The Most Important Lessons in Investing Ben Felix 2024-04-11 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpOver the last 10 years I have spoken to thousands of individual investors about their investments and financial plans while working at PWL Capital, and I have interviewed some of the smartest people in finance, economics, and psychology on the Rational Reminder podcast.This is what I have learned. These are all lessons that investors will learn eventually, though many will learn them the hard way.0:29 1. You’re not that smart (relative to the market).0:42 2. This time is always different.1:03 3. The market is forward-looking.1:20 4. Market forecasts are not useful. 1:34 5. Time in the market beats timing the market. 1:47 6. Most funds do not beat the market.2:12 7. Incentives matter.2:26 8. Expected economic growth and stock returns are unrelated.3:12 9. Good portfolio management does not make up for bad financial planning.3:27 10. Risk and expected returns are positively related.3:42 11. The risk-expected return trade-off has a term structure.3:58 12. Fees and taxes matter.4:12 13. Complexity and costs are positively related.4:27 14. There is no single optimal investment strategy.4:44 15. The best investment strategy for you is the one that you can stick with.5:00 16. There is no such thing as a “passive” investment.5:14 17. Wealth does not give you access to market-beating investments.5:30 18. Diversification is (still) the only free lunch in investing.5:44 19. Investments should be evaluated on process, not outcome.5:58 20. Investing has been solved.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
No… Homeowners are NOT Happier than Renters Ben Felix 2024-10-10 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/dfc892f743e14459bea621fd9fbba1faWill buying a home make you happier? The evidence is mixed, at best.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Why Would Anyone Hire a Financial Advisor? Ben Felix 2024-09-28 | Most financial advisors can't outperform a low-cost ETF portfolio that costs a fraction of a percentage point to own. In many ways, index funds have effectively "solved" investing. Yet many people continue to delegate their investment management and financial decision-making to financial advisors.------------------Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/69da8ac719614415ba4dc58e41e86dc3Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Hidden Risks of Private Credit Ben Felix 2024-07-13 | Private credit consists of loans - similar to bonds - except they are non-publicly traded loans created by non-bank entities like private credit funds or business development companies to fund private businesses. This asset class is promoted to retail investors for its high yields and stable returns, but as you can probably guess, I’m skeptical.------------------Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/f91735b1b7dd49ae935916f53d27b1beFollow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Will ARKK Recover? Ben Felix 2024-04-23 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/b9d40e1d2937490d988270833fb56b92Investors in ARKK - many of whom arrived late to the party - have experienced dramatic ups and downs, with an emphasis on downs for most investors. The fund crashed 77% in 2021 and 2022 after taking in huge inflows. The question anyone still holding these funds must be asking - or should be asking - is whether it will recover.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Budget 2024: Capital Gains Tax is Increasing [Canada] Ben Felix 2024-04-19 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpCanada’s Federal Budget 2024 has proposed an increase in the capital gains tax rate in certain cases. This means that selling a taxable asset like a business, a secondary real estate property, or an investment portfolio may cost more.What does this mean for your investments?------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
When Should You Start CPP? Ben Felix 2024-04-10 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpThe CPP uptake decision is one of the most consequential financial decisions that most Canadian retirees will make. The difference between optimal and suboptimal claiming can measure in the hundreds of thousands of dollars of expected lifetime income.References: zbib.org/7c977b4ef1a641de8c2db26d5c526a19------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
CPP is More Valuable than Most People Realize Ben Felix 2024-04-03 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpPeople like to complain about CPP, but it is one of the most valuable retirement assets available to Canadians.References: zbib.org/fe9a63b38a324cfeb6484f022dd9f258------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Bank Financial Advice is Worse Than People Realize Ben Felix 2024-04-02 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpMillions of Canadians get financial advice from Canada's big banks, but bank financial advice may be doing more harm than good.References: zbib.org/c2f2f65a1900445894495b9729872cfd------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Do Stocks Return 10% on Average? Ben Felix 2024-03-28 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpMany people take it as a given that stocks return 10% per year on average, but on closer inspection this belief is likely an error.References: zbib.org/3f0f46d1692f45aca80923ae6fd905e9------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Is Home Country Bias a Mistake? Ben Felix 2024-02-21 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/f7ba4544493741fab9ca668b592f4085Home country bias - overweighting your home country’s stocks relative to their capitalization weights - is detrimental at the extremes, but modest home country bias is theoretically, practically, and empirically useful. It can reduce fees and taxes, it may hedge the cost of local consumption, and it reduces exposure to the potential mistreatment of foreign investors when times get tough. It may also be helpful psychologically due to the role of social comparison in determining individual happiness.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
How Bonds could be Hurting Your Retirement Ben Felix 2024-02-08 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/1611ae243d984b4bb1fe36aa33d1fb3eConventional wisdom and popular personal financial advice suggest that portfolios should contain at least some bonds and that asset allocations should shift increasingly into bonds as investors move toward retirement, but new research suggests that this thinking is due for an update.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Problem with High Stock Valuations Ben Felix 2024-01-23 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpReferences: zbib.org/17df87b9e17b4e6683b67e2a0429192fI’m noticing investors being worried about stock market valuations. When stock market valuations are higher, expected returns are lower. High valuations are not great for long-term investors. But saying that stock market valuations are high misses a lot of nuance. Which stocks are we talking about, and even more broadly, which markets?------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Is ESG Investing Counterproductive? Ben Felix 2024-01-19 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pReferences: zbib.org/3afb67c29fa64cbe95ae9cabf409542dDiscussion with the co-author of Counterproductive Sustainable Investing: The Impact Elasticity of Brown and Green Firms: youtu.be/CHxNpN-2lmw?t=1416ESG investing - that is investing that puts an emphasis on the environmental, social, and governance characteristics of companies - continues to be popular. Investors may want to avoid ESG-related risks, or to feel good about their portfolio, which are legitimate motivations. But how much good is ESG investing actually doing?------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
How to Invest New Cash: Dollar Cost Averaging vs. Lump Sum Investing Ben Felix 2023-12-07 | Meet with PWL Capital: calendly.com/d/cpws-jyp-znpIf you're sitting on cash that you plan to invest you have a few options:1. Invest a lump sum.2. Dollar cost average.3. Wait for a "good time" to invest.The optimal choice may surprise you.References: zbib.org/45b504dfd40d43bf833da0c4c250a124------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
High Income Investments: A Warning Ben Felix 2023-12-05 | Yields are a seemingly easy to understand attribute of investments, making them a focal point for many investors. The salience of yield is no secret to financial product manufacturers, resulting in products being manufactured and marketed based on their high distribution yields.But distribution yields are not investment returns, they are not sufficient to assess expected returns, and, in the way that they are used to market financial products, often to unsophisticated investors, they can be misleading.References: zbib.org/7ac95140522c4bf69d60cdcaafcb6f79------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Cost of Investment Hubris Ben Felix 2023-12-04 | Warren Buffett has famously said that "diversification is a protection against ignorance" and that it "makes very little sense for anyone that knows what they're doing." This quote is often used as an argument against diversified investment strategies, but the thing is, Warren Buffett was probably not talking about you when he referred to people who know what they’re doing.If you think that you are included in Buffett’s group of “people who know what they’re doing” you may have investment hubris, which can cost you in the long-run.References: zbib.org/785fcdc083604e7797e7036a9c8d3c10------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Performance Gap Ben Felix 2023-11-18 | Everybody wants to outperform the market, but most investors underperform for a simple reason resulting in a sizable gap between investor returns and investment returns.I am going to tell you what it is and how you can do better.References: zbib.org/649f0e979c704fa18096a2d5374c816f------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The (Expected) Cost of Pessimism Ben Felix 2023-11-17 | If worrying about the next market crash is affecting your investment decisions, you might be making an expensive mistake. People spend so much time worrying about the next downturn that they miss out on market returns, which tend to be positive in the long-run.These errors lead investors to hold more conservative portfolios than a more optimistic investor would, to avoid participating in the stock market altogether, and to sabotage their long-term returns with short-term decision-making. There are some potential solutions.References: zbib.org/ba1e54f7812842f6b2e12ae94c2ce7b8Related podcast episode: The (Expected) Cost of Pessimism (Plus Matthew Dicks on the Value of Storytelling) | RR 267youtu.be/qVHT2PEEuDg------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Geometric vs. arithmetic returns Ben Felix 2023-11-15 | Yesterday I posted a video explaining why Dave Ramsey’s claim that retirees can safely spend 8% of their portfolios did not make sense.I realized after posting that his claim was even worse than I initially thought.The S&P 500 returned around 12% per year 1926-2022 measured as an arithmetic average. Measured as a geometric average, which is what matters to investors, it has been closer to 10%.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Is an 8% Safe Withdrawal Rate... Safe? Ben Felix 2023-11-14 | Dave Ramsey recently claimed that an 8% withdrawal rate from an investment portfolio is safe for retirees. Unfortunately, his logic is flawed, and retirement spending math is not as simple as he suggests.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
What does a recession mean for expected stock returns? [Canada] Ben Felix 2023-11-02 | Canada might be in an economic recession, but this news should not affect your investment decisions.Recessions do not always mean poor stock returns. The reason is simple:GDP growth is backward looking while stock markets are forward looking.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Is permanent life insurance a tax-free investment? [Canada] Ben Felix 2023-10-14 | Permanent life insurance is often sold as offering tax-free investment growth. That sounds great, especially for people with high incomes, but I will argue that it's a misrepresentation.There are up to 3 layers of tax on permanent life insurance that need to be considered.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Should portfolios change for retirement? Ben Felix 2023-10-13 | Should portfolios get more conservative leading up to retirement?You may want to reduce financial risk as your human capital decreases, but (empirically) people get less risk averse as they get wealthier.Together, these can lead to a flat optimal asset allocation over time.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Your feelings about future returns are not expected returns! Ben Felix 2023-10-12 | Don't let your feelings guide your investment decisions.Subjective return expectations tend to negatively correlate with model-based expected returns.Both are predictive of realized returns, but in opposite directions.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Dont get burned by hot investment themes Ben Felix 2023-10-11 | ETF products are created to attract your attention.Exciting products focused on things like weed, electric vehicles, clean energy, artificial intelligence, and crypto all burned investors.Keep it simple. Don't chase trends.papers.ssrn.com/sol3/papers.cfm?abstract_id=3765063------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Is economic growth good for investors? Ben Felix 2023-10-10 | Economic growth and stock returns are not the same thing.Expected growth is reflected in prices.Unexpected growth is not predictable.The highest growth countries and sectors don't have the highest stock returns.This is one of the biggest misconceptions in investing.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Dividends are not investment returns. They are not free money, and do not offer downside protection. Ben Felix 2023-10-06 | Dividends are not investment returns. They are not free money, and they do not offer any downside protection.Professor Sam Hartzmark, who has studied this extensively, explains on the most recent episode of the Rational Reminder Podcast.youtu.be/CHxNpN-2lmw?si=DLLVCqCRKnNT5vDg&t=2289The Dividend Disconnect: doi.org/10.1111/jofi.12785------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Cash is a terrible long-term investment, even at 5% interest Ben Felix 2023-08-29 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pWith a 5% return on cash, why would anyone want to invest in stocks? I know that cash feels good because its nominal value is stable - it feels safe, but it is counterintuitively extremely risky for long-term investors.Referenced in this video:Reaching for Yield: Evidence from Households - papers.ssrn.com/sol3/papers.cfm?abstract_id=4283008CRASH BELIEFS FROM INVESTOR SURVEYS - nber.org/system/files/working_papers/w22143/w22143.pdfWho Should Buy Long-Term Bonds? - aeaweb.org/articles?id=10.1257/aer.91.1.99Portfolios for Long-Term Investors - academic.oup.com/rof/article/26/1/1/6484661Presidential Address: Discount Rates - onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2011.01671.xLong-Horizon Losses in Stocks, Bonds, and Bills - papers.ssrn.com/sol3/papers.cfm?abstract_id=3964908“Buy the Dip” - pwlcapital.com/resources/buy-the-dip------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Are Structured Products Good Investments? Ben Felix 2023-08-03 | Structured notes are complex investment products with returns linked to an underlying asset. They are often marketed based on high coupon yields, downside protection, or some combination.The payoffs of structured notes can seem like a free lunch, but banks are not selling them to you because they’re your friend. When you’re having dinner with lions you have to make sure you’re at the table, not on the menu.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------Sources: Cochrane, J. H. (2022). Portfolios for long-term investors. Review of Finance, 26(1), 1–42. doi.org/10.1093/rof/rfab038Gabaix, X., & Laibson, D. (2006). Shrouded attributes, consumer myopia, and information suppression in competitive markets. The Quarterly Journal of Economics, 121(2), 505–540. doi.org/10.1162/qjec.2006.121.2.505Carlin, B. I. (2009). Strategic price complexity in retail financial markets☆. Journal of Financial Economics, 91(3), 278–287. doi.org/10.1016/j.jfineco.2008.05.002Henderson, B. J., & Pearson, N. D. (2011). The dark side of financial innovation: A case study of the pricing of a retail financial product☆. Journal of Financial Economics, 100(2), 227–247. doi.org/10.1016/j.jfineco.2010.12.006Deng, G., Guedj, I., Mallett, J., & McCann, C. (2011). The anatomy of principal-protected absolutereturn barrier notes. The Journal of Derivatives, 19(2), 61–70. doi.org/10.3905/jod.2011.19.2.061Bernard, C., Boyle, P. P., & Gornall, W. (2011). Locally capped investment products and the retailinvestor. The Journal of Derivatives, 18(4), 72–88. doi.org/10.3905/jod.2011.18.4.072Deng, G., Dulaney, T., Husson, T., McCann, C., & Yan, M. (2015). Ex post structured-product returns: Index methodology and analysis. The Journal of Investing, 24(2), 45–58. doi.org/10.3905/joi.2015.24.2.045Célérier, C., & Vallée, B. (2017). Catering to Investors Through Security Design: Headline Rate and Complexity*. The Quarterly Journal of Economics, 132(3), 1469–1508. doi.org/10.1093/qje/qjx007Vokata, P. (2021). Engineering lemons. Journal of Financial Economics, 142(2), 737–755. doi.org/10.1016/j.jfineco.2021.04.035Chesney, Marc and Fattinger, Felix and Krakow, Nils Jonathan and Straumann, Simon, Interest Rates, Competition, and Complexity: Demand and Supply of Retail Financial Products (May 15, 2022). Available at SSRN: ssrn.com/abstract=3499660 or http://dx.doi.org/10.2139/ssrn.3499660Henderson, B. J., Pearson, N. D., & Wang, L. (2020). Pre-trade hedging: Evidence from the issuance of retail structured products. Journal of Financial Economics, 137(1), 108–128. doi.org/10.1016/j.jfineco.2020.02.004Ammann, M., Arnold, M., & Straumann, S. (2023). Pricing, issuance volume, and design of innovative securities: The role of investor information. Journal of Financial Intermediation, 55, 101041. doi.org/10.1016/j.jfi.2023.101041Goetzmann, W., Kim, D., & Shiller, R. (2016). Crash beliefs from investor surveys (No. w22143; p. w22143). National Bureau of Economic Research. doi.org/10.3386/w22143Henderson, B. J., Pearson, N. D., & Wang, L. (2023). Retail derivatives and sentiment: A sentiment measure constructed from issuances of retail structured equity products. The Journal of Finance, 78(4), 2365–2407. doi.org/10.1111/jofi.13253Gennaioli, N., Shleifer, A., & Vishny, R. (2012). Neglected risks, financial innovation, and financial fragility. Journal of Financial Economics, 104(3), 452–468. doi.org/10.1016/j.jfineco.2011.05.005Sec. Gov | regulators working together to serve investors. (n.d.). Retrieved July 19, 2023, from sec.gov/news/speech/regulators-working-together-serve-investorsDas, S. R., & Statman, M. (2013). Options and structured products in behavioral portfolios. Journal of Economic Dynamics and Control, 37(1), 137–153. doi.org/10.1016/j.jedc.2012.07.004
Covered Calls: The Income Illusion Ben Felix 2023-06-20 | Some investors are attracted to covered call funds because of their high income yields and seemingly high risk-adjusted returns. However, the appearance of high income and high risk-adjusted returns is the result of clever financial product design, not of actual improvements to returns or risk-adjusted returns.Episode 171 with Campbell R. Harvey: youtu.be/RSwctXnMnrw------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------Sources: Shefrin, H., & Statman, M. (1993). Behavioral Aspects of the Design and Marketing of Financial Products. Financial Management, 22(2), 123. doi.org/10.2307/3665864Black, F. (1975). Fact and Fantasy in the Use of Options. Financial Analysts Journal, 31(4), 36–41. doi.org/10.2469/faj.v31.n4.36Merton, R.C., Scholes, M.S., & Gladstein, M.L. (1982). The Returns and Risks of Alternative Put-Option Portfolio Investment Strategies. The Journal of Business, 55, 1-55. doi.org/10.1086/296153Rendleman, R. J. . (1999). Option Investing from a Risk-Return Perspective. The Journal of Portfolio Management, 25(5), 109–121. doi.org/10.3905/jpm.1999.319700Sharpe, W. F. (1994). The Sharpe Ratio. The Journal of Portfolio Management, 21(1), 49–58. doi.org/10.3905/jpm.1994.409501Harvey, C. R., & Siddique, A. (2000). Conditional skewness in asset pricing tests. The Journal of Finance, 55(3), 1263–1295. doi.org/10.1111/0022-1082.00247Van der Meer, Robert and Sortino, Frank and Plantinga, Auke, The Impact of Downside Risk on Risk-Adjusted Performance of Mutual Funds in the Euronext Markets (July 19, 2001). Available at SSRN: ssrn.com/abstract=277352Leggio, K. B., & Lien, D. (2004). Is covered call investing wise? Evaluating the strategy using risk-adjusted performance measures. In C.-F. Lee, Advances in Quantitative Analysis of Finance & Accounting (Vol. 1, pp. 187–204). WORLD SCIENTIFIC. doi.org/10.1142/9789812565457_0011Farago, A., & Hjalmarsson, E. (2023). Long-horizon stock returns are positively skewed. Review of Finance, 27(2), 495–538. doi.org/10.1093/rof/rfac021Bessembinder, H. (2018). Do stocks outperform Treasury bills? Journal of Financial Economics, 129(3), 440–457. doi.org/10.1016/j.jfineco.2018.06.004Goetzmann, W., Ingersoll, J., Spiegel, M., & Welch, I. (2007). Portfolio Performance Manipulation and Manipulation-proof Performance Measures. Review of Financial Studies, 20(5), 1503–1546. doi.org/10.1093/rfs/hhm025Brooks, R., Chance, D., & Hemler, M. (2019). The “superior performance” of covered calls on the s&p 500: Rethinking an anomaly. The Journal of Derivatives, 27(2), 50–61. doi.org/10.3905/jod.2019.1.087Shefrin, H., & Statman, M. (1993). Behavioral Aspects of the Design and Marketing of Financial Products. Financial Management, 22(2), 123. doi.org/10.2307/3665864Calluzzo, P., Moneta, F., & Topaloglu, S. (2021). Complex instruments have increased risk and reduced performance at mutual funds. Critical Finance Review. doi.org/10.2139/ssrn.2938146Portfolio Growth chart. Source: portfoliovisualizer.com
Who Should NOT Invest in Total Market Index Funds? Ben Felix 2023-05-11 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pI have told you in many of my videos that low-cost total market index funds are the most sensible investments for most people - just own the market. I stand by that statement, but as true as it is, there is a lot more nuance to making good asset allocation decisions. How do you know if you’re like most people? And if you’re not like most people, how should your portfolio be different from the market? Check out the video posted on Rational Reminder: youtu.be/mGCwuS8bjGA Episode 169 with John Cochrane: youtu.be/gbaCOB6CZ6E Episode 200 with Eugene Fama: youtu.be/LLbQux2OZjk Episode 234 with Robert Merton: youtu.be/rmYGZvmYknk Episode 220 with Jonathan Berk: youtu.be/XOWdKXGXBho ------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------Sources:Markowitz, H. (1952), PORTFOLIO SELECTION*. The Journal of Finance, 7: 77-91. doi.org/10.1111/j.1540-6261.1952.tb01525.x Sharpe, W.F. (1964), CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK*. The Journal of Finance, 19: 425-442. doi.org/10.1111/j.1540-6261.1964.tb02865.x Merton, R. C. (1973). An Intertemporal Capital Asset Pricing Model. Econometrica, 41(5), 867–887. doi.org/10.2307/1913811 Fama, E. F., & French, K. R. (1993). Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33(1), 3–56. do.org/10.1016/0304-405x(93)90023-5 Chen, N., & Zhang, F. (1998). Risk and Return of Value Stocks. The Journal of Business, 71(4), 501–535. doi.org/10.1086/209755 ZHANG, L. (2005), The Value Premium. The Journal of Finance, 60: 67-103. doi.org/10.1111/j.1540-6261.2005.00725.x YOGO, M. (2006), A Consumption-Based Explanation of Expected Stock Returns. The Journal of Finance, 61: 539-580. doi.org/10.1111/j.1540-6261.2006.00848.x Campbell, J. Y., & Vuolteenaho, T. (2004). Bad Beta, Good Beta. American Economic Review, 94(5), 1249–1275. doi.org/10.1257/0002828043052240 BETERMIER, S., CALVET, L.E. and SODINI, P. (2017), Who Are the Value and Growth Investors?. The Journal of Finance, 72: 5-46. doi.org/10.1111/jofi.12473 Betermier, Sebastien and Calvet, Laurent E. and Knüpfer, Samuli and Soerlie Kvaerner, Jens, What Do the Portfolios of Individual Investors Reveal About the Cross-Section of Equity Returns? (February 24, 2022). Available at SSRN: ssrn.com/abstract=3795690 or http://dx.doi.org/10.2139/ssrn.3795690 Jensen, Theis Ingerslev and Kelly, Bryan T. and Pedersen, Lasse Heje, Is There a Replication Crisis in Finance? (February 2021). NBER Working Paper No. w28432, Available at SSRN: ssrn.com/abstract=3781319
International Diversification Ben Felix 2023-03-15 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pInternational stocks have trailed US stocks for more than 100 years. Performance aside, the US market is well diversified across industries, makes up more than 50% of the global stock market, and lots of US companies have international revenue exposure. Additionally, international diversification has gotten less effective over time as correlations across markets have increased.These arguments for forgoing international diversification in favor of US stocks do seem compelling at the surface, but, as I will explain, they’re flimsy, at best. International diversification is crucial, both theoretically and empirically, to sensible portfolio construction.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------Sources:van Binsbergen, Jules H. and Hua, Sophia and Wachter, Jessica A., Is The United States A Lucky Survivor: A Hierarchical Bayesian Approach (March 1, 2022). Jacobs Levy Equity Management Center for Quantitative Financial Research Paper, Available at SSRN: ssrn.com/abstract=3689958 or http://dx.doi.org/10.2139/ssrn.3689958Barber, B. M., & Odean, T. (2013). The Behavior of Individual Investors. Handbook of the Economics of Finance, 1533–1570. doi:10.1016/b978-0-44-459406-8.00022-6Bailey, W., Kumar, A., & Ng, D. (2011). Behavioral biases of mutual fund investors. Journal of Financial Economics, 102(1), 1–27. doi:10.1016/j.jfineco.2011.05.002Ritter, J.R. (2012), Is Economic Growth Good for Investors?. Journal of Applied Corporate Finance, 24: 8-18. doi.org/10.1111/j.1745-6622.2012.00385.xViceira, L., Wang, Z. (K. (2018). Global portfolio diversification for long-horizon investors. doi.org/10.3386/w24646Asness, C. S., Israelov, R., & Liew, J. M. (2011). International Diversification Works (Eventually). Financial Analysts Journal, 67(3), 24–38. doi:10.2469/faj.v67.n3.1Anarkulova, A., Cederburg, S., & O'Doherty, M. S. (2021). The long-horizon returns of stocks, bonds, and bills: Evidence from a broad sample of developed markets. SSRN Electronic Journal. doi.org/10.2139/ssrn.3964908BEKAERT, G., HODRICK, R. J., & ZHANG, X. (2009). International Stock Return Comovements. The Journal of Finance, 64(6), 2591–2626. doi:10.1111/j.1540-6261.2009.01512.x Zixuan (Kevin) Wang and Luis Viceira. Working Paper. “Global Portfolio Diversification for Long-Horizon Investors”. Copy at tinyurl.com/ycvedksgBekaert, G., Hoyem, K., Hu, W.-Y., & Ravina, E. (2017). Who is internationally diversified? Evidence from the 401(k) plans of 296 firms. Journal of Financial Economics, 124(1), 86–112. doi:10.1016/j.jfineco.2016.12.010Sinquefield, R. A. (1996). Where are the gains from international diversification? Financial Analysts Journal, 52(1), 8–14. doi.org/10.2469/faj.v52.n1.1961Lewis, K. K. (1999). Trying to Explain Home Bias in Equities and Consumption. Journal of Economic Literature, 37(2), 571–608. doi:10.1257/jel.37.2.571Jacquillat, B., & Solnik, B. (1978). Multinationals are Poor Tools for Diversification. The Journal of Portfolio Management, 4(2), 8–12. doi:10.3905/jpm.1978.408629Senchack, A. J., & Beedles, W. L. (1980). Is indirect international diversification desirable? The Journal of Portfolio Management, 6(2), 49–57. doi:10.3905/jpm.1980.408729Rowland, P. F., & Tesar, L. L. (2004). Multinationals and the gains from international diversification. Review of Economic Dynamics, 7(4), 789–826. doi:10.1016/j.red.2004.05.001Heston, S. L., & Rouwenhorst, K. G. (1994). Does industrial structure explain the benefits of international diversification? Journal of Financial Economics, 36(1), 3–27. doi:10.1016/0304-405x(94)90028-0
The 2.7% Rule for Retirement Spending Ben Felix 2022-12-22 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pIs the 4% rule really 2-3%?Referenced in this video:- Determining Withdrawal Rates Using Historical Data: financialplanningassociation.org/sites/default/files/2021-04/MAR04%20Determining%20Withdrawal%20Rates%20Using%20Historical%20Data.pdf- The equity premium: A puzzle: sciencedirect.com/science/article/abs/pii/0304393285900613- Is The United States A Lucky Survivor: A Hierarchical Bayesian Approach: papers.ssrn.com/sol3/papers.cfm?abstract_id=3689958- The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets: papers.ssrn.com/sol3/papers.cfm?abstract_id=4227132- Episode 224: Prof. Scott Cederburg: Long-Horizon Losses in Stocks, Bonds, and Bills: rationalreminder.ca/podcast/224------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Index Fund Tipping Point Ben Felix 2022-11-16 | Index funds are mainstream. At year end 2021 more of the US stock market was owned by index funds than by actively managed funds. Funds only own about 30% of the US market, but taking a broader view of institutional investors, assets have been shifting toward more passive institutions. Index investing as a theoretically optimal investment strategy works best in an efficient market, but if everyone turns into a passive index investor the market can’t be efficient. This is commonly known as the Grossman-Stiglitz Paradox, and it has some people raising the alarm about a tipping point for market efficiency.------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- Facebook: facebook.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Investing in Your Financial Literacy Ben Felix 2022-10-18 | Investing in your own financial literacy might be one of the best investments that you can make. If you’re watching my videos I’m probably preaching to the choir, but around two-thirds of adults worldwide are financially illiterate. Even in Canada, one of the most financially literate countries in the world, about a third of the population is financially illiterate. Financial literacy is broadly defined as peoples’ ability to process economic information and make informed decisions about financial planning, wealth accumulation, debt, and pensions. Referenced in this video:- Optimal Financial Knowledge and Wealth Inequality: https://repository.upenn.edu/cgi/viewcontent.cgi?article=1093&context=bepp_papers- FINANCIAL LITERACY, RETIREMENT PLANNING AND HOUSEHOLD WEALTH: gflec.org/wp-content/uploads/2019/07/Rooij_et_al-2012-The_Economic_Journal.pdf- Financial literacy and stock market participation: sciencedirect.com/science/article/abs/pii/S0304405X11000717- MEASURING THE FINANCIAL SOPHISTICATION OF HOUSEHOLDS: nber.org/system/files/working_papers/w14699/w14699.pdf - What Do the Portfolios of Individual Investors Reveal About the Cross-Section of Equity Returns?:papers.ssrn.com/sol3/papers.cfm?abstract_id=3795690- Investor Sophistication and the Home Bias, Diversification, and Employer Stock Puzzles: http://www-personal.umich.edu/~mkimball/keio/5.%20papers/sophist3%20copy.pdf- Presidential Address: The Cost of Active Investing: onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2008.01368.x- The Economic Importance of Financial Literacy: Theory and Evidence: gflec.org/wp-content/uploads/2014/12/economic-importance-financial-literacy-theory-evidence.pdf- Debt literacy, financial experiences, and overindebtedness: cambridge.org/core/journals/journal-of-pension-economics-and-finance/article/abs/debt-literacy-financial-experiences-and-overindebtedness/6140546AF9CA1BAC33FAE47F35C5C178- Investment Literacy, Overconfidence and Cryptocurrency Investment: papers.ssrn.com/sol3/papers.cfm?abstract_id=3953242- THE CAUSES AND CONSEQUENCES OF FINANCIAL FRAUD AMONG OLDER AMERICANS: https://crr.bc.edu/wp-content/uploads/2014/11/wp_2014-13.pdf- Financial literacy and fraud detection: tandfonline.com/doi/abs/10.1080/1351847X.2019.1646666- Individual differences in susceptibility to financial bullshit: sciencedirect.com/science/article/pii/S2214635022000193?via%3Dihub#tbl1- Measuring financial well-being: files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf- Financial Well-Being of the Millennial Generation: An In-Depth Analysis of its Drivers and Implications: gflec.org/wp-content/uploads/2019/12/Financial-Well-Being-of-the-Millennial-Generation-Paper-20191122.pdfBitcoin Awareness, Ownership and Use: 2016–20: bankofcanada.ca/wp-content/uploads/2022/04/sdp2022-10.pdfFINANCIAL LITERACY AND RETIREMENT PLANNING IN THE UNITED STATES: nber.org/system/files/working_papers/w17108/w17108.pdf------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.comFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
The Private Equity Pitch Ben Felix 2022-09-28 | According to Vanguard, private equity’s “significant illiquidity and market dynamics provide suitable investors the opportunity to earn long-term excess returns, while increasing portfolio diversification through expanded equity market coverage.”This is the private equity pitch in a nutshell. It’s obvious theoretically that Illiquid assets in markets that are more difficult to access would have higher expected returns and opportunities for managers to add value by bringing new information to the market, possibly even enough to justify the high fees, estimated at around 6 or 7% all-in.Timestamps:0:00 Intro1:26 Evaluating the performance of private equity is not straightforward3:30 My bone to pick with the 2014 paper6:09 Ludovic Phalippou’s insights to private equity8:02 Testing the diversification claim11:20 Main takeawaysReferenced in this video:Private markets rally to new heights: mckinsey.com/~/media/mckinsey/industries/private%20equity%20and%20principal%20investors/our%20insights/mckinseys%20private%20markets%20annual%20review/2022/mckinseys-private-markets-annual-review-private-markets-rally-to-new-heights-vf.pdfThe Performance of Private Equity Funds: academic.oup.com/rfs/article-abstract/22/4/1747/1567648?redirectedFrom=fulltextPrivate Equity Fund Debt: Capital Flows, Performance, and Agency Costs: papers.ssrn.com/sol3/papers.cfm?abstract_id=3410076Private Equity Performance: Returns, Persistence, and Capital Flows: onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2005.00780.xPrivate Equity Performance: What Do We Know?: onlinelibrary.wiley.com/doi/10.1111/jofi.12154An Inconvenient Fact: Private Equity Returns and the Billionaire Factory: joi.pm-research.com/content/30/1/11Private Equity's Diversification Illusion: Evidence From Fair Value Accounting: papers.ssrn.com/sol3/papers.cfm?abstract_id=2379170Private Equity Fund Valuation Management During Fundraising: https://www.hbs.edu/ris/Publication%20Files/23-013_00801cda-46cb-48ee-b6ff-c2b705a41a7a.pdfRush to Raise: Does Fundraising Pressure Incentivize Strategic Venture Capital Deal Pricing?: papers.ssrn.com/sol3/papers.cfm?abstract_id=3851819Interim Fund Performance and Fundraising in Private Equity: papers.ssrn.com/sol3/papers.cfm?abstract_id=2357570Replicating Private Equity with Value Investing, Homemade Leverage, and Hold-to-Maturity Accounting: academic.oup.com/rfs/article-abstract/35/1/299/6136189?redirectedFrom=fulltext------------------Follow Ben Felix on- Twitter: twitter.com/benjaminwfelixVisit Rational Reminder: rationalreminder.caJoin the Rational Reminder Community: community.rationalreminder.caFollow the Rational Reminder on:- Twitter: twitter.com/RationalRemind- Instagram: instagram.com/rationalreminderVisit PWL Capital: pwlcapital.com/teams/passmore-felixFollow PWL Capital on: - Twitter: twitter.com/PWLCapital- LinkedIn: linkedin.com/company/pwl-capitalYou can find the Rational Reminder podcast on Google Podcasts:google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNzApple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2Spotify Podcasts:open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA------------------
Luxury Vehicles and Happiness Ben Felix 2022-07-13 | An exciting new purchase may not be exciting for long, and the people around us are also seeking out positional goods. A fancy car feels less fancy when your friend gets a nicer one, and people are in a subconscious arms race to have the nicest stuff. This hedonic treadmill of conspicuous consumption is difficult to escape. An important question is whether people with luxury vehicles actually enjoy their vehicles more.Referenced in this video:The influence of positionality in car-purchasing behaviour on the downsizing of new cars: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.utwente.nl/en/et/ce/research/tem/pdf/2011_Hoen_Geurs_The_influence_of_positionality.pdfWhy don't we learn from poor choices? The consistency of expectation, choice, and memory clouds the lessons of experience: https://efaidnbmnnnibpcajpcglclefindmkaj/https://dornsife.usc.edu/assets/sites/780/docs/11_jcp_schwarz___xu_why_we_don_t_learn__fin_.pdfTemporal Adjustments in the Evaluation of Events: The ‘‘Rosy View’’https://sci-hub.se/https://doi.org/10.1006/jesp.1997.1333Luxury car owners are not happier than frugal car owners link.springer.com/article/10.1007/s12232-015-0223-2Balance andrewhallam.com/balanceThe Next Millionaire Next Door rowman.com/ISBN/9781493052752/The-Next-Millionaire-Next-Door-Enduring-Strategies-for-Building-Wealth ------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Are Good Companies Good Investments? Ben Felix 2022-06-22 | At first glance, investing seems like it should be easy. Just buy shares in “good companies”, sit back, and profit. As easy as it sounds, that’s not how investing works, and the “good company is a good investment” fallacy is something that every investor needs to understand.Referenced in this video:Stocks of Admired Companies and Spurned Ones: papers.ssrn.com/sol3/papers.cfm?abstract_id=1540757Glamour Brands and Glamour Stocks: papers.ssrn.com/sol3/papers.cfm?abstract_id=1571491Investor Sentiment, Stock Characteristics, and Returns: jpm.pm-research.com/content/37/3/54Contrarian Investment, Extrapolation, and Risk: papers.ssrn.com/sol3/papers.cfm?abstract_id=227016Valuation Bias and Limits to Nudges: jpm.pm-research.com/content/45/5/112Conditional Skewness in Asset Pricing Tests: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P56_Conditional_skewness_in.pdf------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
The Relevance of Dividend Irrelevance Ben Felix 2022-06-09 | Dividends are irrelevant as a predictor of differences in expected returns. Building investment portfolios based on dividends results in lower expected returns when yield is in high demand, a lack of diversification, tax inefficiency, and an arbitrary retirement spending rule dictated by corporations. Basing investment or consumption decisions on dividends does not make sense.Referenced in this video:The Dividend Disconnect: drive.google.com/file/d/15Z94LD8QTPbb0ETAixg_zMA0Ew5bdJat/viewSettling the Size Matter: drive.google.com/file/d/1G3daMZp3XbP0Qj1cG-p3VpcJzSYkmd1c/viewStock Market Returns and Consumption: drive.google.com/file/d/1kVBKtMWXgvlZ8bQzARgK91uhIbUBOXQC/viewConsuming Dividends: academic.oup.com/rfs/advance-article-abstract/doi/10.1093/rfs/hhac010/6530299Should You Chase Dividend Stocks to Combat Inflation and Rate Hikes?: dimensional.com/us-en/insights/should-you-chase-dividend-stocks-to-combat-inflation-and-rate-hikes------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
In Search of the Ultimate Inflation Hedge Ben Felix 2022-05-18 | When stuff and services get more expensive, your dollars can buy less of them. That’s called inflation, and it’s a problem because investors want to fund future consumption; if stuff gets more expensive you need to save more, spend less, or earn higher investment returns to meet your objectives.Referenced in this video:US Inflation and Global Asset Returns: papers.ssrn.com/sol3/papers.cfm?abstract_id=3882899The Best Strategies for Inflationary Times: jpm.pm-research.com/content/47/8/8/tab-article-infoValue and Interest Rates: Are Rates to Blame for Value’s Torments?: jpm.pm-research.com/content/47/6/65Duration-Driven Returns: papers.ssrn.com/sol3/papers.cfm?abstract_id=3359027Inflation Hedging with International Equities: jpm.pm-research.com/content/40/2/41The Golden Dilemma: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/nber.org/system/files/working_papers/w18706/w18706.pdfGold, the Golden Constant, COVID-19, 'Massive Passives' and Déjà Vu: papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: rationalreminder.ca Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Thematic ETFs (are Terrible Investments) Ben Felix 2022-05-04 | If you’re excited about an investment, it’s probably not a good investment.Listen to the Rational Reminder Episode 185: Lighting your Money on Fire with Thematic ETFs where we do a deeper dive of the topic:youtube.com/watch?v=libTTDzmVGwrationalreminder.ca/podcast/185Referenced in this video:Earnings Growth: The Two Percent Dilution: cfainstitute.org/en/research/financial-analysts-journal/2003/earnings-growth-the-two-percent-dilutionThe Big Market Delusion: Valuation and Investment Implications: tandfonline.com/doi/full/10.1080/0015198X.2020.1730655Overconfidence and Speculative Bubbles: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.princeton.edu/~wxiong/papers/bubble.pdfCompetition for Attention in the ETF Space: papers.ssrn.com/sol3/papers.cfm?abstract_id=3765063Betting against Quant: Examining the Factor Exposures of Thematic Indexes: jii.pm-research.com/content/12/3/5------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Investing in Emerging Markets Ben Felix 2022-04-19 | The term “Emerging Markets” was coined in 1981 by the International Finance Corporation as a marketing term to help make the case for foreign investors investing in developing economies. Today, emerging markets make up roughly 10-12% of the global market capitalization representing around 25 countries including China, Taiwan, India, South Korea, and, until recently, Russia.Characteristics like high economic growth expectations and attractive valuations compel some investors to overweight emerging markets in their portfolios, but there are some often overlooked facts, costs, and risks that should be carefully considered.Referenced in this video:Establishing ‘Emerging Markets’: ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc_new/ifc+history/establishing-emerging-marketsIs Economic Growth Good for Investors? : http://csinvesting.org/wp-content/uploads/2015/05/Jay_Ritter_paper_14_August-Economic-Growth-and-Stock-Returns.pdfEarnings Growth: The Two Percent Dilution: researchaffiliates.com/content/dam/ra/documents/FAJ-2003-Two-Percent-Dilution.pdfForeign Speculators and Emerging Equity Markets: https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P64_Foreign_speculators_and.pdfEquity Market Liberalization in Emerging Markets: https://public.kenan-flagler.unc.edu/faculty/lundblac/equity_market_liberalization.pdfWhat Segments Equity Markets?:https://www8.gsb.columbia.edu/sites/financialstudies/files/files/equity.pdfDrivers of Expected Returns in International Markets:https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P69_The_drivers_of.pdfConditional Skewness in Asset Pricing Tests: https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P56_Conditional_skewness_in.pdf------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Stocks, Bonds, and War Ben Felix 2022-03-29 | Wars and financial markets have coexisted, and often been intertwined, for hundreds of years. Countries that have lost major wars have had their financial markets decimated, while global markets have been relatively resilient, even to major conflicts. Despite the relative resilience of global markets, crises and wars tend to reduce global market returns and increase their volatility.Special Rational Reminder episode: rationalreminder.ca/podcast/special-episode-stock-bonds-and-warReferenced in this video:War, Peace and Stock Markets: papers.ssrn.com/sol3/papers.cfm?abstract_id=885980ICB Project: https://sites.duke.edu/icbdata/WHY DOES STOCK MARKET VOLATILITY CHANGE OVER TIME?: nber.org/system/files/working_papers/w2798/w2798.pdfEarning from History? Financial Markets and the Approach of World Wars: https://www.brookings.edu/wp-content/uploads/2008/03/2008a_bpea_ferguson.pdfThe General Theory of Employment: macroeconomiauca.files.wordpress.com/2012/05/keynes_general_theory_of_employment_qje_1937.pdf------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Renting vs Buying a Home: How to Decide Ben Felix 2021-11-02 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pMaking the housing decision requires careful consideration of both the financial and non-financial impacts, and the way that they interact with each other. There is no universally right way to approach housing. In many cases, contrary to conventional wisdom and societal pressure, renting is a better option than owning, both financially and from the perspective of subjective well-being.Referenced in this video:Extrinsic Value Orientation and Affective Forecasting: Overestimating the Rewards, Underestimating the Costs sdtheory.s3.amazonaws.com/SDT/documents/2010_SheldonGunzNicholsFerguson_JOP.pdfDoes the Dream of Home Ownership Rest Upon Biased Beliefs? A Test Based on Predicted and Realized Life Satisfaction papers.ssrn.com/sol3/papers.cfm?abstract_id=3660256The American Dream or the American Delusion? The Private and External Benefits of Homeownership for Women papers.ssrn.com/sol3/papers.cfm?abstract_id=1877163Homeownership and Happiness: Evidence for Switzerland https://digitalcollection.zhaw.ch/bitstream/11475/18640/3/2019_Hofmann-Umbricht_Homeownership-and-happiness-Switzerland_SREJ.pdfThe relationship between homeownership and life satisfaction in Germany https://www.econstor.eu/bitstream/10419/51372/1/672468557.pdfIs a Fixer-Upper Actually a Downer? tandfonline.com/doi/full/10.1080/10511482.2017.1367317If Money Doesn't Make You Happy Then You Probably Aren't Spending It Right https://scholar.harvard.edu/files/danielgilbert/files/if-money-doesnt-make-you-happy.nov-12-20101.pdfThe relative relativity of material and experiential purchases pubmed.ncbi.nlm.nih.gov/20053039The McMansion Effect: Top House Size and Positional Externalities in U.S. Suburbs papers.ssrn.com/sol3/papers.cfm?abstract_id=3378131Book: Happy Money dunn.psych.ubc.ca/book-happy-moneyShelter in the Canadian CPI: An overview www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htmTheory of Homes and Jobs warwick.ac.uk/fac/soc/economics/staff/ajoswald/homejobs.pdf------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Will Climate Change Crash the Stock Market? Ben Felix 2021-10-09 | A changing climate creates physical risk potentially affecting businesses, communities and the economy. Changing weather patterns, and previously habitable areas becoming uninhabitable due to temperature or flooding are examples of the physical risks of climate change. The transitional risk of climate change arises from the response of consumers and governments to climate change. The possibility that consumers will demand a lower carbon impact from products and services, and that governments will introduce regulations or taxes designed to reduce emissions, creates meaningful uncertainty for businesses.Timestamps:0:00 Climate change in asset prices3:11 Is climate risk priced in the way that Pastor’s model suggests? 6:11 Transitional risk observed in asset prices8:23 Carbon-intensive firms in portfolios10:57 My final thoughtsReferenced in this video:Sustainable Investing in Equilibrium: papers.ssrn.com/sol3/papers.cfm?abstract_id=3498354Market Expectations About Climate Change: papers.ssrn.com/sol3/papers.cfm?abstract_id=3336506An Inconvenient Cost: The Effects of Climate Change on Municipal Bonds: papers.ssrn.com/sol3/papers.cfm?abstract_id=3167379Disaster on the Horizon: The Price Effect of Sea Level Rise: papers.ssrn.com/sol3/papers.cfm?abstract_id=3073842Science and the Stock Market: Investors’ Recognition of Unburnable Carbon: papers.ssrn.com/sol3/papers.cfm?abstract_id=2362154Environmental Externalities and Cost of Capital: papers.ssrn.com/sol3/papers.cfm?abstract_id=1677653Carbon Tail Risk: papers.ssrn.com/sol3/papers.cfm?abstract_id=3204420Climate Regulatory Risks and Corporate Bonds: papers.ssrn.com/sol3/papers.cfm?abstract_id=3563271Greenhouse Gas Emissions and Expected Returns: papers.ssrn.com/sol3/papers.cfm?abstract_id=3714874Five Factor Investing with ETFs: pwlcapital.com/resources/five-factor-investing-with-etfs------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: rationalreminder.ca Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Commission-Free Day Trading Ben Felix 2021-09-25 | Day trading has become a popular pastime. Being stuck at home during the pandemic probably played a role, but the explosion in price from a handful of so-called meme stocks is what got everyone’s attention; it was like a modern day gold rush.Timestamps: 0:00 Trading with Today’s Tech 2:00 Robinhood Investors4:23 The Impact of Trading on a Mobile App5:58 The Perception of Free Trades9:50 Final Thoughts----------------Referenced in this video:Sensation Seeking, Overconfidence, and Trading Activity - nber.org/system/files/working_papers/w12223/w12223.pdfTrading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors - https://faculty.haas.berkeley.edu/odean/Papers%20current%20versions/Individual_Investor_Performance_Final.pdfRobinhood Has Lured Young Traders, Sometimes With Devastating Results - nytimes.com/2020/07/08/technology/robinhood-risky-trading.htmlSmart(Phone) Investing? A within Investor-time Analysis of New Technologies and Trading Behavior. - nber.org/papers/w28363Robinhood Markets, Inc. S-1 - sec.gov/Archives/edgar/data/1783879/000162828021013318/robinhoods-1.htmPredictable behavior, profits, and attention - http://www.seasholes.com/uploads/3/2/0/6/32066083/seasholes_wu_2007_jef.pdfAll That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors - academic.oup.com/rfs/article-abstract/21/2/785/1607197?redirectedFrom=fulltextAttention Induced Trading and Returns: Evidence from Robinhood Users - papers.ssrn.com/sol3/papers.cfm?abstract_id=3715077------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Investing in Happiness Ben Felix 2021-08-28 | Money has the unique ability to move economic value through time; money made from work done today can be used to fund spending in the future. Time and money are both finite resources that we have to make allocation decisions about on a daily basis. There is no objectively optimal way to allocate time and money, but I am going to argue that for human investors these decisions should be anchored in the objective of living a happy life, so we need to know where happiness comes from.Timestamps:0:00 How much is enough?1:03 What is Happiness?4:04 PERMA and Well-Being6:22 Time, money, and happiness9:48 Spending money for happiness11:42 The Four Cs13:13 Setting anti-goals and the Five Factors of Well-Being------------------ Sources in order of mentionFunctional imaging of neural responses to expectancy and experience of monetary gains and losses pubmed.ncbi.nlm.nih.gov/11395019The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom happinesshypothesis.comPositive Psychology: The Science of Well-Being uk.sagepub.com/en-gb/eur/positive-psychology/book243503PERMA™ Theory of Well-Being https://ppc.sas.upenn.edu/learn-more/perma-theory-well-being-and-perma-workshopsThinking Fast and Slow us.macmillan.com/books/9780374533557Happiness, income satiation and turning points around the world nature.com/articles/s41562-017-0277-0Time Smart awhillans.com/new-book-ndash-time-smart.htmlIf Money Doesn't Make You Happy Then You Probably Aren't Spending It Right https://scholar.harvard.edu/files/danielgilbert/files/if-money-doesnt-make-you-happy.nov-12-20101.pdfThe Geometry of Wealth harriman-house.com/geometry-of-wealthThe End of History Illusion science.sciencemag.org/content/339/6115/96Rational Reminder Podcast episodes mentioned:rationalreminder.ca/podcast/102rationalreminder.ca/podcast/143Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: rationalreminder.ca Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
What is (Good) Financial Advice? Ben Felix 2021-04-24 | Before I describe what constitutes good financial advice, let me start with what doesn’t. When I say that investing has been solved, I am, of course, talking about low-cost index funds beating most other investing strategies over most time periods. Academic literature going back to the 1960s has consistently found that trying to beat the market index is a losing game on average. Most investors are best-served owning the market and keeping their costs low.Timestamps: 0:00 "Ben, why do you still have a job?"1:00 What isn't Financial Advice?3:08 What is Financial Advice?10:36 Should you get Professional Financial Advice?12:19 Reasons to Seek Expert Advice------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: rationalreminder.ca Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Five Factor Investing with ETFs Ben Felix 2021-03-27 | Meet with PWL Capital: calendly.com/d/3vm-t2j-h3pBefore attempting to implement these portfolios, please read this: Why It Would Be Ludicrous To Invest In These Model Portfolios boomerandecho.com/why-it-would-be-ludicrous-to-invest-in-these-model-portfoliosLarger companies like Apple and Tesla make up a larger portion of the market compared to smaller companies, and these relative weights are reflected in a market capitalization weighted index fund. Letting the market dictate your portfolio weights has lots of advantages, but pushing the fundamental logic behind index investing one step further leads to the potential for significant improvements in portfolio construction.Referenced in this video:Five Factor Investing with ETFs: pwlcapital.com/resources/five-factor-investing-with-etfsThe relationship between return and market value of common stock: sciencedirect.com/science/article/abs/pii/0304405X81900180A Five-Factor Asset Pricing Model: papers.ssrn.com/sol3/papers.cfm?abstract_id=2287202Timestamps: 0:00 Market Capitalization Weighted Index Fund Explained1:00 The Efficient Market Hypothesis3:25 Let’s Get Back to Basics4:51 Capital Asset Pricing Model (CAPM)6:40 Empirical Anomalies in the Market8:56 Risk Premiums12:30 What I do with my Own Money------------------ Follow Ben Felix on - Twitter: twitter.com/benjaminwfelix - LinkedIn: linkedin.com/in/benjaminwfelix Visit Rational Reminder: www.https://rationalreminder.ca/ Follow the Rational Reminder on: - Twitter: twitter.com/RationalRemind Visit PWL Capital: pwlcapital.com/teams/passmore-felix Follow PWL Capital on: - Twitter: twitter.com/PWLCapital - Facebook: facebook.com/PWLCapital - LinkedIn: linkedin.com/company/pwl-capital You can find the Rational Reminder podcast on Google Podcasts: google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
