in Europe and beyond. He weighs in on the most significant capacity issues that people face today, offering solutions to tweak your approach. We touch on what makes Avantis strategies preferable for advisors and Eduardo shares his insights on the future of small-cap value strategies for emerging markets. We discuss short-term reversals, towing the line between growth and value and factors that should inform asset allocation before diving deeper into small-cap value in the US and Canada. Tune in today to hear more. Lees meer

Key Points From This Episode:

(0:05:51) What sets Avantis Investors apart from other investment firms.

(0:09:26) Five strategies for launching in Europe starting with free and equity UCITS.

(0:14:00) Accessing UCITS and adapting strategies in accordance with currencies, geographical regulations and restrictions.

(0:22:49) The most significant capacity issue: an inability to invest cashflows.

(0:27:59) Feedback from the advisor community on why they are choosing Avantis strategies.

(0:32:43) Eduardo's view on the future potential for the emerging markets small cap value strategy.

(0:35:58) Improvements and adaptations to portfolio implementation at Avantis since 2019.

(0:39:01) The controversial nature of short-term reversals and advice for investors thinking about growth and value.

(0:44:40) What should inform asset-allocation decision-making.

(0:45:46) The potential of expanding into a Canadian base.

(0:50:16) Mark's thoughts on small-cap value in the US and Canada.

Quotes:

"We have to adapt to the regulatory framework. But the strategies are the same.…
Episode 314 - Professor Valentin Haddad: How Competitive is the Stock Market?

18 juli 2024 · 1 uur 1 min
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In this episode, we sit down with Professor Valentin Haddad to unpack the intricacies of market elasticity, passive investing, and the dynamic nature of financial markets. Valentin is an Associate Professor of Finance at UCLA Anderson School of Management and a research fellow for the National Bureau of Economic Research's Asset Pricing Program. His research focuses on how financial institutions trade, and manage risk, and their impact on market prices and the broader economy. Notably, his work challenges traditional assumptions, such as the perceived safety of life insurance companies' investments in Treasuries. In our conversation, we delve into the impact of index funds on the market, stock market bubbles around the development of new technology, and the response of investment-grade corporate bonds to the COVID-19 crisis. Discover the definition of demand elasticity, strategic interaction, and how market elasticity has changed over time. Explore how he defines a market bubble, ways stock market bubbles are related to new technology, and how to measure the value of innovation. We also discuss the impact of COVID-19 on investment-grade corporate bonds, the Federal Reserve's response, the implications for bond safety, and much more. Tune in and join us as we uncover the mess of the market with Professor Valentin Haddad! Lees meer

Key Points From This Episode:

(0:03:10) The impact of passive investing on financial markets, what investors' demand elasticity is, and the role of index funds.

(0:06:07) Learn about strategic interactions, their influence on financial markets, and how they react to rising passive investing.

(0:10:10) Why active investors' options are limited in a passive investment landscape and how demand elasticities influence asset prices.

(0:13:05) How individual investor elasticities are related to aggregate market elasticity and the ways investor elasticity has changed.

(0:20:54) Large and small stock elasticity trends, the implications of his research …
Episode 313 - When Should You Hire a Financial Advisor?

11 juli 2024 · 39 min
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Low-cost index funds and digital tools have revolutionized wealth-building, making it easier than ever before to manage your own investment portfolio. However, additional support and expert advice can be critical to help you reach your financial goals, especially when facing complex financial decisions, feeling overwhelmed, or deciding to change your investment strategy. Today on the Rational Reminder Podcast, we discuss when it makes sense to hire a full-service financial advisor, whether or not every investor needs one, and how professional guidance can enhance your financial outcomes. You'll find out how delegating your financial decision-making can not only boost your wealth but also improve your wellbeing, increase your peace of mind, and mitigate the impact of cognitive decline on your financial decisions as you age, plus so much more. For valuable insights that could transform your financial future, tune in today! Lees meer

Key Points From This Episode:

(0:02:15) Why you would hire a financial advisor when DIY investing is so easy.

(0:06:35) The services that financial advisors offer and how you can benefit from them.

(0:10:09) What investor inertia is, how to overcome it, and what the trade-offs are.

(0:16:31) How delegating financial decision-making can improve wealth and wellbeing.

(0:18:16) Insight into the value of financial advice for retirement planning.

(0:22:17) Your Trusted Contact Person (TCP) and why they matter.

(0:23:05) Ways that financial literacy shapes demand and expectations for financial advice.

(0:24:21) Common reasons that people seek professional financial advice.

(0:26:22) How financial advisors act as a commitment device for good financial behaviours.

(0:27:47) Important considerations and questions to ask when hiring a financial advisor.

(0:32:43) Our after-show observations, feedback, banter, updates, and more!

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-po…
Episode 312 - Prof. John M. Griffin: Forensic Finance and the Power of Research

4 juli 2024 · 1 uur 3 min
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Discover the hidden underbelly of financial markets in today's episode featuring Professor John M. Griffin, a leading forensic finance expert and the James A. Elkins Centennial Chair in Finance at McCombs School of Business at the University of Texas at Austin. Tuning in, you'll learn how forensic finance exposes illicit activities in crypto markets, revealing how entities like Tether (a cryptocurrency pegged to the US dollar) facilitate scams and money laundering. We also delve into the disturbing world of pig butchering scams, which have stolen more than $75 billion from victims globally, and how the victims of these scams have helped John study the flow of illicit funds in crypto markets. Find out how John uncovered massive fraud in the Paycheck Protection Program during the COVID-19 pandemic, and how this exposed the central role of fintech lenders and social networks in spreading fraud. We also discuss the importance of rigorous academic research and its practical implications in uncovering financial fraud, emphasizing the need for robust oversight and transparency in both emerging and traditional financial systems. Tune in for a thought-provoking discussion that challenges established practices and calls for greater scrutiny in financial systems! Lees meer

Key Points From This Episode:

(0:05:23) An overview of John's research, the definition of forensic finance, and what sets forensic finance research apart from more traditional finance papers.

(0:09:55) The economics of pig butchering scams and how the victims of these scams help John study the flow of illicit funds in crypto markets.

(0:14:42) How crypto exchanges fail to monitor for potential scammer activity.

(0:18:44) The role of so-called legitimate crypto exchanges in criminal activity; why Tether (a cryptocurrency pegged to the US dollar) is the most important cryptocurrency in scam activity.

(0:21:43) Unpacking the $75 billion figure in John and Kevin Mei's paper on Pig Butchering and how it finances sla…
Episode 311 - Is Roaring Kitty a Good Role Model?

27 juni 2024 · 24 min
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When witnessing the dramatic payouts of miracle trades, it's easy to be lured into thinking that your big score is just a few trades away. But as is evident in trading options for retail investors, it is neither quick, simple, nor easy to make guaranteed returns on your investments. In today's episode, Ben and Cam walk us through the many reasons why trading options is a losers' game; especially for retail investors. Trading options is definitely today's hot topic and we unpack how the recent resurfacing of Roaring Kitty affirms how life-changing payouts are the exception rather than the rule. We dive deeper into trading options and their uses, the trading demographics of the current market, why trading options are an expensive choice for retail investors, and why people still choose to trade even when doing so at a loss. To end, Ben and Cam highlight the dangers of being a copycat and how social media adds fuel to the fire and we hear some heartwarming Rational Reminder Podcast reviews from a few of our dedicated listeners. Lees meer

Key Points From This Episode:

(0:00:48) Why today's topic is widely discussed in the current financial climate.

(0:03:34) What we can learn from the resurfacing of Roaring Kitty.

(0:05:35) A brief background on stock options and their various uses and the current state of retail trading.

(0:08:13) Understanding the trading demographics at play in today's markets.

(0:10:24) Discussing why trading options are expensive for retail investors.

(0:12:35) Why people keep trading despite losing on average.

(0:16:16) Exploring the dangers of copying successful traders and the role of social media.

(0:17:17) The after show, headlined by inspirational Rational Reminder Podcast reviews from you, our dear listeners.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder Email — info@rationa…
Episode 310 - Professor Antoinette Schoar: Consumer Finance, Crypto, and Private Equity

20 juni 2024 · 1 uur 13 min
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There is a huge range of factors that can impact our investment decisions, whether we realize it or not, from our level of financial literacy to our political affiliations. This is borne out in research conducted by today's guest Professor Antoinette Schoar, the Stewart C. Myers-Horn Family Professor of Finance at MIT Sloan. Today, Antoinette joins us to share her insights and challenge conventional wisdom on various topics from target date funds to cryptocurrencies. Tuning in, you'll learn about the transformative impact of target date funds on investment behaviours and asset allocation, before delving into the subject of financial literacy and financial advisors. Antoinette also sheds light on the unique dynamics of crypto trading and breaks down why retail investors' strategies in crypto differ significantly from those in traditional markets. We also discuss the complexities of private equity and venture capital, focusing on why these asset classes might not be suitable for retail investors due to high barriers and risks. Our conversation also covers the critical role of regulation in maintaining market stability and protecting investors. Join us for a thought-provoking discussion that promises to deepen your understanding of financial markets and enhance your investment decisions! Lees meer

Key Points From This Episode:

(0:00:18) An introduction to today's guest, Antoinette Schoar, and her extensive research.

(0:03:44) The rise of target date funds in the American retirement system: how it's affected asset allocation and trading behaviour of retail investors.

(0:09:39) The impact of target date funds: how they have affected mutual fund flows, arbitrage opportunities, market efficiency, the elasticity of aggregate demand, and trend-chasing anomalies.

(0:16:48) The influence of individual beliefs, like political affiliation, on financial decision-making and portfolio adjustments, and how to counteract it.

(0:21:54) Perceptions of risk in housing investments: how this…
Episode 309 - Are Robo-Advisors Passive Investors?

13 juni 2024 · 1 uur 9 min
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When robo-advisors first came onto the scene, they were pitched as an easy way to access index funds. These digital platforms provide algorithm-driven financial planning and investment services, with little to no human supervision, and typically use passive investment strategies. But while this technology has revolutionized access, not all robo-advisors are created equal. In today's episode, Mark, Ben, and Cameron sit down to discuss the role of robo-advisors as passive investors, and the performance disparity in robo-advisor returns, as they investigate different robo-advisors, from Wealthsimple to Wealthfront. Next, in this week's version of 'Would you rather?', we have robo-advisors pairing off against active bank mutual funds, with each of our hosts debating the pros and cons of these two approaches. For our aftershow section, we discuss listener feedback, interesting community discussions, Ben's addiction to Excel, and much more. Tune in for a deep dive into robo-advisors and how to navigate this technology! Lees meer

Key Points From This Episode:

(0:04:20) The history of robo-advisors and how they are used today.

(0:08:30) Why there is such a marked dispersion among robo-advisor portfolios; an overview of Wealthsimple's portfolios and the changes they've made over time.

(0:16:00) Wealthsimple's investment returns, fees, and an attribution analysis.

(0:24:19) Why Wealthfront pulled value out of their factor-tilted portfolios in 2022.

(0:26:13) PWL's investment approach and why no strategy is truly passive.

(0:30:43) What the average investor needs to understand when using a robo-advisor.

(0:32:02) Wealthsimple's value proposition and why people are drawn to it.

(0:33:33) Our 'Would You Rather?' Question: Would you rather put all your money with a robo-advisor or in a big bank actively managed mutual fund?

(0:40:30) The growth of passive investing vs active management in the financial industry.

(0:44:12) AI's impact on financial planning and an update on new c…
Episode 308 - Dan Bortolotti: The Canadian Couch Potato

6 juni 2024 · 1 uur 5 min
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When it comes to DIY investing, there's always a temptation to make things more complicated than they need to be. But, in reality, embracing simplicity is one of the best ways to ensure good investment outcomes. Today's episode features an exceptional conversation with our long-time friend and colleague, Dan Bortolotti, who has worked alongside us as an Portfolio Manager at PWL Capital for over ten years. Some of our Canadian listeners might recognize Dan as the man behind the Canadian Couch Potato blog (one of the most popular resources for Canadian investors) and the voice behind the Canadian Couch Potato podcast. Dan is a consummate communicator, both on paper and in person; beyond his extensive blogging, he has also written a number of books, both fiction and non-fiction, the most recent of which includes Reboot Your Portfolio: 9 Steps to Successful Investing with ETFs. Dan has played a pivotal role in making PWL Capital what it is today, and in this episode, we learn about his surprising journey to becoming an advisor, before hearing his wide-ranging insights on DIY investing. Dan breaks down key components for investors, from how to approach your asset allocation and picking index funds to navigating fees, taxes, and performance. We also discuss how the investing landscape has changed since Dan started writing and essential lessons he has learned over the years. To hear all about investing from the Canadian Couch Potato himself, be sure to tune in for this expansive conversation! Lees meer

Key Points From This Episode:

(0:03:52) The origin story of the Canadian Couch Potato blog, by Dan Bortolotti.

(0:08:17) How the availability of index funds in Canada has changed since Dan started writing about them in 2010, and his role in the index fund revolution.

(0:10:01) Why Canadians have been slower to adopt index funds than Americans.

(0:12:09) How the model portfolios on his site have changed over time.

(0:14:20) Why simplicity is so important to a good investment out…
Episode 307 - How Much Life Insurance Do You Need?

30 mei 2024 · 1 uur 7 min
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Are you confident about the amount of life insurance coverage you have? Are you maximizing your tax savings with the principal residence exemption? In this episode, we delve into life insurance and optimizing capital gains to answer these essential questions. In our conversation, we unpack the nuanced topic of life insurance, what people get wrong about it, and how to effectively calculate your life insurance policy needs. Using his own experience as the lens for the conversation, Mark shares how he calculated his life insurance and incorporated costs such as funeral cover, emergency funds, short-term expenses, and income replacement. Learn about using the safe withdrawal rate shortcut, free resources for calculating life insurance costs, and the best financial tools for getting the most out of your policy. He also delves into capital gains and how to use a lesser-known exemption to reduce the amount owed significantly. Mark walks listeners through how the principal residence exemption works and how it impacted the sale of his rental properties. Then, jumping to a brand new segment on the Rational Reminder Podcast, Ben introduces his financial decision-making iteration of the game of 'Would you rather'. Finally, we share listener reviews and feedback on previous episodes and debate whether to lease or buy a car in our after-show segment. Tune in now! Lees meer

Key Points From This Episode:

(0:03:13) Mark explains how he and his wife calculated their life insurance needs.

(0:06:55) Learn how to plan for income replacement and why it is so complicated.

(0:12:10) Ben's perspective on Mark's approach to calculating his life insurance coverage.

(0:13:54) Find out why there are differences between Ben and Mark's calculations.

(0:18:17) How Mark factored in retirement costs into his life insurance calculations.

(0:22:30) Free resources and tips to accurately calculate your life insurance needs.

(0:27:04) Why Mark considers whole life insurance as a separate asset class.

(0…
Episode 306 - Wei Dai: Fighting for Every Basis Point

23 mei 2024 · 1 uur 12 min
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Designing a robust portfolio requires considerable expertise, data, and experience. And while there are plenty of published articles that can guide how you build your portfolio, they are not investment solutions by themselves. Wei Dai is the Head of Investment Research and Vice President at Dimensional Fund Advisors, and she joins us today for a comprehensive and informative conversation on portfolio design for higher returns. Her background includes a Doctor of Philosophy degree in Statistics, Operations research, and Financial Engineering from Princeton. She has also earned a bachelor's degree in mathematics and applied mathematics from Zhejiang University. Her work has been published in multiple journals, including The Financial Analysts Journal. She has also collaborated on articles with esteemed figures such as Professor Robert C. Merton and Robert Novy-Marx. In our conversation with Wei, we explore the contents of these articles, key findings from research conducted by Dimensional Fund Advisors, and how they are implementing this knowledge in their portfolios. We discuss the fundamental aspects of portfolio design, like expected return, risk, and costs, with Wei providing a detailed breakdown of each subject. There's a lot to be learned from today's conversation, and while things get pretty technical, you are in very capable hands! Tune in for a fascinating dive into the latest research on portfolio design and much more. Lees meer

Key Points From This Episode:

(0:03:37) The main risk premiums that Dimensional Fund Advisors target in their portfolios.

(0:05:42) How long-term drivers of returns vary across different regions: an overview of the tests and outcomes they've seen at Dimensional Fund Advisors.

(0:07:15) Unpacking whether the value premium differs from the profitability premium across regions; why it makes sense to be globally diversified.

(0:08:57) Typical approaches to a multi-premium strategy in a portfolio: a rundown of the three approaches they take a…
Episode 305 - Is Private Credit Special?

16 mei 2024 · 44 min
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Private credit is one of the fastest-growing asset classes, and today we take a closer look at why that is, and if it's really worth the hype. When you invest in private credit, you are essentially lending money to borrowers who might have difficulty accessing loans elsewhere. While these assets may be profitable, they can also incur a lot of risk and typically come with illiquidity. It is traditionally traded among institutional and accredited investors, rather than retail investors, namely, non-professional investors. Since private credit has gained so much popularity in recent years, we use today's conversation to unpack how private credit works, the role of private credit funds, the associated performance fees and risks, and what retail investors should know about this asset class before deciding to invest. Our conversation investigates one of the top reasons for private credit's rise in popularity, namely risk-adjusted returns, before evaluating whether this is a worthwhile reason to invest, depending on who you are. Stay tuned for our after-show section where we discuss the proposed changes to the capital gains tax, why the death of value could be exaggerated, and more! Lees meer

Key Points From This Episode:

(0:00:18) Today's main topic, private credit, and our upcoming webinar on May 22nd.

(0:02:18) An introduction to private credit as an asset class.

(0:05:33) Private credit funds: how they work, interest rates, performance fees, and valuations.

(0:08:14) Who does valuations on private credit funds and related risks.

(0:10:01) Unpacking the underlying risks of private credit and how investors are compensated.

(0:11:02) Insights from the paper 'Direct Lending Returns' related to publicly listed business development companies (BDCs).

(0:16:15) Takeaways from the paper 'Risk Adjusting the Returns of Private Debt Funds'.

(0:18:16) Private credit funds, equity exposure, how private credit gets misrepresented, and what investors need to know about high-fee invest…
Episode 304 - Budget 2024: The Capital Gains Inclusion Rate

9 mei 2024 · 57 min
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The Canadian government has recently proposed significant changes to how capital gains are taxed, but how will this impact Canadians? In this episode, we delve into the proposed capital gains tax changes and their impact on financial planning. We unpack the definition of capital gains tax and the complexity of the proposed changes. Explore the historical trends of capital gains tax rates in Canada, how capital gains tax works, and who will be impacted by the proposed changes. We discuss the intricacies of the alternative minimum tax (AMT), its relevance to capital gains tax, and whether the old or new AMT rules apply to the upcoming changes. Gain insights into tax considerations for long-term investment strategies, the importance of tax diversification in mitigating risk, lifetime capital gains exemption, tax planning ramifications, and more! Although this episode is Canadian-focused, it offers many useful takeaways for non-Candaians as well. To gain a comprehensive understanding of the complexities surrounding capital gains tax and strategies to navigate the proposed changes effectively, tune in now! Lees meer

Key Points From This Episode:

(0:00:00) Introduction and outline of today's topic: proposed capital gains tax changes.

(0:03:07) Overview of the topic, what capital gains tax is, and the proposed changes.

(0:08:10) Historical trends in capital gains tax rates in Canada.

(0:10:59) Find out who will be impacted by the proposed changes.

(0:14:45) Advice on how to plan for the proposed changes with an example.

(0:17:13) Model results and we unpack the nuance of AMT (alternative minimum tax).

(0:25:35) How the changes to AMT impact the proposed capital gains tax changes.

(0:32:05) Whether the new or old AMT rules apply to the proposed capital gains changes.

(0:34:27) Important tax considerations for long-term investment strategies.

(0:36:30) Insights into why tax diversification is essential to reduce the tax rate risk.

(0:39:25) Interesting budget proposals an…
Episode 303 - Scott Galloway: The Algebra of Wealth

2 mei 2024 · 1 uur 7 min
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What is the role of luck in financial success? And how can we make decisions that will put us in the best possible position to experience long-term prosperity? Joining us today to unpack these questions is Scott Galloway, a talented public speaker, author, entrepreneur, and professor of marketing at NYU Stern School of Business. His latest book, The Algebra of Wealth: A Simple Formula for Financial Security, explores key lessons to help you optimize your life for wealth and success. He is the host of a thrice-weekly podcast, The Prof G Pod, and co-hosts a podcast called Pivot with esteemed tech journalist, Kara Swisher. Scott also has a very popular blog called No Mercy / No Malice, where he shares his thoughts on wealth, business, psychology, and more. In today's conversation with Scott, we delve into the lessons he's learned about economic success and the contents of his new book, The Algebra of Wealth. Tuning in you'll learn how the economic stress he experienced as a child shaped his life, the important role that luck plays in financial success, and why he believes people should follow their talents rather than their passions. Scott goes on to expand on why diversification is essential for financial success before sharing key lessons from the various businesses he has started, built, and sold. We also discuss how he manages his financial worries, his hopes for his children, and how he defines success. Tune in to hear all of Scott's valuable insights as we take a deep dive into the forces that shape our economic outcomes, and the algebra of wealth! Lees meer

Key Points From This Episode:

(0:00:18) Introducing today's guest, Professor Scott Galloway.

(0:05:43) Unpacking the title of his book The Algebra of Wealth, and what it refers to.

(0:10:39) The pursuit of wealth as a whole-person project and why balance is rarely possible.

(0:13:38) How stoicism can help you spend wisely and resist temptations.

(0:19:23) The difference between working hard and having character …
Episode 302 - Michael Green: Market Efficiency Is Not The Question

25 april 2024 · 1 uur 6 min
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With a wealth of experience as a market theoretician and a prolific contributor to financial discourse, today's guest is uniquely positioned to guide us through the complexities of index fund dynamics. Joining us to discuss the problems that passive investing may be causing in financial markets (and what people should do about it) is Michael Green, Chief Strategist and Portfolio Manager for Simplify Asset Management. Tuning in, you'll learn about the ramifications of the surging popularity of indexing and the sobering reality of mounting market inelasticity, backed by compelling evidence that underscores the challenges facing today's financial landscape. The insights in this episode extend beyond mere observation, with Mike offering policy recommendations and strategies to address the structural issues affecting our markets. While this conversation is certainly challenging, philosophical, and even alarming, it isn't purely theoretical. It's a call to action to safeguard the integrity of our financial systems. So, be sure to join us as we navigate the nuances of indexing and passive investing at large, guided by the expertise and foresight of one of finance's most respected voices! Lees meer

Key Points From This Episode:

(0:05:48) The negative effect that the growth of indexing is having on financial markets.

(0:07:37) Insight into the XIV trade that strengthened Mike's belief in this view.

(0:13:49) Defining the problem that indexing is causing (which might seem like a good thing).

(0:15:57) How market cap-weighted index funds differ from closet index funds.

(0:16:57) Indications that markets are becoming increasingly inelastic over time.

(0:19:21) Why flows into cap-weighted index funds differ from the overall aggregate of active.

(0:24:21) Active versus passive investing in public versus non-public markets.

(0:25:57) The catastrophic event that could be caused by index funds (and how to avoid it).

(0:30:51) Why we need to rethink the definition of passive investi…
Episode 301 - Optimal Government Pension Claiming

18 april 2024 · 54 min
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In this episode, we delve into the best time to claim your Canada Pension Plan (CPP) benefits. Although the focus of this episode is on Canada, there will be many relevant and valuable insights for our non-Canadian listeners. In our conversation, we discuss the importance of understanding the intricacies of CPP benefits, the fundamentals, and how individuals can optimize their retirement income by making informed decisions. Explore the importance of understanding when to claim CPP benefits, how much future financial security a CPP offers, and why the CPP is one of the most valuable retirement assets for most Canadians. Gain insights into how wage growth ties into CPP benefits, the exceptions to deferring a CPP claim, and what made 2022 different regarding CPP claims. Join us as we uncover the nuances of CPP benefits! Lees meer

Key Points From This Episode:

(0:03:25) Unpack the fundamentals of the Canada Pension Plan (CPP) benefits.

(0:10:04) How the timing of making a CPP claim is linked to the benefits.

(0:14:15) Ben explains the financial implications of deferring a CPP claim.

(0:21:34) Uncover common approaches to identify the best time to claim a CPP.

(0:26:06) Learn about the situations when it is best not to defer a CPP claim.

(0:31:12) Why the CPP is one of the most valuable retirement assets for most Canadians.

(0:39:11) The after-show: ideas for the podcast, feedback, segregated funds, and more!

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://twitter.com/benjaminwfelix

…
Bonus Episode - Prof. Meir Statman: A Wealth of Well-Being

18 april 2024 · 36 min
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Today, we welcome back Prof. Meir Statman to talk about the role of finances in well-being. We investigate the role of finances in well-being with Prof. Meir Statman through the lens of his new book, A Wealth of Well-Being. Discover why wealth advisors must evolve into well-being advisors and uncover the impact of finances on various life domains. From dating to education, we discuss the profound financial correlations shaping happiness and well-being. Tune in now! Lees meer

Key Points From This Episode:

(0:00:15) Introduction to returning guest, Prof. Meir Statman.

(0:02:15) How well-being fits into the study of behavioural finance.

(0:06:52) Discover the role of finances in different domains of life well-being.

(0:10:42) Hear why wealth advisors need to change to being well-being advisors.

(0:14:59) Explore the relationship between finances, social status, and overall well-being.

(0:19:46) Whether too much self-control in spending can be a problem.

(0:22:46) The effect of finances on dating and marriage and how work plays into well-being.

(0:26:42) Find out how education fits into well-being and why it is a major regret for people.

(0:32:36) Gain insights into how religion and faith can enhance well-being.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Camer…
Episode 300 - Abby Sussman: Financial Judgment and Decision Making

11 april 2024 · 57 min
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In this episode, we are joined by renowned expert Abby Sussman to unpack how individuals form judgments and make decisions about their finances. Abby is a distinguished professor of marketing at the University of Chicago Booth School of Business whose expertise lies at the intersection of psychology, economics, and finance. In our conversation, we discuss the nuances of financial decision-making and how personal beliefs influence our financial choices. Discover the source of reference points for financial well-being and how expense prediction biases play a role in making poor financial decisions. We explore the effectiveness of budgeting, the nuances of product sensitivity, and the drivers of excessive consumer consumption. Gain insights into navigating the complexities of financial decision-making, the psychology behind it, how AI can help you make better financial decisions, and much more. Tune in to gain a deeper understanding of the psychology behind financial decisions and uncover strategies to optimize your financial future with Abby Sussman! Lees meer

Key Points From This Episode:

(0:04:45) Explore the difference in how we perceive others' wealth versus our own.

(0:08:25) Drivers of the differences in perception and their impact on financial decision-making.

(0:11:43) Steps to reduce excessive consumption and how personal future wealth perceptions influence financial decision-making.

(0:16:58) Discover the source of the reference point people use when considering their wealth.

(0:18:53) How to make better financial decisions and the role of peoples' expectations.

(0:20:20) Unpack expense prediction bias and the problems it creates.

(0:22:55) Methods used to predict expenses and what people typically budget for.

(0:29:00) Pragmatic advice for reducing the influence of expense prediction bias.

(0:31:53) Whether prediction bias manifests in long-term planning, such as retirement.

(0:33:14) Find out if setting a budget is common practice and how it impacts fina…
Episode 299: The Most Important Lessons in Investing

4 april 2024 · 1 uur 23 min
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In this episode, we unpack key tenants of investing and the quality of financial advice in Canada's banking industry. In our conversation, we present a list of lessons we have learned about investing, which has been consolidated from contributions by the Twitter community and the Rational Reminder Community. In our conversation, we discuss ways to beat the market, how narratives can impact the economy, and why timing the market is a bad investment approach. Discover why performance chasing is not a successful strategy, why incentives matter, and why economic growth is a poor predictor of investment success. Learn about the nuanced relationship between expected economic growth and stock returns, why wealth does not give you access to market-beating investments, and the effectiveness of investing in low-cost total market index funds. Finally, in our after-show segment, we delve into the quality of financial advice provided by Canada's six big banks, investment strategies, listener reviews, and much more. Gain valuable insights into navigating the complexities of investing and learn why simplicity, discipline, and skepticism towards overly complex or costly strategies are vital for financial success. Tune in now! Lees meer

Key Points From This Episode:

(0:00:00) Introduction and outline of today's topic: The Most Important Lessons in Investing.

(0:04:55) Why you cannot outsmart the markets and what it takes to beat the market.

(0:07:47) The notion that "this time is always different" during times of financial upheaval.

(0:10:45) Explore the forward-looking nature of markets and their impact on decision-making.

(0:12:08) Unpack the unreliability of market forecasts for making investment decisions.

(0:14:48) Hear why time in the market beats timing the market.

(0:16:11) Important aspects of funds and why investors should not chase portfolio performance.

(0:19:20) Learn about the role of incentives in the distribution of financial information.

(0:25:09) Common misconcept…
Episode 298 - Randall Stutman: Admired Leadership for Financial Decision-Making

28 maart 2024 · 58 min
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Dr. Randall Stutman is an author, highly sought-after speaker, and executive leadership coach to some of the world's most exceptional CEOs, billionaires, and hedge fund managers. As the founder of the Admired Leadership Institute, he is widely recognized as a world-class authority on leadership strategy and style. Today, Dr. Stutman joins us to discuss the behaviours and skills that make admired leaders and how you can translate those characteristics and strategies into your financial decision-making process. Tuning in, you'll learn about the importance of followership, find out why admired leadership is so rare, and hear some practical advice to help you make better decisions. We also discuss why you should actually disagree with your clients more often, why relationships are the cornerstone of any business, questions to ask yourself to find the right client or financial advisor, and much more. Don't miss this fascinating and broad-reaching conversation on leadership and decision-making with specific applications for financial advice relationships! Lees meer

Key Points From This Episode:

(0:03:36) A typical approach to leadership development (and why it doesn't work).

(0:07:21) The two key qualities or characteristics of an admired leader.

(0:09:23) Benefits of followership to create change and implement decisions.

(0:10:28) A simple definition of leadership and why not everyone can be an admired leader.

(0:13:08) Why great leaders and great organizations are values-driven.

(0:16:15) Ways that consensus decision-making can hurt or strengthen an organization.

(0:23:02) Other shortcomings in the decision-making process and how to avoid them.

(0:27:29) Practical advice for financial advisors to become admired leaders.

(0:32:33) Why checklists should never be the focus of a conversation or relationship.

(0:33:52) Traits of admired leaders that financial consumers can emulate.

(0:35:55) The best way for a couple to reach agreed-upon financial goals.

(0:37:29) Tips f…
Episode 297 - Do Stocks Return 10-12% On Average? & Zero to Millionaire with Nicolas Bérubé

21 maart 2024 · 1 uur 12 min
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As human beings, our brains are wired to solve problems. This can make long-term investment strategies, like passive investing, surprisingly challenging, especially if you're not accustomed to the ups and downs of the market – it can feel pretty unintuitive to stay the course when your instinct is to take more active steps to solve the problem! So, how can investors remain firm in their strategy and not get spooked by market changes? Joining us today to unpack this question is financial journalist, Nicolas Bérubé, whose new book From Zero to Millionaire: A Simple and Stress-Free Way to Invest in the Stock Market serves as a guide to investors on how to grow their wealth and achieve good portfolio diversification at a low cost. We talk with him about the contents of his book, his observations on financial media and its effect on investors, how to stay committed when making long-term investments, and more. We also spend the top half of the show discussing a popular idea we've seen posted by influencers online, namely that investing in stocks will give you a return of 10% or more per year on average, and the flaws in their arguments. Tune in for a deep dive into investor psychology, financial media, and much more! Lees meer

Key Points From This Episode:

(0:01:42) A breakdown of the flaws in the trending online theory being posted by influencers claiming that investing in stocks will give you a return of 10% or more per year on average.

(0:09:17) Taking a longer-term view of the US stock market (and other global markets), how it's changed in the past 100 years, and what this means for investors today.

(0:16:12) Relevant findings from various papers on US and global stock market returns, US stock market valuations, performance, the impact of survivorship bias, and more.

(0:27:01) Why it can be so difficult to capture market return as an investor, and a breakdown of how best to approach historical data.

(0:33:33) Talking with Nicolas Bérubé about what he learned from his fai…
Epidose 296 - Adam Alter: The Anatomy of a Breakthrough

14 maart 2024 · 53 min
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Feeling stuck is a common human experience and almost all of us will go through it at some point in our lives. Whether it's relationship struggles, dissatisfaction with work, an inability to progress financially, or a pending midlife crisis, all of these situations can bring up a range of mixed emotions like anxiety, fear, anger, and even numbness. We are joined today by Adam Alter, whose new book Anatomy of a Breakthrough: How to Get Unstuck When It Matters Most serves as a much-needed guide to help readers escape inertia and flourish in the face of freedom. Adam is a professor of marketing at New York University's Stern School of Business with an affiliated appointment in the New York University Psychology Department. His research is primarily focused on judgment, decision-making, and social psychology, and his two previous books, Irresistible and Drunk Tank Pink, are both highly acclaimed New York Times best-sellers. In today's episode, we talk with Adam about the concept behind Anatomy of a Breakthrough, the many forms that feeling stuck can take, and what he has learned about getting unstuck. Tuning in you'll learn about the fundamentals of goal-setting, why striving for excellence is infinitely more sustainable than settling for nothing less than perfection, and how learning to enjoy the journey will help you find meaning and avoid the aimlessness that can come after achieving your goal. We also get into the nature of breakthroughs, the role of luck and creativity, plus a whole lot more. To hear all of Adam's thought-provoking insights and practical advice on getting unstuck, be sure to tune in! Lees meer

Key Points From This Episode:

(0:00:18) Introducing today's guest, Adam Alter, and the concept behind his new book Anatomy of a Breakthrough.

(0:05:41) An overview of the many ways that you can be financially stuck, the role of financial advisors, and when you should seek out help and guidance.

(0:09:04) Insight into the different types of stuckness and how to rec…
Episode 295 - Home Country Bias, Seg Funds, and Todd Rogers on Writing for Busy Readers

7 maart 2024 · 1 uur 34 min
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In this episode, we explore the intricate world of home-country bias in investment decision-making and learn the secret sauce to effective communication and writing. We start by discussing the definition and influence of home-country bias and explore why investors tend to overweight their portfolios with domestic equities despite global opportunities. We dissect the home bias puzzle, the rationality behind bias, and the conditions under which home-country bias makes sense. Then, Mark McGrath joins us to unpack the complexities of segregated funds and why it might not be the investment product you were hoping for. Following that, we sit down with Todd Rogers, a prominent behavioural scientist and professor, to discover the science behind effective communication. He explains how we adapt to different communication styles and techniques over time, the foundations of effective communication, and much more. Be sure to tune in as we unravel the complexities of investing, navigate the world of behavioural science, and bring you the tools you need for financial success! Lees meer

Key Points From This Episode:

(0:00:00) Episode introduction and what listeners can expect.

(0:01:30) Definition of home-country bias and its influence on investors.

(0:04:25) Unpack the home bias puzzle and Canadian home bias trends.

(0:08:27) Discover the conditions when home bias may make sense.

(0:13:10) Relative economic standing: an important aspect of home-country bias.

(0:15:00) Explore home-country bias through a quantitative lens.

(0:20:28) Common concerns of overweighting a small market cap.

(0:27:21) Mark to Market: the good, bad, and complicated side of segregated funds.

(0:31:24) Dissect the proposed benefits of segregated funds.

(0:39:07) Discover the drawbacks and pitfalls of segregated funds.

(0:44:05) Alternatives to segregated funds and Mark's main takeaways.

(0:46:50) Highlights from our conversation with Professor Vanessa Bohns.

(0:49:38) Introducing today'sguest Todd Roge…
Episode 294 - Dan Harris: 10% Happier

29 februari 2024 · 49 min
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In this episode, we delve into the world of mindfulness and meditation with renowned author and meditation advocate, Dan Harris. In our conversation, Dan shares his personal journey from a high-stress career in the news to discovering the transformative power of mindfulness meditation. We explore Dan's best-selling book, 10% Happier which chronicles his exploration into mindfulness practices after experiencing a panic attack on live television. We discuss how Dan's quest for inner peace led him to explore meditation, the core principles of Dan's 10% Happier philosophy, and how mindfulness can lead to incremental but significant improvements in happiness. Discover why Buddhism is a religion that skeptics can line up behind, the intersection of mindfulness and financial decision-making, and the importance of empathy and self-awareness for financial advisors. Gain insights into applying mindfulness principles to everyday life, strategies for building the skill of happiness, the basic steps to start meditating, and much more! Join us on this insightful journey as we explore how mindfulness can truly transform lives and empower individuals to live with greater purpose, happiness, and fulfillment with Dan Harris! Lees meer

Key Points From This Episode:

(0:04:49) Dan shares his journey from a high-stress career in news to discovering mindfulness meditation.

(0:06:48) What mediation is, why he initially thought it was nonsense, and why he changed his mind.

(0:09:11) Unpack the idea of mindfulness and the science that backs up the claims.

(0:11:22) The main thesis of Buddhism and its link to meditation.

(0:14:02) How mindfulness can help manage emotions, improve focus, and enhance relationships in everyday life.

(0:15:48) He shares how difficult it was for him to embrace the concept of meditation.

(0:21:12) Discover what motivated him to explore meditation and mindfulness practices.

(0:21:12) Recommendations to start meditating and how long it takes to form a habit of it.

(…
Episode 293 - Eric Balchunas: Spot Bitcoin ETFs

22 februari 2024 · 52 min
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After a year and a half hiatus from discussing Bitcoin, we felt compelled to explore the implications of the US Securities and Exchange Commission's approval of 10 spot Bitcoin ETFs for trading. In this episode, we dive into the recent news surrounding Bitcoin and its entry into the mainstream investment landscape through spot Bitcoin ETFs. To help us unpack this topic is Eric Balchunas, a seasoned ETF analyst at Bloomberg Intelligence and host of the Trillions Podcast. Eric brings a wealth of knowledge on ETFs and offers valuable insights into the intersection between traditional financial markets and the cryptocurrency space. Join us as we discuss the implications of Bitcoin ETFs trading on regulated exchanges and the impact on its overall anti-establishment identity, the intricacies of approved cash creation and redemption limitations, what Bitcoin ETFs are backed by, the transparency and potential vulnerabilities of Bitwise, and the complexities of navigating anti-money laundering aspects within Bitcoin transactions. You'll learn how financial advisors are likely to leverage spot Bitcoin ETFs, who stands to benefit the most from Bitcoin ETFs, the broader implications for the investment landscape, why Bitcoin is like Tabasco sauce, and more! Tune in for a captivating exploration of Bitcoin's journey into the mainstream investment arena, with Eric Balchunas. Lees meer

Key Points From This Episode:

(0:04:29) Reasons that Canada officially embraced Bitcoin sooner than the USA.

(0:05:55) Why spot Bitcoin ETFs took longer to be approved by the SEC than futures ETFs.

(0:07:54) Which ETF regulations have changed to allow a spot Bitcoin ETF.

(0:09:42) Approved cash creation and redemption limitations.

(0:12:46) What spot Bitcoin EFTs are backed by.

(0:17:15) Bitwise: how it demonstrates transparency and the potential for sabotage.

(0:19:38) How authorized participants will deal with anti-money laundering aspects of Bitcoin transactions.

(0:21:31) How spot Bitcoin ETFs ha…
Episode 292 - Rob Copeland: Ray Dalio and Bridgewater

15 februari 2024 · 47 min
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In this episode, we welcome Rob Copeland, author of the recently released book The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend. Rob, a finance reporter for The New York Times, provides a gripping account of the rise and unravelling of Ray Dalio and Bridgewater Associates. Bridgewater Associates, one of the prominent hedge funds on the planet, is synonymous with the legendary investor Ray Dalio. In our conversation, we delve into the intricacies of the company's investment portfolio, shedding light on the details that contribute to its success, and dissect Ray's supposedly revolutionary model of economic cycles. Discover the unconventional principles that shape Bridgewater's culture, from believability to radical transparency, and get a sneak peek into the bizarre Dot Collector app that fuels the company's operations. Gain insights into employee experiences at the company, the secret sauce to Ray's success, the company's track record in predicting market crashes, undisclosed aspects of Ray's success story, and much more! Tune in now! Lees meer

Key Points From This Episode:

Details about the company's investment management portfolio. (0:06:38)

Dalio's model of economic cycles' influence on the company's investment approach. (0:09:13)

Exploring the criticism toward Dalio's model of economic cycles. (0:10:13)

How successful Dalio has been at predicting market crashes. (0:12:21)

Bridgewater's investment success track record. (0:14:40)

Unpacking Dalio's principles and how he developed them. (0:16:16)

Uncovering how Dalio's principles are perceived within Bridgewater and how they made the company successful. (0:18:56)

Learn how believability and radical transparency work within Bridgewater. (0:20:58)

The bizarre Dot Collector app and how the company leverages it. (0:24:57)

Employees' experiences of working at Bridgewater. (0:28:02)

Rob's opinion about Ray and how he compares to other hedge fund managers. (0:29:38)

Hear about undi…
Episode 291 - The Quant Winter, and is Canada Pension Plan a Scam?

8 februari 2024 · 1 uur 23 min
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Are you ready for a deep dive into quantitative investing, the private credit trend, and the Canada Pension Plan (CPP)? Then this episode is for you! Joining us today is Robin Wigglesworth, The Financial Times' global finance correspondent, and author of Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever, a groundbreaking book about the past, present, and future of passive investing. We talk with Robin about quantitative investing and the ideas he lays out in his article 'A Quant Winter's Tale', before hearing his insights on the private credit trend and his intriguing new book titled Bonds, all about the history of the bond market. Today's episode also features our Mark to Market segment, where Mark McGrath joins us to talk about the Canada Pension Plan (CPP), providing a comprehensive overview of its inner workings, his response to the criticisms levelled against it, and why he believes it's of huge benefit to a great many Canadians. Next, we take a look back at our conversation with Alexandra Macqueen on annuities before sharing our thoughts on its relevance to today's discussion and why it's worth revisiting. Be sure to stay tuned for our after-show segment where we share our book, blog, and viewing recommendations, plus our favourite reviews, followed by a sneak peek of some of the exciting guests we have coming up. Press play now for a deep dive into quant investing, the hype around private credit, saving for retirement, and a whole lot more! Lees meer

Key Points From This Episode:

An introduction to today's guest, Robin Wigglesworth, followed by his breakdown of quantitative investing. (0:04:05)

Theories on what happened to factor investing between 2018 and 2020; what is meant by the quant winter and why we are now in a quant summer. (0:09:59)

How investor sentiment regarding factor investing changed after the quant winter and how the algorithm aversion phenomenon impacted it. (0:15:13)

The collapse of value; the im…
Episode 290 - Morgan Housel: Same as Ever

1 februari 2024 · 1 uur 8 min
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In this episode, we are joined, for the third time, by renowned author and commentator Morgan Housel. Many of you are familiar with Morgan's bestseller, The Psychology of Money, and he is back to discuss his latest book, Same as Ever: A Guide to What Never Changes. He is also the partner at The Collaboration Fund, a network of fund managers investing across asset classes while identifying and supporting companies at the intersection of for-profit and for-good. In our conversation, we delve into the timeless principles that shape our perspectives of the world and why things are the Same as Ever. We discuss the importance of holding cash, challenging traditional analytical approaches and encouraging a broader reflection on life beyond numbers. Discover the recurrent nature of once-in-a-lifetime events, the pitfalls associated with the insatiable desire for certainty, the value and power of storytelling, and the complex interplay between incentives and expectations. Gain insights into the value of forecasting behaviours instead of market dynamics, why pessimism is more common and more captivating than optimism, embracing slight inefficiencies on the path to success, and much more! Don't miss this engaging discussion with a master storyteller and gain new perspectives on finance, human behaviour, and the principles that remain the Same as Ever with Morgan Housel. Tune in now! Lees meer

Key Points From This Episode:

(0:03:28) Why it is important to understand the aspects that never change, with examples.

(0:05:58) Morgan explains the value of random and seemingly inconsequential events.

(0:07:43) Discover the most persistent characteristic of risk and the ways expectations impact behaviour and decision-making.

(0:13:04) How he has been dealing with the success of his book, Psychology of Money.

(0:15:11) What makes once-in-a-lifetime events more common than expected and the problems that a desire for certainty brings with it.

(0:19:16) Leveraging storytelling to understand …
Episode 289 - Retiring Retirement Income Myths with the Retirement Income Dream Team

25 januari 2024 · 1 uur 13 min
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Does the 4% rule still work? In this episode, we welcome three esteemed experts to counter a recent controversial claim made on the Dave Ramsey Show regarding the validity of the 4% rule in retirement planning. Joining us is David Blanchett; the Managing Director and Head of Retirement Research for PGIM DC Solutions, Michael Finke; a distinguished professor of wealth management at the American College of Financial Services, and Wade Pfau; Director of Retirement Research at McLean Asset Management. In our conversation, these experts shed light on the intricate world of retirement income planning, dispelling misconceptions and advocating for a more nuanced approach. Discover the flaws in Ramsey's assertion and explore the dynamics of sequence of return risk in retirement planning. Unpack the complexities of investing in bonds for retirees and the evolving risk profiles of stocks over varying investment horizons. We also uncover the significance of variable spending rates, debunk the fallacies behind aggressive withdrawal suggestions, a safety-first approach in retirement finance, and much more. Tune in for an enlightening journey through retirement planning and equip yourself with expert insights to pave a secure path for your financial future! Lees meer

Key Points From This Episode:

The motivation for addressing Dave Ramsey's 8% retirement spending rate claim. (0:07:26)

Unpack the holes in Dave Ramsey's 8% claim. (0:09:48)

How important sequence of return risk is for retirement planning. (0:15:08)

Discover if investing in bonds is risky for a retiree. (0:17:57)

Learn how the risk of holding stocks changes for longer versus shorter investment horizons. (0:21:55)

Subjective risk tolerance and how it is influenced by market fluctuations. (0:24:04)

Going all-in on stocks compared to strategies that involve both bonds and stocks in your investment portfolio. (0:30:10)

They share their thoughts on Dave Ramsey's notion that the 4% rule is depressing. (0:35:23)

Overview of …
Episode 288 - Scott Rick: Navigating the Money Minefield in Real Relationships

18 januari 2024 · 1 uur
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Tightwads are more likely to hold onto their money even when there is more than enough to spend, whilst spendthrifts will drain their bank account of its very last cent. So, which one are you, and how does that impact your relationships? Joining us today is the remarkable Marketing Professor and Author, Scott Rick. Scott has just penned a new book, Tightwads and Spendthrifts: Navigating the Money Minefield in Real Relationships, which serves as a guide for finding happiness while steering through money and love. To kick-start our conversation, Scott summarizes the relationship that people generally have with money, followed by a deeper exploration of the terms "tightwad" and "spendthrift". We break down the psychology of tightwad and spendthrift behaviours, how these two personality types interact with one another in relationships, the myths of financial infidelity and transparency, and how bank account structures (joint and individual accounts) dictate how money flows in a relationship. We also assess the roles of financial advisors and gift-giving within relationships before Scott shares his thoughts on marrying for money versus marrying for love, how to give your kids the best financial education, and what he hopes every reader will gain from the truly fascinating and informative, Tightwads and Spendthrifts! Lees meer

Key Points From This Episode:

(0:00:33) Introducing the incredible Marketing Professor and Author, Scott Rick.

(0:03:08) Scott's summation of the relationship that people have with money.

(0:04:47)Diving into his latest book: Tightwads and Spendthrifts, and exploring each term.

(0:13:16) Assessing the psychology behind tightwad and spendthrift behaviours.

(0:18:58) The role of financial advisors.

(0:21:15) What spendthrifts and tightwads can do to balance their money scales.

(0:23:34) How tightwads and spendthrifts interact in romantic relationships.

(0:32:10) The way bank account structures affect how money flows in a relationship.

(0:35:39) Debun…
Episode 287: A Practical Look at Private Equity w/ Steve Balaban & Epic Life w/ Justin Breen

11 januari 2024 · 1 uur 36 min
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It's the start of a new year and with it comes an opportunity to re-evaluate your trajectory and set your goals for the months to come, whether they be financial, personal, or all of the above. Kicking things off for today's episode is our conversation with Steve Balaban, a private equity insider with a refreshingly realistic and practical perspective on private equity. We talk with Steve about investing in private equity, the benefits and drawbacks every investor should know about, why due diligence is essential, how private equity interacts with investor psychology, and much more. Tuning in you'll also learn about the Private Equity Certificate offered by CFA Society Toronto in collaboration with Mink Learning and how listeners can gain special access to these training tools. Next, we take a look back at our conversation with Ayelet Fishbach from the Booth School of Business on the science of motivation and goal setting and the contents of her new TEDxChicago Talk The Science of Getting Motivated. We wrap things up with a review of Justin Breen's book titled, Epic Life: How to Build Collaborative Global Companies While Putting Your Loved Ones First, followed by our conversation with the author on the transformational power of naming your year, the power of networking, and other key lessons from his book. For all this and much more, be sure to tune in and start 2024 armed with insights from some of the best thinkers around! Lees meer

Key Points From This Episode:

(0:01:26) Use discount code RATIONAL to watch the award-winning documentary Tune Out The Noise, free of charge (valid until the end of January 2024, so make sure you don't miss out!)

(0:03:44) An introduction to Steve Balaban and Mink Learning, a private equity education company he founded in 2019.

(0:07:29) Steve's insights on aggregate public market equivalent (PME) benchmarking and key issues that arise when using Internal Rate of Return (IRR) to benchmark private equity.

(0:17:58) The best arguments in fav…

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