The Most Important Lessons in Investing | Rational Reminder 299
Вставка
- Опубліковано 9 чер 2024
- Meet with PWL Capital: calendly.com/d/cpws-jyp-znp
In this episode, we unpack key tenants of investing and the quality of financial advice in Canada's banking industry. In our conversation, we present a list of lessons we have learned about investing, which has been consolidated from contributions by the Twitter community and the Rational Reminder Community. In our conversation, we discuss ways to beat the market, how narratives can impact the economy, and why timing the market is a bad investment approach. Discover why performance chasing is not a successful strategy, why incentives matter, and why economic growth is a poor predictor of investment success. Learn about the nuanced relationship between expected economic growth and stock returns, why wealth does not give you access to market-beating investments, and the effectiveness of investing in low-cost total market index funds. Finally, in our after-show segment, we delve into the quality of fifinancial advice provided by Canada's six big banks, investment strategies, listener reviews, and much more. Gain valuable insights into navigating the complexities of investing and learn why simplicity, discipline, and skepticism towards overly complex or costly strategies are vital for financial success. Tune in now!
Book a meeting with a PWL Financial Planner - calendly.com/d/3vm-t2j-h3p
Timestamps:
0:00:00 Intro
0:04:26 Main Topic: The Most Important Lessons in Investing
0:05:33 #1: You're not That Smart Relative to the Market
0:08:45 #2: This Time is Always Different
0:12:09 #3: The Market is Forward-Looking
0:13:55 #4: Market Forecasts are not Useful
0:15:34 #5: Time in the Market Beats Timing the Market
0:18:06 #6: Most Funds do not Beat the Market
0:21:39 #7: Incentives Matter
0:28:06 #8: Expected Economic Growth and Stock Returns are not Related
0:30:41 #9: Good Portfolio Management does not Make up for Bad Financial Planning
0:34:24 #10: Risk and Expected Returns are Positively Related
0:36:17 #11: The Risk-Expected Return Trade-Off has a Term Structure
0:39:07 #12: Fees and Taxes Matter
0:45:21 #13: Complexity and Costs are Positively Related
0:47:19 #14: There is no Single Optimal Investment Strategy
0:50:44 #15: The Best Investment Strategy for You is the One that You can Stick With
0:52:56 #16: There is no Such Thing as a "Passive" Investment
0:57:49 #17: Wealth does not Give You Access to Market-Beating Investments
1:00:29 #18: Diversification is the Only Free Lunch in Investing
1:07:11 #19: Investments Should Be Evaluated on Process, not Outcome
1:09:27 #20: Investing has been Solved
1:11:21 Aftershow
Links From Today’s Episode:
Rational Reminder on iTunes - itunes.apple.com/ca/podcast/t....
Rational Reminder Website - rationalreminder.ca/
Rational Reminder on Instagram - / rationalreminder
Rational Reminder on X - / rationalremind
Rational Reminder on UA-cam - / channel
Rational Reminder Email - info@rationalreminder.ca
Benjamin Felix - www.pwlcapital.com/author/ben...
Benjamin on X - / benjaminwfelix
Benjamin on LinkedIn - / benjaminwfelix
Cameron Passmore - www.pwlcapital.com/profile/ca...
Cameron on X - / cameronpassmore
Cameron on LinkedIn - / cameronpassmore
Mark McGrath on LinkedIn - / markmcgrathcfp
Mark McGrath on X - / markmcgrathcfp
The Economist - www.economist.com/
ARK Invest - ark-funds.com/
The Canadian Investor Podcast - thecanadianinvestorpodcast.com/
Episode 257: Giorgio Ugazio (Mr. RIP) - rationalreminder.ca/podcast/257
Mr. RIP on UA-cam - / @mr_rip
The Money Scope Podcast: Episode 9 - moneyscope.ca/2024/03/15/epis... investing-in-canada/
Books From Today’s Episode:
A Wealth of Well-Being - www.amazon.com/Wealth-Well-Be...
Behavioral/dp/1394249675
Wealthier - wealthierbook.com/
Papers From Today’s Episode:
‘Where’s the Beef?’ - papers.ssrn.com/sol3/papers.c...
‘SPIVA® Canada Scorecard’ - www.spglobal.com/spdji/en/doc...
canada-year-end-2023.pdf - Навчання та стиль
I'm very high conviction that this was a great episode!
amazing episode! you guys are great. Big thanks from Italy
Probably the best episode in the history of the podcast. Phenomenal work.
Amazing episode,, amazing list! I was expecting at least an entry about "individual bonds vs bond ETFs" (a topic I'm exploring at the moment), but I'll keep waiting :)
I love the new "setup" (with Mark), but my "risk management mental processor" tells me "wait, does it mean Cameron wants to retire?" Please don't!
And of course I like (a lot, maybe even more that the others) your guestless episodes, with deep dives and rationality buffet.
and, of course, thanks for the mention :)
P.S. update the end screen on UA-cam (add Mark!)
Love the feedback, thank you so much!
Ben had a great video on bond diversification that convinced me to mix domestic and international aggregate bond ETFs when the goal is stabilizing a portfolio, and use individual bonds/GICs for short term investing for expected near-future purchases.
Edit: the video is Bond Funds vs. GICs
Great episode and love the new format.
You should make this into a book!
This episode is excellent, thanks!
Indeed, Mark is a great addition to the podcast :)
Means a lot, thank you!
Great stuff!
This was a fantastic episode! Listened to the podcast then came to watch it again on youtube so I can get a list of the 20 points and make some notes. Thanks!
52:00 Dividend investing: of all the worst investment strategies, it's the best.
One of your best episodes to date, keep up the good work!
very practical advices!
Superb. Love the list
With respect to diversification the insight provided by prof. Scott Cederburg is still reverberation in my head: diversification of equity denominated in different currencies with a home country bias protecting purchasing power better than diversification with bonds.
Ref many times in comments w/these and Ben’s videos incl his take on the study. It’s avail online. I like to read orig studies and reports myself but that’s me.
I am building a blog on investing for the do-it-yourself crowd. You just gave me the next 20 blog titles. OK, that's a slight exaggeration, but this is still exemplary material and food for much thought and commentary. thanks again
This is exciting !
I'm curious as to how would you go about explaining the returns of multi-manager platforms such as Millenium, Schonfeld, Balyasny, Citadel, Point72, etc.
Given that, in theory, their returns are factors constrained and Beta neutral.
The best portfolio is the one you can stick with.
Would appreciate a show on Direct Indexing
Will you ever have Dan Bartolotti on from PWL about his book?
He’s booked for later this year.
-Ben
When in the aftershow the banks were discussed, I was struck by my perception that the Canadian insurance companies (big into offering employers retirement savings platforms for their employees) are perhaps even more corrupt with their investment offerings. Often a new employee is given nothing more than a select list of funds to choose from with absolutely no discussion or advice. Sadly many employees almost blindly select their investments and then think they've addressed their retirement planning. They then let the years go by without any review or consideration of their actual needs or objectives. At least with the banks there's usually someone to talk to.
I think it would be interesting for firms to hire a financial advisor/planner internally, and have them work only with employees of the company. Would likely increase loyalty to the company, improve employee outcomes, ensure they have appropriate insurance, etc.
@@MarkMcGrathCFP Mark, while companies like Sun Life do have staff who can give advice, in my experience reality is that most new employees aren't offered much personalised information or help with the many decisions. Sadly many just don't bother even when there's a generous match. It really does seem there is an opportunity for fee-only advisors to provide financial planning seminars to companies. No doubt a challenge would be having the advise constrained by the group plans many employers already have in place. Still, there's lots of education that could help employees. Finding employers who'd pay for a seminar might be difficult.
At 1:02:30, Ben mentions in passing that wealth creation is different from returns in a portfolio. I don't understand the difference. Can someone shed some light on this?
Love your work! Would it be interesting to make an episode regarding expected stock returns in aging populations/countries - which is most of the developed World? Thanks!
I have been investing for 4 years, I'm up 900%, mostly on swing trades. All I do is look at actual real world usefulness of a relatively small company and buy when they are cheap or some panic selling happened, usually rotating over a few. It's so odd, this seems easy, but then I hear Felix, who is clearly very smart, saying this is impossible... It really makes me wonder if I'm delusional or something, it really is easy to know good companies and rationally buy capitalizing on others emotions. Most of the work is actually risk management.
Peter Magellan sounds like someone Captain Planet would have thrown hands at on a Saturday morning 😂
🔥 ❤
I was a little unsure, was the episode about investing in a corporation upcoming on RR, or somewhere else?
The Money Scope
Mark is great. Keep him
I think we might. Still deciding. 😂
-Ben
@@rationalreminder I downvoted this comment
What is the market actually predicting? Company performance? stock price? people's perception of companies? is it predicting its own future predictions?
When AMC was $230 was the market right? The answer can be yes, what I don't know is what was it right about? Me thinking the price was silly doesn't mean I could make money.
The lesson for me is that short term prices are very rarely based on fundamentals.
Did I miss something? When did Ben move from wildwoods Ottawa to Quebec?
Peter Magellan 😆
Looks like they don't respect the legendary Peter Lynch...
@@sheldoncooper0 to be fair they corrected me very quickly, it was only me that got it wrong 🤣
1:05:25 @Cameron Passmore compound conviction marketing(tm) 😂
Looks like Ben doesn't respect Peter Lynch....
OK Ben so if everyone or the majority of investors out there followed your advice and just bought the low cost broad index fund wouldn't it become easier for the good fund managers to consistently beat them?
Wouldn't the market become more predictable and less efficient?
For your strategy to win in the long term don't you need this consistent group of people who don't follow your strategy? Otherwise who would you get ahead of?
See today’s episode:
Michael Green: Market Efficiency Is Not The Question | Rational Reminder 302
ua-cam.com/video/ON6U6IMn8GI/v-deo.html
12:08 if you have information that's not priced in it's likely illegal 😂
Or you are a politician 😂
@@minasmina2700 yeah, and it should be illegal for them to trade on that information, just like it is for me trading my employer stock around the closure of the quarter.
You think holding VTI and AVUV in a roth IRA a good idea? 33 years old domiciled in USA.
@@precisi0n86 thanks, voo or vti?
If you just want US exposure VTI is better than VOO but there is a good argument for international diversification through VXUS or even VT(all in one)
I personally hold VT AVUV and AVDV
@@midnightsun24c7 AVUS, AVDE AVEM or DFAC + DFAX are also worth a look if you like Avantis and DFA. Not making any recommendations, just pointing out broadly diversified funds that are worth a look.
Good to see Mark has become acclimatized.
Thanks!
Tenets not tenants!
Never criticize the almighty dividend!!!!!