Episode 259: Comprehensive Overview: Estimating Expected Returns
The Rational Reminder Podcast
The Importance of Historical Data in Financial Planning
Long term historical data, even though we might think the world's changed or whatever, is still highly relevant to today. A lot of the observed return from 1945 until now comes with the price to earning ratio rising. Next let's hear from Professor John Cochran on how he thinks about expected returns.
Join us as we present a compilation of segments on expected returns and the dynamics that shape investment outcomes. We deep dive into the world of financial predictions and gain a comprehensive understanding of how expected returns influence your financial decision-making. We also go back to the episode with Dr. Brian Portnoy where we delved into his book, The Geometry of Wealth. Lastly, joining our conversation is our colleague Matt Gour who discusses The Power of Moments by Chip and Dan Heath. We discuss how extraordinary moments have the power to shape our lives and the pivotal importance of crafting unforgettable experiences. Tune in now!
Key Points From This Episode:
- What Pressor Fama had to say about expected returns. (0:03:35)
- Looking at returns through a historical lens with Professor Goetzmann. (0:08:23)
- Professor Cederburg explains the usefulness of historical data. (0:11:38)
- Hear Professor Cochrane’s perspective on expected returns. (0:15:19)
- Professor Cornell shares his contrasting view on historical returns. (0:23:41)
- We recap our discussion with Professor French about uncertainty. (0:34:23)
- Breaking down the conventional viewpoint of uncertainty with Professor Pastor. (0:38:34)
- A brief overview of our approach to estimating expected returns. (0:44:03)
- Highlights from our conversation with Dr. Brian Portnoy about his book. (0:47:56)
- Matt Gour joins us for our weekly book review of The Power of Moments. (0:51:15)
- He shares an impactful moment from his childhood. (0:54:04)
- We unpack a main takeaway from the book: the peak-end rule. (0:56:23)
- The four elements needed to create a defining moment. (0:57:51)
- Learn about the different types of defining moments. (1:01:02)
- How to be deliberate about creating powerful moments. (1:01:02)
- Main takeaways from the book. (1:04:55)
- The aftershow, planned meetups, upcoming projects, and more. (1:07:15)
Participate in our Community Discussion about this Episode:
Book From Today’s Episode:
The Geometry of Wealth: How to shape a life of money and meaning — https://amzn.to/46qpjl5
The Power of Moments: Why Certain Experiences Have Extraordinary Impact — https://amzn.to/3pmYJJb
Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/
Shop Merch — https://shop.rationalreminder.ca/
Join the Community — https://community.rationalreminder.ca/
Follow us on Twitter — https://twitter.com/RationalRemind
Follow us on Instagram — @rationalreminder
Nick Maggiulli on Instagram — https://instagram.com/nickmaggiulli
Benjamin on Twitter — https://twitter.com/benjaminwfelix
Cameron on Twitter — https://twitter.com/CameronPassmore
'Financial Planning Assumptions for Market-Cap Weighted and Factor Tilted Portfolios – Methodology Guide' — https://www.pwlcapital.com/resources/financial-planning-assumptions-for-market-cap-weighted-and-factor-tilted-portfolios-methodology-guide/
Episode 38: Feelings in the Decision Making Process — https://rationalreminder.ca/podcast/38
Episode 92: Dr. Moira Somers and Dave Goetsch — https://rationalreminder.ca/podcast/92
Episode 100: Professor Kenneth French — https://rationalreminder.ca/podcast/100
Episode 102: Dr. Brian Portnoy — https://rationalreminder.ca/podcast/102
Episode 124: Professor Lubos Pastor — https://rationalreminder.ca/podcast/124
Episode 151: Professor Brad Cornell — https://rationalreminder.ca/podcast/151
Episode 169: Professor John Cochrane — https://rationalreminder.ca/podcast/169
Episode 189: Regret (and How to Read More w/ Neil Pasricha) — https://rationalreminder.ca/podcast/189
Episode 200: Professor Eugene Fama — https://rationalreminder.ca/podcast/200
Episode 224: Professor Scott Cederburg — https://rationalreminder.ca/podcast/224
Episode 248: Professor William Goetzmann — https://rationalreminder.ca/podcast/248
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