Passive Investing: Is Active Investing (finally) Dead? (SB1493)
Mar 22, 2024
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Experts debate the rise of passive index funds over actively managed ones, exploring the benefits and risks. They discuss the shift towards passive strategies, industry trends, and challenges faced by financial advisors. The podcast also features playful banter, humor, and a trivia challenge related to French leaders. Additionally, the discussion delves into deceptive practices in investing and MLM schemes, offering insights on navigating different investment options and strategies.
Moving towards passive investing for cost efficiency and better client outcomes.
Assess historical fund performance to evaluate the impact of management fees on investment choices.
Effective communication is crucial for navigating financial conversations and shared investments in relationships.
Deep dives
Napoleon's Height in Dollars
Napoleon Bonaparte was known for his small stature and his height was famously questioned. If every inch of his height was equivalent to a dollar, Napoleon stood at 5 feet and 6 inches tall.
Passive vs. Active Investments
The discussion delved into the debate of passive versus active investment strategies. Passive investments involve participating in the market without trying to beat it, like investing in index funds, while active investments aim to outperform the market by actively trading and making investment decisions.
Financial Advisor Strategies
Financial advisors have been slow to adopt passive strategies due to various factors like client holdings in active funds, loyalty to certain fund families, and potential conflicts of interest. However, as more advisors move towards independence, there is a growing trend towards passive strategies for cost efficiency and better client outcomes.
Active vs. Passive Investing - Clarifying the Debate
The podcast hosts engage in an insightful discussion on the debate between active and passive investing. By exploring the role of actively managed ETFs, they highlight the potential influence of management fees on investment choices. They emphasize the importance of assessing the historical performance of funds as a clue to determine the value of management fees. The conversation sheds light on the complexities of investment decisions guided by past performance and cost considerations.
Navigating Relationships and Money Dynamics
The episode delves into the intricate dynamics between love, money, and power within relationships. Through insights shared by the hosts, the episode underscores the significance of effective communication around financial matters among couples. It emphasizes the unique challenges and identities intertwined with money discussions, offering a fresh perspective on navigating financial conversations within relationships. The hosts discuss the complexities of balancing individual financial goals and shared investments, providing valuable guidance on fostering productive financial dialogues in relationships.
Is the battle between index funds and actively managed funds finally over? Total assets invested in index funds and ETFs recently passed assets invested in active funds for the first time ever. But is going all index funds the right move for you? Joining us is CFP and President of Bona Fide Wealth, Douglas Boneparthe. Also joining us is Crystal Hammond, host of our sister show, Stacking Deeds. And finally joining us from his bunker deep under Los Angeles is the creator of the award-winning blog lenpenzo.com, Len Penzo.
We dive into the difference between active and passive funds, break down the history of each, and pontificate on where we think the investment world is heading. Plus, what are the risks of cap-weighted index funds?
In the second half of the show, sponsored by DepositAccounts.com, we dive into the industry secrets and their smoke-and-mirrors tricks.
Be sure to stick around for our ongoing year-long trivia competition. Doug brings us some diminutive French leader-themed trivia. You won't want to miss it!
