The Rational Reminder Podcast

Latest Episodes:

Prof. Lubos Pastor: Equilibrium Models vs. Intuition (EP.124) Nov 12, 2020

Show notes

Professor Lubos Pastor's brilliant and varied research has been consistently referenced on this podcast. From how politics impacts stock returns to measuring the skill of active fund managers, Lubos joins us today as we explore some of the 'greatest hits' of his research. With Lubos's position on the board of the Slovakian Central bank, we ask him about how quantitative easing can be used to strengthen the economy. His answers highlight how easing can prop up asset prices and raise inflation — and why inflation is the "least bad" option to deal with post-pandemic debt. We then discuss Lubos's research on how political cycles affect stock returns and why stock returns are higher when a Democrat is in the White House. After diving into how stock prices respond to political uncertainty, we look at why green assets tend to generate higher stock prices but low expected returns. While talking about his research on measuring volatility, Lubos argues against the conventional wisdom that stocks are stable, in the long run. We touch on how this can affect your retirement asset allocation before chatting about whether young people should use leverage. With so many people moving from active to passive and index fund investing, we analyze the relationship between the scale of active funds and the skill of active managers. Near the end of the episode, we talk about the effect that market-wide liquidity has on stock prices and why you cannot diversify away from liquidity risk. Our conversation with Lubos is filled with insights, each of which could inspire hours worth of discussion. Tune in to hear more from our discussion with Professor Lubos Pastor.

Key Points From This Episode:

Introducing Professor of Finance and today's guest, Lubos Pastor. [0:0:15]
The role of central banks and the goal of quantitative easing. [0:05:06]
Whether quantitative easing props up asset prices. [0:07:58]
Exploring different findings on quantitative easing by central banks and academics. [0:08:51]
Why inflation may be the "least bad" option to deal with post-pandemic debt. [0:10:27]
How increased inflation helps shift the burden of debt from those who are most impacted by lockdowns. [0:11:17]
Lubos explains the relationship between political cycles and stock returns. [0:13:39]
Hear how political uncertainty affects stock returns. [0:18:46]
Why green assets tend to generate higher stock prices and low expected returns. [0:20:38]
What factors would cause green assets to perform well, and how long this might last. [0:25:22]
The link between sustainable investing and firms pushing to turn green. [0:27:48]
Dispersions among ESG rating organizations and issues related to ESG scoring. [0:29:45]
Why green assets will, most likely, never outperform in the long-term. [0:32:37]
Exploding the conventional wisdom that stocks are less volatile in the long run. [0:34:26]
How long-term stock volatility affects your retirement fund asset allocation. [0:38:30]
How human capital and mean reversion should factor into a young person's decision to use leverage. [0:39:54]
Analyzing the skill and scale of active fund management. [0:42:49]
Why consumers moving towards passive investing will increase active fund performance. [0:46:37]
Answering the question: Did active funds do well over the pandemic? [0:52:39]
Ways of selecting a good active fund manager. [00:54:28]
Buffett's alpha strategies of replicating the decisions of top fund performers. [00:56:55]
How market-wide liquidity impacts stock prices. [01:10:42]
Whether current liquidity betas can predict future liquidity betas. [01:02:32]
Lubos shares how he defines success in his life. [01:05:18]

(Irrationally) Investing in Technological Revolutions, Household CFO Job Analysis, and Learning to Sell Mutual Funds (EP.123) Nov 05, 2020

Show notes

As counter-intuitive as it may seem, most of the companies that push us into the next technological revolution deliver poor investment returns. Today we look at current and historical data to show why this is the case but first, we chat about the top financial news of the week. Borrowing heavily from Carlota Perez's Technological Revolutions and Financial Capital, we then explore how the links between tech revolutions and investing adhere to a consistent model. Following this model, we discuss how our current information-led revolution is as impactful as revolutions experienced in previous generations. We touch on the factors that lead to innovation, historical perspectives of technology companies, and the many investing phases resulting from tech revolutions. Despite making for poor returns, we talk about why the frenzy of investing that accompanies innovation is good for that industry and leads to a golden age of tech adoption and growth. A key takeaway, we dive into how investors are paying too much for the expected growth of new companies and that there is little to no link between massive growth and high stock returns. From guessing the next IPO winner, we move to our planning topic of the week — how to be a successful household CFO. We close this episode with our bad financial advice of the week. There's a lot of pressure in the market to invest in tech. Despite that, tune in to hear why you shouldn't invest in the next technological revolution.

Key Points From This Episode:

Hear about host Benjamin Felix's burgeoning 3D printing addiction. [0:0:06]
Sharing listener feedback and messages from the Rational Reminder community. [0:02:02]
Robinhood and why users are treated as the product, not the customer. [0:04:33]
News on what might be the largest cash raise in IPO history. [0:07:25]
How most ETF assets are in products that were launched prior to 2015. [0:09:24]
Benjamin shares details about his project exploring the value of investing in tech revolutions. [0:11:05]
Modelling the consistent sequences that technological revolutions follow. [0:14:38]
Why current tech revolutions are as powerful as those experienced in previous generations. [0:16:55]
Which common factors lead to tech revolutions. [0:18:31]
Looking at historical examples of innovations and the performance of tech companies. [0:20:35]
Why innovative big companies become unable to lead the next tech revolution. [0:23:18]
How explosive growth and a frenzy of investment is common during early tech breakthroughs. [0:29:30]
Signs that our current tech bubble has begun to pop. [0:34:45]
The benefits of investment frenzy phases for tech industries and society as a whole. [0:36:15]
Exploring what happens after phases of investment frenzy. [0:38:10]
Evidence showing that investors pay too much for the expected growth of new companies. [0:42:42]
Why there is no link between massive industry growth and stock returns. [0:50:00]
Applying lessons from our discussion to our current investing environment. [0:52:03]
Why you probably shouldn't put your money in the technological revolution. [0:58:04]
How people operate as unofficial CFOs within their households. [01:02:45]
The many tasks that household CFOs need to perform. [01:05:20]
Bad advice of the week; swap your bonds for dividend-paying stocks. [01:10:42]
Why increasing inflation may be a key post-pandemic government strategy. [01:15:40]

Prof. Moshe Milevsky: Solving the Retirement Equation (EP.122) Oct 29, 2020

Show notes

There are seven equations that, if understood, will put you in the best possible position to tackle your retirement plan. Today we speak with business professor Moshe Milevsky about these equations, which he's written extensively about in his best-selling book, The 7 Most Important Equations for Your Retirement. After introducing Moshe, we dive straight into the first equation that maps out the longevity of your money. Following this, we talk about determining how long you will live by comparing your biological and chronological ages. Regarding the third equation, Moshe provides his insights into evaluating the usefulness of an annuity plan, and at what age they become relevant to you. We then chat about what annuity plans are offered in Canada versus elsewhere and why people don't want to buy annuities during a bull market. Despite the popularity of the '4% spending rule' — which we also unpack — Moshe discusses the importance of being adaptable with your retirement spending rates. Reflecting on the key theme of another of his books, we explore the question of whether people are stocks or bonds. Moshe shares some investing advice for younger listeners and touches on what the ideal mix of stocks, bonds, and human capital looks like. For the last equation, we look into the impact of probability frameworks and why financial advisors need to understand the math behind retirement plan probabilities to make meaningful recommendations. Throughout our discussion, Moshe presents coherent answers and pragmatic advice. Tune in and learn more about the equations needed to build the best possible retirement plan.

Key Points From This Episode:

Introducing today's guest, Professor Moshe Milevsky, and his work. [0:0:15]
Exploring Moshe's book, The 7 Most Important Equations for Your Retirement. [0:02:57]
Mapping the longevity of your money according to Moshe's 'Fibonacci Equation.' [0:03:25]
Determining how long you will live when planning your retirement funds. [0:04:37]
Understanding the difference between your biological and chronological age. [0:06:22]
A challenge to our retirement system; it's based on chronological and not biological age. [0:08:45]
Introducing the concept of annuities and how they can be valued. [0:10:03]
Striking a balance with your annuity plan and answering — "How much is too much?" [0:11:42]
Moshe shares his thoughts on how much insurance companies factor in biological age. [0:14:04]
Ideas on using your biological age to your advantage. [0:15:35]
Why you probably shouldn't even consider getting an annuity until you're 60. [0:17:16]
Canadian annuity plans versus elsewhere; "The shelf feels empty here." [0:18:30]
The correlation between being in a bull market and people not wanting annuities. [0:20:35]
Establishing your ideal retirement spending rates — flexibility is important. [0:25:25]
Unpacking the '4% rule' and why it's a ridiculous spending framework. [0:28:04]
What your mix between stocks, bonds, and human capital should be. [0:31:08]
Answering the question — are humans stocks or are they bonds? [0:33:28]
Leveraging youth to get quicker exposure and equity. [0:36:03]
Life insurance and measuring your financial legacy. [0:39:10]
Details on the life of Andrey Kolmogorov and his effect on understanding probability. [0:40:54]
How important probability frameworks and analysis are to retirement planning. [0:43:17]
The impact of low-cost index funds on retirement income planning. [0:45:18]
Keeping finance students engaged in the industry. [0:47:24]
How Moshe defines success, his other research interests, and reflections on the success of his books. [0:49:53]

Day Trading and Overconfidence (EP.121) Oct 22, 2020

Show notes

Despite the mountain of evidence against it, day trading is thriving. Today we dive into the research and explore why the practice is alive and well before answering the question — "Can too much confidence lose you money?" After touching on investing news, listener feedback, our books of the week, and our take on the 'Ultimate Ned Debate,' we open our discussion on day trading. In our conversation, we look at the results of numerous papers on the topic, none of which present-day trading as sound financial practice. We shed light on the reasons that people day trade, the performance differences between traders, what a day trader's learning process looks like, stock-picking strategies, and why it's impossible, except in outlier cases, to earn a living as a day trader. As we unpack the literature, we discuss key insights on the impact of day trading on the financial world. From one investing sin to another, we talk about how overconfidence can harm your investment performance. We balance the positives and negatives of having confidence, highlighting how too much confidence can lead to poor decision-making and a false sense of how much you know. Tune in to hear some of the latest investing news and to learn more about the pitfalls of day trading and overconfidence.

Key Points From This Episode:

Acknowledging the 33rd anniversary of Black Monday. [0:01:08]
How the podcast is faring against other podcasts within the investing category. [0:02:07]
News on past and upcoming episodes and responding to listener feedback. [0:04:09]
From technological revolutions to starting with a 'why', we explore the books of the week. [0:07:23]
Top news story; Fidelity Magellan Fund is moving to an ETF format. [0:12:06]
Weighing in on the "Ultimate Nerd Debate" on the value and risks of small-cap allocation. [0:14:45]
Why performance doesn't change when you invest in a fund using a different currency. [0:19:12]
Introducing today's portfolio and planning topics — day trading and overconfidence. [0:21:56]
Examining the data sets and papers that assess the effectiveness of day trading. [0:23:48]
Analyzing two competing theories that explain the behaviour of day trading. [0:25:57]
Attributing a portion of all portfolio return losses to the effects of day trading. [0:30:39]
Comparing the performance of the best and worst day traders. [0:33:52]
Why it might be impossible for you to earn a living as a day trader. [0:36:58]
Applying Michael Mauboussin's 'Paradox of Skill' to day trading. [0:39:50]
Three reasons why people still day trade, despite evidence that they make for bad investments. [0:42:38]
Which stocks day traders trade and how they pick their stocks. [0:45:42]
Why overconfidence can turn you into your worst enemy. [0:50:25]
Trends in which investors develop an inflated sense of how much they know. [0:56:02]
Hear this week's bad advice of the week; ignore the data and only invest in excellent companies. [01:01:24]

Annie Duke: How to Decide (EP.120) Oct 15, 2020

Show notes

Good decision-making is a fundamental part of achieving our goals, so getting better at it would be in anybody's best interest. Here to talk about making better decisions is Annie Duke, expert poker player and author of How to Decide: Simple Tools for Making Better Decisions, and Thinking in Bets. Annie starts by defining what a good decision should look like and some of the steps involved. From there, we explore the idea of how to accommodate the fact that our preferences change and we sometimes do not even know what they are in our decision-making processes. Uncertainty is a big part of what makes future choices difficult, and Annie talks about how it is caused by either luck or ignorance, the latter of which we can control, thereby reducing uncertainty as much as possible. Another big theme today how to know which decisions to spend time on and which not to. We waste a lot of time on choices that do not affect our happiness much, and on the other end of the scale, big choices often are hard because the different outcomes they present look quite similar. Annie gives us a few tools to deal with both scenarios. Toward the end, Annie dives deeper into what a good decision involves, talking about the need to step outside our beliefs by building an evidentiary record of the process which involves outside input. Tune in for a fascinating conversation that will help you get better at choosing.

Key Points From This Episode:

Introducing today's guest, Annie Duke, and her work on decision-making. [0:00:16.3]
The definition of a good decision and the steps involved in making one. [0:02:51.3]
Examining probabilities of potential choices and the beliefs informing the examination. [0:05:00.3]
Factoring in the possibility of preferences changing while making decisions. [0:08:56.3]
Beliefs as formed by actions, and how to not see a change in course as failure. [0:13:30.3]
When our preferences are clear and when they are not. [0:15:00.3]
Dealing two kinds of uncertainty, one based on luck and the other on ignorance. [0:16:39.3]
How to know how much time to spend on making decisions, and the need to record the process. [0:20:49.3]
Using the 'happiness test' to judge decisions and free up time for the important ones.[0:27:46.3]
Choosing 'quittable' things to gather information for more binding decisions. [0:30:03.3]
Doing things in parallel so you don't have to make one choice. [0:31:57.3]
Understanding that choices become hard when they present similar outcomes, thus that it is not sensible to deliberate too long. [0:32:32.3]
How to speed up the harder decisions; the 'only option test'. [0:35:47.3]
Involving others while producing an evidentiary record of a decision-making process. [0:37:11.3]
How often we should aim to update our beliefs, making them less subjective. [0:37:11.3]

The Stock Market vs. Elections, and Incentives in Financial Planning (EP.119) Oct 08, 2020

Show notes

Thank you for tuning in to this episode of the Rational Reminder. We start this show with some great news about the comment section and our migration to Discourse. Having an open dialogue has always been crucial for us—it has even led to our latest hire—so we felt it was time to add more structure to it. We then talk about mortgage rates and why so many people do not know that it is possible to negotiate them down even further. There is often a big gap between what is publicly advertised and what you can actually get, so it's worth shopping around. Following this, we touch on IPOs, SPACs, and why some are saying it is similar to 1999. In the heart of this discussion, we unpack the relationship between the US election and stock market returns. If you are like Ben, perhaps you thought there is not much material difference, and while over the short-term there is not, the election cycle data is truly astonishing. We find out the fascinating explanation of why there are higher excess returns under Democratic leadership, and it is probably not what you think! Moving on, we chat with our newest advisor Jordan Tarasoff where he sheds light on his previous employment at a sales and product-centric advisory firm. We talk about how this affects both the customer and the advisor, and Jordan ends with talking about his positive time at PWL so far. To hear more, be sure to tune in today!

Key Points From This Episode:

Some great news about migrating the comment section to Discourse. [0:00:09.3]
The new PWL team member we are welcoming and our shop opening. [0:01:27.3]
Why Cameron recommends everyone watch The Social Dilemma. [0:04:19.3]
Recommended books: Open and Succession Planning for Financial Advisors. [0:08:27.3]
Results from a survey around people's knowledge of mortgage rates. [0:11:43.3]
Some of the reasons that mortgages can be tricky. [0:14:20.3]
What is happening with IPOs and why it is being likened to 1999. [0:15:26.3]
Insights from Hendrick Bessembinder about how investors should use his findings to structure their portfolios. [0:19:16.3]
A follow up about safe withdrawal rates we touched on a while back. [0:21:44.3]
Today's investment topic: The US election and stock market relationship and Ben's assumptions prior to research. [0:24:13.3]
Are returns affected by US elections? Hear Ben's findings. [0:27:26.3]
The relationship between beliefs and optimism in the market. [0:30:31.3]
Unpacking the link between volatility and the election. [0:32:09.3]
Looking long-term at the stock market through election cycles. [0:33:14.3]
How the timing of a Democratic president being elected results in positive excess returns. [0:39:26.3]
The short-term effects of the election are minimal compared to changes over an entire election cycle. [0:44:39.3]
Get to know Jordan Tarasoff, PWL's newest advisor, and his previous experience. [0:47:01.3]
Some of the conflicts and tension Jordan experienced in his former advisory role. [0:49:33.3]
What to keep in mind about adding segregated funds to your portfolio. [0:54:47.3]
Why you should not put a great deal of money into life insurance. [1:01:11.3]
The flawed hiring model that Jordan experienced at his former workplace. [1:02:49.3]
Jordan's advice for anyone with a product-centric financial advisor. [1:05:49.3]
What PWL does better, according to Jordan. [1:07:55.3]
Bad advice of the week! [1:08:57.3]

The Psychology of Investing — Bounded Rationality with Victor Ricciardi (EP.118) Oct 01, 2020

Show notes

What are the psychological conditions that allow investors to make rational decisions, and how do these processes of decision-making occur? These are the questions that our guest, Victor Ricciardi, is dedicated to answering and what he is here on the show today to talk about! Victor is the Visiting Assistant Professor of Finance at Washington and Lee University as well as the Coordinator of Behavioral and Experimental Research at the Social Science Research Network. He has an MBA in finance and an advanced professional certificate in economics from St. John's University and holds graduate certificates in personal financial planning and financial therapy from Kansas State University. Victor is the co-author of Investor Behavior: The Psychology of Financial Planning and Investing, in which he and H. Kent Baker explore and unpack the exact topics we look at in this episode. In our conversation, we talk about the steps that investors can take in order to make better decisions, and for Victor, this means maintaining a balanced portfolio and recording the circumstances and conditions in which decisions are made. Victor's starting point for better investing is self-knowledge and understanding one's own psychology and risk tolerance. He also underlines becoming familiar with the environments that allow you to make the best decisions and refining this wisdom over time. We also dig into the topics of the subconscious, checking biases, and financial therapy, so make sure to join us to hear it all.

Key Points From This Episode:

The history of academic studies on investor behaviour. [0:02:11.2]
Victor's thoughts on the rational decisions investors should aim for. [0:04:50.5]
The idea of 'bounded rationality'; sufficing and the factors that influence decisions. [0:06:38.9]
Benefits and dangers of group investments — more or less rationality. [0:09:43.2]
Weighing the usefulness of heuristics in the investment process. [0:11:54.1]
The role of the subconscious in human decision-making. [0:13:33.8]
Victor's thoughts on sustained commitment to active investing, despite the evidence. [0:15:45.6]
The framing of information and the impact this has on investor behaviour. [0:19:09.5]
A five-factor model for personality; extroversion, agreeableness, conscientiousness, neuroticism, and openness to intellect. [0:22:33.4]
Unpacking the emerging profession of financial therapy and Victor's thoughts on its benefits. [0:28:36.3]
The relationship between money and happiness; the importance of options. [0:31:42.7]
Methods for checking our biases; education, simplicity, rebalancing, and more! [0:33:44.3]
Prioritizing trust and ways to ensure that received advice is dependable. [0:35:38.2]
The effect of access to free information and weighing the helpfulness of the internet. [0:37:47.2]
The application of behavioural bias models to the real estate market. [0:39:38.6]
Victor's personal definition of success: Impacting students. [0:41:49.4]

A Message from the Bank of Canada, and Safe Withdrawal Rates with Factor Tilts (EP.117) Sep 24, 2020

Show notes

For the first part of today's discussion, we are joined by Don Coletti from The Central Bank of Canada. He is here to talk about their upcoming recommendation for a monetary policy framework for the next five years which is incorporating public feedback into its development through the survey, Lets Talk Inflation. From there, we touch on some favourite books, Starbucks's stored value card liabilities, the benefits of keeping inheritance in a separate account, new standards for financial planners and advisors proposed by the FSRA, and why SoftBank did not pile into call options and cause the rally in tech as the previous headlines suggested. Heading into the meat of the episode next, Ben shares some findings from a model he built inspired by a program written by one of this show's listeners that tests historical safe withdrawal rates for factor loaded portfolios. Ben gets into a series of papers that speak to the diversification benefit of adding factors in this section too. He wraps up the discussion with a spanner in the works though, which looks at this question through the lens of time-series momentum rather than cross-sectional momentum. Here, he considers trend following as another type of diversification that has shown favourable impacts on portfolio returns in the data that exists. As usual, we wrap up with our bad advice of the week, hearing Cameron relate the bizarre 'findings' of a Forbes article claiming that active management beats passive investing in the face of piles of data to the contrary!

Key Points From This Episode:

Updates: An upcoming guest, great reviews of this show, and the brilliant discussions thread. [0:00:23.0]
Introducing Don Coletti to talk about The Bank of Canada's outreach programme. [0:04:52.0]
Alternative approaches to monetary policy the Bank of Canada is considering. [0:07:19.0]
Thoughts on the US Federal Reserve's change to average inflation targeting. [0:11:43.0]
How open the Bank of Canada is to making a change. [0:13:14.0]
Why the Bank of Canada is placing more emphasis on engaging with the public as part of their renewal. [0:14:35.0]
Why questions about large scale asset purchases and forward guidance were included in the survey. [0:17:00.0]
The response rate so far to the Bank of Canada's Let's Talk Inflation survey. [0:18:59.0]
Favourite books and series, and Starbucks's stored value card liabilities. [0:21:50.0]
The benefits of keeping inheritance in a separate account. [0:26:24.0]
Standards for financial planners and advisors the FSRA is proposing. [0:28:20.0]
Why SoftBank was not piling into call options and responsible for the rally in tech. [0:31:43.0]
Ben's remodelling of a listener's code that tests historical safe withdrawal rates for factor loaded portfolios. [0:34:40.0]
Safe withdrawal rates for different stock indexes according to Ben's model. [0:37:15.0]
A paper looking at the interaction between factors historically and the results this produced. [0:47:52.0]
Findings of a paper looking at the five factors through business cycles. [0:56:57.0]
Papers exploring whether a factor can be cheap and therefore have a higher extended premium. [1:00:41.0]
The shadow time-series momentum casts on this; the impact of trend following on safe withdrawal rates. [1:02:46.0]
Bad advice of the week: Active management beats the stock market. [1:15:51.0]

Recovering from Active Management through Education (EP.116) Sep 17, 2020

Show notes

Joining us on the Rational Reminder today is one of the pioneers in the space of evidence-based investing, and someone who has been a massive inspiration to us, Mark Hebner! His website, Index Fund Advisors, was one of the first to start explaining the ideas of an evidence-based approach and the power of indexing, way back in the 1990s. We get to hear from Mark about his transition from misled active investor to his discovery of indexing and how this led to him founding Index Fund Advisors. One of Mark's mantras is to replace speculation with education, an idea he has held dear since his first forays into passive strategies and a message he delivers to his new clients repeatedly. Mark also tells us about the niche he filled with his business, visually presenting the evidence that was being ignored, in a way that was both easy to understanding and also convincing for investors. Our conversation covers the troubled waters of DIY investing, why Mark believes that an advisor is a necessary part of a good approach, as well as the parts of wealth management that are not actual investing. Mark unpacks his definition of risk and how best to think about it before we get into the topic of taxation. So for all this valuable information from a true authority, be sure to listen in with us and hear what Mark has to say!

Key Points From This Episode:

The events that led up to Mark founding Index Fund Advisors. [0:03:18.7]
Mark's 12 step process for getting out of active investing and the importance of the first one. [0:11:41.3]
Advice for avoiding the allure of active management — the idea of the Ulysses Pact. [0:16:12.2]
Thoughts on large-cap growth stocks and the lessons we learn from history. [0:18:34.6]
You cannot cheat risk; rules that have remained the same since 1720. [0:22:37.3]
The folly of market timing and Mark's approach for explaining this. [0:27:55.1]
Understanding tax and how it should impact and propel passive strategies. [0:33:10.1]
The best way to think about risk — the uncertainty of your expected returns. [0:36:16.6]
Important lessons that Mark has learned while educating clients over the years. [0:39:02.4]
Aspects of wealth management apart from investing; saving, withdrawal rates, spending, and more. [0:43:28.2]
The indispensability of an advisor — why DIY investing is not the way to go. [0:47:08.7]
Mark's personal definition of success: Freedom of choice and the opportunity to help. [0:51:04.4]
The public company that Mark had and exited before he got into investing. [0:54:23.8]

Actively Managed Funds vs. COVID-19, Behavioral Nudges, and a Sustainable Investing Update (EP.115) Sep 10, 2020

Show notes

Our focus for this episode of the Rational Reminder is split into two sections; first, we cycle through our regular features, looking at a number of studies and articles of interest, the market during the pandemic, and our bad advice segment, and then Benjamin is joined by Tim Nash to talk about ethical investing and comment on Wealthsimple's new sustainable portfolio. We start off our weekly round-up talking about the idea of broadening a knowledge-base and how reading widely and diversely on all manner of subjects can influence and benefit your investing. From there, we turn to the topic of quantitive easing before exploring Tim Wu's thesis about information empires and how they cyclically influence economics. We then dive into the Ontario Securities Commission Investor Experience Study and Lubos Pastor's paper, 'Mutual Fund Performance and Flows During the COVID-19 Crisis'. Both of these shed light on investor behaviour and market performance during 2020 and also offer some interesting findings on the strength of some active management. Daniel Crosby has laid out what he calls '22 Behavioral Nudges to Optimize Client Outcomes', which we then run through, touching on each of his ideas and commenting where necessary. Our bad advice of the week comes from TikTok, and we listen in on two, worryingly misleading clips from TikTok personalities — the social platform may not be the best place to find sound financial advice! For the last part of the show we hear from Tim Nash; he shares his thoughts on Ken French's appearance on the show recently and what the pandemic has proven about sustainable funds going forward. So for all of this and a whole more, in a jam-packed episode, be sure to listen in with us!

Key Points From This Episode:

The importance of a wide range of reading material and looking at Peter Thiel's Zero to One. [0:03:35.2]
Quantitative easing and the important work that Frances Coppola has done on the subject. [0:09:22.8]
Tim's Wu's economic theory around the cycle of information empires. [00:11:49]
Takeaways from the Ontario Securities Commission Investor Experience Study. [00:13:53]
Narratives about actively managed funds during the COVID-19 crisis. [0:20:04.1]
The performance and flows of mutual funds; looking at Lubos Pastor's paper. [0:28:35.7]
Sustainable funds during the crisis — the past research that this now underlines. [0:38:03.3]
Looking at the 22 behavioural nudges identified by Daniel Crosby for optimizing client outcomes. [0:43:23.7]
Bad advice of the week: A couple of concerning clips of financial of content on TikTok. [0:58:46.2]
An introduction to Wealthsimple's new sustainable model portfolio. [1:03:45.5]
Tim weighs in on what this progressive portfolio really means. [1:08:32.7]
A response to the conversation we had with Ken French about ESG. [1:11:44.1]
The increasing prioritization of sustainable companies during the pandemic. [1:16:47.8]

Our TOPPODCAST Picks

Follow Us

Stay Connected

The Rational Reminder Podcast

Related Podcasts

Links

Stay Connected