Why we need distinct risk buckets: balancing our natural loss aversion with the allure of opportunities that offer the potential for massive upside. Topics covered include: What is modern portfolio theory, and what are some of its flaws Why so many people have gotten wealthy by being undiversified How to balance personal risk, market risk, and aspirational risk How prospect theory explains our attraction to positively skewed opportunities Why most people won't get wealthy … [Read more...]
485: Should You Invest in Defined Outcome (Buffer) ETFs?
Buffer ETFs protect against the downside while capping the upside. We examine them closely to see if they are worth it. Topics covered include: How buffer ETFs are structured and some current examples How buffer ETFs have performed over the past five years What are the risks of buffer ETFs How loss aversion and narrow framing contribute to the popularity of buffer ETFs Are buffer ETFs worth it and what are some alternative strategies that could be used instead Show … [Read more...]
