How to determine whether you should invest in a complex investment such as an actively managed ETF that uses option strategies. Topics covered include: A recent investment David made that he shouldn't have What is the volatility risk premium and how to invest in it Why there have been over 200 new ETFs and ETNs launched in the U.S. in 2020 Why some ETF sponsors launch lower cost versions of ETFs that compete with their existing offerings. What questions to answer as part … [Read more...]
306: Three Approaches to Asset Allocation
What are the three primary ways to allocate assets and build a portfolio when saving for retirement or living in retirement. Topics covered include How saving for retirement and living in retirement differ. What are the expected return and risk of the Permanent, Golden Butterfly, and All Season portfolios. What are the pros and cons of a role-based permanent portfolio. What are the pros and cons of a strategic portfolio mix, such as the Bogleheads Three Fund Portfolio What … [Read more...]
195: Has A Trade War Begun?
Why duties and other actions are necessary to address trade disputes, but across the board tariffs are a blunt instrument that can lead to a devastating trade war and global recession. In this episode you’ll learn: Why trade deficits are not always bad.How frequently has the U.S. government taken trade actions to protect national security.To what extent have steel and aluminum imports harmed U.S. domestic producers.What are the risks of using across the board tariffs … [Read more...]
158: How To Invest Like A Cockroach
How reserves, slack and simple rules of thumb help us deal with radical uncertainty. Why the next financial crisis is unlikely to be like the last one. Photo by Ian Jacobs In this episode you’ll learn: Why the world can't be solved but has to be lived. How slack and following rules of thumb can help us deal with radical uncertainty What are water rights. What is an emergent phenomena. How to invest like a cockroach. Show Notes The End of Theory: Financial Crisis, … [Read more...]
152: You Know Less Than You Think
How simple rules, just-in-time learning and checking your understanding can help you make better financial decisions. In this episode you'll learn: How we rely on the environment and other people to think. Why we aren't overwhelmed by complexity. What are the downsides of drawing on a community of knowledge and to mitigate them. The importance of simple rules and just-in-time learning. Show Notes The Stranger in The Woods: The Extraordinary Story of the Last True … [Read more...]
129: Finding Simplicity On The Other Side of Complexity
Why we need to embrace complexity in order to find lower cost, less stressful solutions to challenges including with investing. Plus is investing moral? Photo by Joao Silas In this episode you'll learn: How ETFs and index funds reduce portfolio complexity. How we know if we have achieved simplicity on the other side of complexity. Is investing immoral such as owning ETFs that hold positions in pharmaceutical companies that benefit from opioid addiction? How much do you … [Read more...]
100: Navigating a Negative Carry World
What Harrison Ford can teach you about investing and living in a radically unpredictable, low investment return world. Photo by Fortune Live Media In this episode you'll learn: What is the primary narrative driving markets today.What are the two things that never change with markets.What is positive and negative carry.Why central banks implement negative interest rates.How low are interest rates around the world.How do we invest and live in a radically unpredictable, negative carry … [Read more...]
63: Alarmists and the Economics of Collapse
Why economic alarmists are dangerous, and what has to happen for the financial system or economy to collapse. Photo by Justin Kern In this episode you'll learn: What is an alarmist.What is confirmation bias.What is the velocity of money what influences it.What are purchasing manager indices (PMI) and how do they correlate to the direction of the economy.What is the cyclically adjusted price-to-earnings (CAPE) ratio and how long has it taken for markets sell-offs to … [Read more...]
MNY058 Plus: Complexity, ETFs and the Midnight Sun
In this week's Money For the Rest of Us Plus episode, I discuss Cod fishing in the dark. The midnight sun. Non-linearity, networks, genes and genetically engineered crops. The complexity of ETFs The episode length is 12 minutes. … [Read more...]
MNY031 Plus: Luck versus Skill
In this week's Money For the Rest of Us Plus episode, I discuss: Boethius' view on luck, skill, fate and providence from his book written in the early Middle Ages and how he foreshadowed complex adaptive systems. How complex systems have local uncertainty and global certainty. What is a narrative fallacy. How creativity functions within a complex adaptive system. The episode length is 17 minutes. … [Read more...]
