The Cautionary Tale of Backtesting in ETF Investing

This chapter examines the principles of backtesting investment strategies, especially regarding ETFs, while emphasizing the importance of not solely relying on historical performance. It advocates for a diversified portfolio to navigate unpredictable market trends and prepare for varied future conditions.

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By popular demand, Stig Brodersen has invited back investment expert Cullen Roche. They discuss how to execute on the best possible ETF strategy.

IN THIS EPISODE, YOU’LL LEARN:

01:43 - Which ETF strategy is right for you?
06:49 - Why there is no such thing as passive investing?
12:17 - How does an ETF technically work, and why is it a tax-efficient investment instrument.
22:18 - What is the difference between the gross and net expense ratio?
26:16 - Should you pay attention to backtesting results when you choose which ETF to invest in?
31:05 - How do you launch your own ETF?
40:12 - Are retail ETF investors at a disadvantage compared to institutional investors?
45:29 - How much does it cost to run an ETF?
48:35 - How to think about fund of funds.
53:27 - Why should you invest in long-term bonds in today’s environment?
1:00:14 - Which implication has the interest rate on ETF investing?

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Stig’s interview with Cullen Roche about Inflation Masterclass.
Cullen Roche’s website, The Discipline Funds.
Cullen Roche’s website, Pragmatic Capitalism.
Tweet directly to Cullen Roche.
Email Cullen at cullenroche@orcamgroup.com.
Read the 9 Key Steps to Effective Personal Financial Management.

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