Show notes
This week I want to look at what the first ten months of 2026 can teach us about how we invest — and why broad diversification keeps looking like the smartest seat in the house.
I start with a Ben Carlson piece from November 1. If you’ve been picking individual tech and AI stocks lately, it has felt like a bloodbath: Google down more than 30% from its highs, Intel off 54%, Netflix down more than 50%, and a long list of others in the penalty box. And yet the S&P 500 is still up almost 12% on the year, with two-thirds of stocks higher. That gap is the whole case for index funds — and the same logic applies to equity asset classes.
From there I go down my favorite rabbit hole: the year-to-date numbers for Vanguard, Avantis and DFA across large, small, value, REITs, international and emerging markets — and what the differences between “traditional” cap-weighted indexing and the factor-based approach at Avantis and DFA may, and may not, be telling us.
I also dig into combination funds. How did a 70/30 Ultimate Buy and Hold compare with Vanguard’s global VT and with an all-in-one like Avantis’ AVGE? Why does holding these asset classes under one umbrella make rebalancing more tax-efficient in a taxable account? And I walk through a new Avantis study, Risk and Return of Tilted Portfolios, that estimates how much adding value and profitability tilts — and small-cap value — may have added to long-term returns.
Finally, I talk honestly about the hardest part of all of this: tracking error, the temptation to measure yourself against the S&P 500 or your neighbor, and why your willingness to stay the course matters more than any single fund choice. Plus a preview of my upcoming Boglehead Conference debate with Jim Dahle — total market index versus small-cap value.
One nice surprise was an email from Feedspot, a huge database of just about every corner of media — podcasts, blogs, influencers and YouTubers. We were pleased to be included in their Top 26 Mutual Funds Podcasts. We came in 3rd, and it was great to see Don and Tom at Talking Real Money sitting right at the top of the list. Tom and Don have been doing this work for more than 25 years, and they were my teachers when the three of us worked on a weekly radio show and, later, the Sound Investing podcast. If you know their work, you can imagine how much fun it was — some of the best days of my life!
As always, thank you for your feedback, your birthday wishes and your generous support of our work. I hope this one helps.
Timestamps
00:57 — Thank-you for feedback, birthday wishes, and donations
03:04 — The Ben Carlson article: tech/AI stocks down while the S&P 500 is up
05:52 — The case for index funds and broad diversification
06:55 — Our approach: Vanguard vs. Avantis and DFA (traditional vs. factor investing)
09:19 — 10-month performance across the asset classes
15:34 — Combination / all-in-one funds (AVGE, AVGV, Ultimate Buy and Hold)
19:56 — The tax advantage of all-in-one rebalancing
21:17 — How the 2-, 4-, and 5-fund strategies began (Bogle, 2017)
21:53 — Preview of the Boglehead debate with Jim Dahle
22:52 — Seth Godin’s “Not Yet” and the evolution of indexing
29:16 — The Avantis study: Risk and Return of Tilted Portfolios
32:24 — Value, profitability, and focusing on financially strong companies
33:11 — The Bessembinder study
41:33 — Tracking error and the patience test
46:30 — A simple three-way framework for a retiree’s equities
46:11 — Staying the course
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