In this episode, we are joined by the CIO of Avantis Investors, Eduardo Repetto, to have an in-depth conversation about his philosophy and approach to many of the central concepts that are important to our listeners. Eduardo weighs in on asset pricing factor investing, premiums, and also shares some of his perspectives on what makes Avantis different from its competitors. Eduardo's wealth of experience and technical know-how make this very practical exploration, complete with some inventive and demonstrative analogies. Despite the high-level concepts discussed, our guest's ability to communicate these in an accessible manner also helped maintain a level of approachability throughout. Toward the end of the episode, we get to hear a little about Eduardo's Ph.D. in aeronautics and some of the surprising overlaps he sees between his two fields of interest.   Key Points From This Episode: Eduardo's approach to communicating what Avantis can offer their clients. (0:02:57) Advantages of the ETF structure for managing portfolios. (0:05:07) Advice for investors for quantitatively assessing the expected return advantage of a factor-tilted portfolio. (0:10:26) Practical approaches for individual investors when assessing a factor tilt in portfolios. (0:13:54) Eduardo unpacks the idea of trust in relation to the premium. (0:20:45) When does a completely small-cap value portfolio make sense? (0:27:23) Avantis' method for targeting value and profitability. (0:31:03) The weighting of different metrics that Avantis uses when building portfolios. (0:34:43) Eduardo unpacks cash profitability versus operating profitability. (0:36:53) The approach at Avantis to sector weights. (0:39:56) Understanding adjusted book value when pricing a company. (0:43:53) Eduardo describes the premium for the Goodwill adjustment. (0:50:02) How Avantis views pursuing credit premium in fixed income investments. (0:51:32) Determining the size of factors tilts on particular products. (0:57:05) Reasons that there are no emerging market small cap value strategies. (0:59:48) Comparing the research behind inflation-focused equity strategy to a more general value profitability premium. (1:06:03) Avantis' strategy for staying on the cutting edge of the latest research. (1:10:34) Conversations between Avantis and American Century Investments about different investment philosophies. (1:18:22) Eduardo shares his opinion about Avantis' competitive advantage. (1:19:56) Where Avantis and Eduardo are aiming their energy in the near future, and the succession plan for the company. (1:23:11) Some surprising similarities between aeronautics and asset management. (1:27:21) Eduardo talks about his personal definition of success. (1:31:31)   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/ Eduardo Repetto — https://www.avantisinvestors.com/content/avantis/en/about-us/our-team/eduardo-repetto.html Avantis Investors — https://www.avantisinvestors.com/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on Twitter — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on Twitter — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In today’s episode, we pull relevant quotes from past guests (namely John Cochrane, Gene Fama, and Jonathan Berk) to extricate who should own market cap funds. We look at the variable risks of value stocks and factor investing and hear counter-views on owning the market. We also delve into the hot topic of tax loss selling, with an overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. This episode will get you up to date on the biggest finance news of the week, from crypto collapses to Amazon’s catapulting gains and losses. Tune in to hear all of this and more, including a recap of our conversation with Dave Goetsch and our Financial Literacy Month book reviews.    Key Points From This Episode:   A neat way to keep track of the value of your purchases over time. (0:00:33) The results of the Rational Reminder financial literacy survey. (0:02:44) An overview of this episode’s topics. (0:05:45) Who should invest in market cap-weighted index funds. (0:07:28) How to determine whether you’re different from the average investor. (0:16:13) Gene Fama’s take on the possibility of identifying state factors. (0:22:13) The variable risks of value stocks. (0:23:25) What drives people to increase their value tilts over time. (0:25:11) The risks of factor investing, and trading in general. (0:28:26) Jonathan Berk’s take on owning the market. (0:31:53) A summary of who should invest in total market index funds. (0:33:20) The big crypto news of the week! (0:38:21) Other significant market news. (0:42:17) An overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. (0:44:59) Our book reviews for Financial Literacy Month. (0:55:15) A recap of our conversation with Dave Goetsch. (1:01:47) A few of our listeners’ reviews. (1:02:50)   Participate in our RR CE Credits Survey: https://forms.office.com/Pages/ResponsePage.aspx?id=xVA-B3TS3UeuUte5Yx-hRi0Vpj3fzvhNpOTm6eRMYJ5UN0tOM1A5MFdPQzJFT1hZOTJLN1pHRVFYSS4u Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-227-who-should-invest-in-cap-weighted-index-funds-discussion-thread/20230 Books From Today’s Episode: The Geometry of Wealth: How to shape a life of money and meaning — https://amzn.to/3Od9J3N Retirement Income for Life: Getting More without Saving More — https://amzn.to/3GpkHRN We're Talking Millions!: 12 Simple Ways to Supercharge Your Retirement — https://amzn.to/3UI3uaE Common Sense on Mutual Funds — https://amzn.to/3AjUsIM The Investment Answer: Learn to Manage Your Money and Protect Your Financial Future — https://amzn.to/3UWeSPM Money Like You Mean It: Personal Finance Tactics for the Real World — https://amzn.to/3g9bT7Q 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 Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore 'An Intertemporal Capital Asset Pricing Model' — https://www.jstor.org/stable/1913811 'Risk and Return of Value Stocks' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=112553 'The Value Premium' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=351060 'A Consumption-Based Explanation of Expected Stock Returns' — https://repository.upenn.edu/cgi/viewcontent.cgi?article=1146&context=fnce_papers 'Who Are the Value and Growth Investors?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426823 'Is There a Replication Crisis in Finance?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3774514 'Amazon Becomes World’s First Public Company to Lose $1 Trillion in Market Value' — https://www.bloomberg.com/news/articles/2022-11-09/amazon-hits-unwelcome-milestone-with-1-trillion-in-value-lost?leadSource=uverify%20wall  

In this episode, we speak to renowned Canadian figure Colonel Chris Hadfield. For those who don't know, Chris is a heavily decorated astronaut, engineer, and pilot, and has received many awards, such as the Order of Canada, the Meritorious Service Cross and the NASA Exceptional Service Medal. Colonel Hadfield became a worldwide sensation with his video of David Bowie's "Space Oddity" which was viewed by over 75 million people. He aims to make space more accessible and continues to share the wonders of outer space and science with as many people as possible. Besides his phenomenal professional background, he is also known for his music which he writes and plays on earth and in space! He is also the author of several books, namely An Astronaut's Guide to Life on Earth, You Are Here, and a children's book, The Darkest Dark. Although Colonel Hadfield has a very different background from previous guests, his 35-year career has afforded him many lessons that apply to life, which he shares in our conversation with him. We learn the importance of goals and why reaching your goals should not define your happiness. Hear ways to overcome fear when facing uncertainty, the value of competence, and why enjoying the road to success is more important than success itself. Find out why sweating the small is essential to success, whether Colonel Hadfield suffers from imposter syndrome, and where true happiness comes from. Tune in and discover the secret to success and happiness in this one-of-a-kind conversation with special guest, Colonel Chris Hadfield!   Key Points From This Episode:   What motivated Commander Hadfield to take pictures onboard the International Space Station. (0:04:10) He briefly explains the amount of effort that went into taking pictures for his book You Are Here. (0:05:14) What lessons Commander Hadfield learned as an astronaut that he applies to life. (0:06:34) How to keep motivated to achieve your goals with the knowledge that you probably won’t achieve them. (0:08:41) Why his goal was becoming an astronaut and not to be an astronaut. (0:11:05) Whether there is a time to reconsider or quit a goal that you have set for yourself. (0:12:46) The best way to prepare for situations with uncertain outcomes. (0:14:51) How to prepare for situations that you cannot prepare or practice for. (0:18:18) Ways to mitigate fear when dealing with risk and uncertainty. (0:20:55) Learn if building competence is different for different people. (0:23:48) Hear the benefits of negative thinking and sweating the small stuff. (0:25:33) Commander Hadfield explains how to prepare for novel situations. (0:29:07) He shares where he thinks life satisfaction comes from. (0:31:49) Find out if Commander Hadfield ever suffers from imposter syndrome. (0:34:14) What life lessons he hopes to impart to his grandchildren. (0:36:09) How Commander Hadfield defines success in his life. (0:38:04) We highlight the main takeaways from our conversation with Commander Hadfield. (0:41:14)     Links From Today’s Episode:   Commander Chris Hadfield — https://chrishadfield.ca/ Commander Chris Hadfield on Twitter — https://twitter.com/Cmdr_Hadfield/ Commander Chris Hadfield on Instagram — https://www.instagram.com/colchrishadfield/ Commander Chris Hadfield on Facebook — https://www.facebook.com/AstronautChrisHadfield Commander Chris Hadfield on LinkedIn — https://www.linkedin.com/in/chris-hadfield/ Commander Chris Hadfield on YouTube — https://www.youtube.com/c/ChrisHadfieldAstronaut/featured   A Space Oddity — https://www.youtube.com/watch?v=KaOC9danxNo You Are Here — https://www.amazon.com/You-Are-Here-Photographs-International/dp/0316379646 An Astronaut's Guide to Life on Earth — https://www.amazon.com/Astronauts-Guide-Life-Earth-Determination/ The Darkest Dark — https://www.amazon.com/The-Darkest-Dark/  

Are index funds a menace to the market? Are pension funds still a wise way to secure your financial future? In this episode, we discuss index funds, the state-sponsored pension plan in Canada, and much more. First, we unpack the nuances of index funds and take a look at the impact that active and passive investors have on the market. We discuss current index fund trends, when to switch from a passive to an active investor, and the dreaded index fund tipping point. To help us understand pension funds, we also chat with Jordan Tarasoff, a financial planner at PWL Capital, about the recent controversy regarding state pension schemes in Canada, and he provides us with some valuable insights into the government’s upcoming plan. We switch up our usual book review to celebrate Financial Literacy Month and share five recommended books that will help you improve your understanding of finance. We also try something new by giving listeners a condensed overview of a previous episode with one of our favourite guests, Scott Rieckens. Finally, we go through some of the feedback and comments we’ve received from the growing Rational Reminder community about the show and our recent financial goals survey.   Key Points From This Episode:   What to look forward to in next week’s episode. (0:05:08) Hear about a special promotion to celebrate Financial Literacy Month. (0:05:43) Introducing today’s topic and what to expect in the episode. (0:05:56) Worries and biggest critiques of index funds. (0:08:23) Current trends regarding index funds in relation to the market. (0:09:40) When investors should switch from passive to active. (0:12:45) Some good news about the index fund tipping point. (0:15:46) What investors should be aware of when actively investing. (0:16:32) How informed and misinformed managers contribute to the index fund tipping point. (0:19:38) Who the investors and managers are that change to passive investment. (0:20:52) How switching from active to passive investing affects the value of the market. (0:25:38) Unpacking the concept of markets being ‘inelastic’ as a result of index funds. (0:28:52) Whether passive investing undermines price efficiency concerning index funds. (0:30:03) What would cause the index tipping point to occur. (0:31:40) A brief background on today’s guest, Jordan Tarasoff. (0:35:00) Details about the Canada Pension Plan (CPP) and how it works. (0:35:28) Jordan outlines the benefits of deferring a pension plan claim. (0:36:28) Recent changes that make deferring your pension plan non-beneficial. (0:38:20) What age group the recent pension plan changes impact the most. (0:42:14) Why the Consumer Price Index (CPI) can’t be used to predict wage growth. (0:43:53) How Jordan is approaching his clients’ pensions regarding the new changes. (0:45:10) Review of our top five books for increasing financial literacy. (0:48:57) Our new segment: summarizing a past episode in sixty seconds. (0:56:57) We ‘talk cents’ about financial values and spending. (0:58:49) Recent reviews and feedback received about the podcast and goals survey. (1:02:40)     Links From Today’s Episode:   Jordan Tarasoff — https://www.pwlcapital.com/profile/jordan-tarasoff/ Scott Rieckens — http://www.scottrieckens.com/ Efficient Frontier — http://efficientfrontier.com/ef/0adhoc/2books.htm Episode 95: Scott Rieckens (Playing with FIRE): Finding Financial Education, Perspective, and Freedom — https://rationalreminder.ca/podcast/95 Episode 99: Andrew Hallam (Millionaire Teacher): How to be Wealthy (and Happy) — https://rationalreminder.ca/podcast/99 Episode 108: Dr. William Bernstein: Praying for a Bear Market — https://rationalreminder.ca/podcast/108 Episode 128: Morgan Housel: The Psychology of Money — https://rationalreminder.ca/podcast/128 Episode 159: Bill Schultheis: Build Wealth and Get on With Your Life — https://rationalreminder.ca/podcast/159 Episode 186: Andrew Hallam: Balancing Money, Relationships, Health, and Purpose — https://rationalreminder.ca/podcast/186 Episode 191: Emerging Markets: Diversifying Asset or a Reverse Lottery? (plus Reading Habits w/ Morgan Housel) — https://rationalreminder.ca/podcast/191 Episode 212: Prof. Ralph Koijen: Demand System Asset Pricing & Inelastic Markets — https://rationalreminder.ca/podcast/212 Episode 124: Prof. Lubos Pastor: Equilibrium Models vs. Intuition — https://rationalreminder.ca/podcast/124 Episode 220: Jonathan Berk and Jules van Binsbergen: The Arithmetic of Active Management, Revisited — https://rationalreminder.ca/podcast/220 ‘On the Size of the Active Management Industry’ — https://www.jstor.org/stable/10.1086/667987 ‘Disagreement, tastes, and asset prices’ — https://www.sciencedirect.com/science/article/abs/pii/S0304405X06001954 ‘Measuring skill in the mutual fund industry’ — https://www.sciencedirect.com/science/article/abs/pii/S0304405X15000628 ‘Which Investors Matter for Equity Valuations and Expected Returns?’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3378340 Balance: How to Invest and Spend for Happiness, Health, and Wealth — https://www.amazon.com/Balance-Invest-Happiness-Health-Wealth/dp/1774580756 If You Can: How Millennials Can Get Rich Slowly — https://www.amazon.com/If-You-Can-Millennials-Slowly/dp/098878033X The Coffeehouse Investor's Ground Rules — https://www.amazon.com/Coffeehouse-Investors-Ground-Rules-Happiness/dp/1119717086 The Psychology of Money — https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681 Think, Act, and Invest Like Warren Buffett — https://www.amazon.com/Think-Invest-Like-Warren-Buffett/ The November Meet-up Email — info@rationalreminder.ca Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on Twitter — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on Twitter — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Are stocks and bonds good in the long game? What are the best long-term investment options? In this episode, we speak to Professor Scott Cederburg about the nuance surrounding the stock market, bonds, and other investment types in the long term. He has a Ph.D. in Finance from the University of Iowa and is currently the Associate Professor of Finance at Eller College of Management at the University of Arizona. His research focuses on the long-horizon performance of a range of asset classes and investment types and has published in high-ranking academic journals, making him the perfect person to speak to about the subject. We discuss the topic through the lens of several papers he has written on stocks, bonds, retirement savings, and return predictability. In our conversation, we unravel the nuance of the returns on long-term stocks and bonds, hear details about his research design, and learn how unanticipated events can affect the market. He also provides insight into the different biases surrounding long-term investments, the block bootstrap approach, reasons why the block bootstrap approach is needed, and why bonds and bills may not be the long-term investment you were hoping for. We also discuss the best options for investors regarding pre-tax and post-tax accounts and the differences between high-beta and low-beta portfolios. He also shares some basic steps for investors to help them protect their investments. Join us as we dig into the past to uncover the financial future with Professor Scott Cederburg.   Key Points From This Episode:   We begin with Professor Cederburg describing his research design for his work investigating long-term returns on stocks and bonds. (0:04:20) Hear examples of how unanticipated events lead to impacts on stocks and bonds. (0:08:08) What the overall trend in the data was from his research on stocks and bonds. (0:11:05) Why considering different biases is essential for financial decision-making. (0:11:45) How the historical experience in the US stock and bond markets compare to other developed markets. (0:12:45) Details about the data he collected regarding domestic stocks and investors. (0:13:55) Learn how probable it is that domestic stocks will deliver losses in the long term. (0:16:41) Outline of the factors which tend to cause long-term stock losses. (0:17:36) What potential losses are in the long-term for international stocks. (0:18:58) How likely stocks will deliver catastrophic losses as opposed to traditional forms of loss. (0:22:15) Find out how much the probability of loss decreases with longer horizons. (0:23:59) The contribution of currency and domestic inflation to the trends in the data. (0:24:52) We compare how well international stocks hedge against long-term real losses in domestic stocks. (0:25:25) He shares how he thinks investors should approach the home country bias. (0:26:34) A rundown of the expropriations that exist in Professor Cederburg’s data. (0:27:34) We talk about long-term stocks and their implications on asset allocations. (0:28:48) How wide the distribution of long-run stock payoffs are. (0:29:28) Discover how likely bonds and bills are to real losses over a long period. (0:30:16) Breakdown of what the distribution looks like for bond returns. (0:31:52) Whether bonds act as a hedge against poor stock returns. (0:33:24) Common economic conditions that explain the poor long-term returns for stocks and bonds. (0:34:58) Ways in which the results can be used to make predictions for the economic future. (0:38:36) Professor Cederburg tells us if stocks are safe or risky in the long term. (0:40:23) He unpacks mean reversion in the full-time series compared to the block bootstrap approach. (0:41:27) Why emerging markets were not considered in the study. (0:43:55) Advice for investors given the findings of his study. (0:45:00) We discuss the applicability of the findings within a contemporary market setting. (0:47:04) Which variables need to be considered when deciding between a pre-tax or post-tax savings account. (0:49:19) Factors that make a pre-tax and post-tax account valuable. (0:50:41) Hear the investment type most exposed to future tax schedule uncertainty. (0:54:50) Whether using a post-tax account can build resilience to tax uncertainty. (0:56:29) Simple rules for listeners to help them optimize the location of their savings. (0:59:08) How the simple rules compare to the optimization analysis performed for the research paper. (1:01:40) Risk-adjusted performance for high beta and low beta portfolios. (1:03:02) We learn what the implications are for someone investing in low-beta assets. (1:05:58) Professor Cederburg shares his definition of success. (1:09:17)     Links From Today’s Episode:   Global Financial Data — https://globalfinancialdata.com/ ‘Stocks for the long run? Evidence from a broad sample of developed markets’ — https://www.sciencedirect.com/science/article/ ‘Tax Uncertainty and Retirement Savings Diversification’ — https://www.sciencedirect.com/science/article/ ‘Does it pay to bet against beta? On the conditional performance of the beta anomaly’ — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12383  

We recently created and conducted a very interesting survey based on financial goals, and today, we get to share some of the data we collected and the answers that were given to the questions. Although there are some definite limitations to our expertise as surveyors and data collectors, the findings are most definitely illuminating, surprising, and useful. Listeners will get to hear a bit about the process of building the survey as well as some of the raw numbers and data before we get into the list of goals that were submitted, collated, and ranked. We also share some of the ways that these were split across demographics such as age and gender. Apart from this focus on the survey, we share some thoughts on Eat the Rich, Coin, and The Next Millionaire Next Door, and finish off the show with some very impactful letters from listeners that we have received recently.   Key Points From This Episode:   Thoughts on the new Netflix show, Eat the Rich, and the story of GameStop. (0:01:58) What to expect on the podcast in November during Canadian Financial Literacy Month. (0:05:17) Reflections on the new film, Coin, and the founding of Coinbase. (0:08:08) Introducing the results from our recent survey on goals. (0:11:23) The process of building the survey and the questions we included. (0:18:22) A look over the basic data of the survey. (0:22:27) Popular objectives from the survey and how these were split across different demographics. (0:23:17) The answers that were given in relation to each specific question. (0:28:02) Developing best practices for goal setting for an advisor environment. (0:30:17) Limitations to our expertise in designing this survey and analyzing the data. (0:32:43) Running through the complete list of goals in order. (0:34:29) Introducing this week's book discussion on The Next Millionaire Next Door. (0:39:46) Standout findings from the research that was conducted for the book. (0:44:00) Utilization of an 'expected net worth test' in the book. (0:49:50) A look at some of the listener messages we have received lately. (0:52:29)     Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-223-a-financial-goals-master-list-n-310-discussion-thread/19742   Books From Today’s Episode: The Next Millionaire Next Door — https://www.amazon.com/Next-Millionaire-Door-Enduring-Strategies/dp/1493035355   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 Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Financial Goals Summary - https://www.pwlcapital.com/resources/goals-survey-summary/ 'Generating Objectives' — https://repository.library.georgetown.edu/handle/10822/707941 Tom McHugh YouTube Video — https://www.youtube.com/watch?v=MbaAkJHvCIw 'Generating Objectives' — https://repository.library.georgetown.edu/handle/10822/707941 Tom McHugh YouTube Video —https://www.youtube.com/watch?v=MbaAkJHvCIw

There is more and more research on the determinants and results of happiness in human life, and on the show today we get to do an amazing deep dive on this subject with social psychologist, and author of Happier Hour, Cassie Holmes. Cassie is currently running a course at UCLA Anderson School of Management called 'Applying the Science of Happiness to Life Design', and her book draws directly from the content of this course. In our chat, Cassie shares some definitive data on what actually influences our happiness in significant ways, how to invest and allocate your available time, approaches to offsetting hedonic adaptation, and the vital importance of relationships and exercise. Our guest also talks about popular misconceptions and cultural perceptions about success, and why assessing your values and purpose can make achieving more happiness much more realistic. It is here that we find Cassie's main thesis; that through reflection and tracking we can determine more accurately how to use our time in the different parts of our lives and increase our day-to-day happiness, so make sure to join us for this episode of the Rational Reminder.   Key Points From This Episode:   The science behind the important benefits of happiness. (0:02:17) Current research into the measurement of happiness. (0:04:27) Cassie talks about the roots of the course she teaches on happiness. (0:07:02) Misconceptions about what makes us happy and the lasting power of notions of success. (0:10:25) The cultural roots of our perceptions of happiness. (0:14:58) Determinants of happiness; Cassie shares the biggest factors in our emotional landscape. (0:20:16) Working towards a goal, time tracking, and entering flow states. (0:25:28) Happiness as a decision and as a disposition; how much control do we have? (0:30:26) How comparison undermines and robs us of happiness. (0:37:01) Cassie unpacks how to understand the role of relationships in our lives. (0:38:30) A story from Cassie illustrating the links between discretionary time and happiness. (0:43:35) Amounts of discretionary time to allocate to yourself each day. (0:49:39) The worst ways to use time and the activities that enhance feelings of loneliness. (0:52:02) Cassie's advice on how to avoid time poverty and what to refuse. (0:55:53) The dangers of an over-emphasis on productivity and urgency. (0:58:21) Aligning your values and purpose in the professional sphere of your life. (1:01:38) How the remote landscape and work-from-home model has impacted happiness. (1:03:03) Going over the exercises and assignments that Cassie finds to be most impactful for her students. (1:06:36) Cassie's definition of success and its relation to her clearly defined purpose. (1:11:33)  

Of course, you want to protect your family and your savings from unforeseen consequences, but is life insurance the best option? Can life insurance be an investment rather than a cost? In today's episode of the Rational Reminder Podcast, we take a look at everything life insurance and dig into some hard-hitting research on the subject. We break down the various insurance products available and unravel the nuances regarding returns, dividends, and the associated fees. We discuss why there is so much confusion regarding returns and associated risk, how your contribution can affect your returns, and why you may not get the payout you expected. We also delve into what makes each insurance product different from the next, whether predictions on insurance policy returns are possible, and how insurance compares to other asset classes. If you’re looking for insight into the potential tax benefits of life insurance and a breakdown of the different scenarios where life insurance is needed, this is the episode for you!   Key Points From This Episode:   The main topic of the episode: permanent life insurance. (0:04:29) Defining insurance and how it is typically structured. (0:04:44) ‘Term life insurance’ and how it works. (0:05:41) A brief outline of the differences between term insurance and permanent insurance. (0:07:37) Details about term life insurance and the benefits to the policyholder. (0:09:37) Another type of life insurance: universal life insurance. (0:11:05) How investments within a life insurance policy are designed. (0:13:20) An interesting insight Ben came across while researching insurance. (0:14:38) Non-participating whole life insurance and the associated cash value. (0:16:00) A breakdown of participating life insurance and what makes it different. (0:18:42) The basis for performance and premiums on participating insurance. (0:21:43) Whether or not it’s possible to predict returns from insurance products. (0:25:25) Reasons for the obscurity surrounding insurance products and expected returns. (0:25:49) The policy illustration software that many insurance companies use. (0:29:35) Insight into post-tax returns of permanent insurance on death. (0:35:23) An overview of when you would need life insurance. (0:40:58) The long-term expected death benefits compared to other assets. (0:43:03) Insight into the commission incentive associated with insurance policies. (0:45:47) Highlights of a recent presentation that Ben gave at an IAFP conference. (0:46:53) Feedback received about the Jonathan Berk and Jules van Binsbergen episode. (0:49:01) A summary of recent news about rate changes and developments at Vanguard. (0:56:23) This week’s review of The Art of Gathering, about meeting more effectively. (01:00:55) An honourable mention of another book, Your Investment Philosophy. (1:06:22)  

Do you feel like you have a good grasp of financial markets? Think again! In this episode, we take a plunge into the world of financial markets with experts Jules van Binsbergen and Jonathan Berk. Jules is a Professor of Finance at the Wharton School of the University of Pennsylvania and Jonathan is a Professor of Finance at Stanford Graduate School of Business. They also host a popular podcast called Else Equal, which explores the science and strategy of making better financial decisions, and have written several academic papers that challenge the status quo. In our conversation, we discuss their research on the relationship between manager skill and fund performance, the best ways to measure performance, and reasons why benefits are in favour of the managers. We also explore the dogma surrounding mutual funds, the differences between active and passive management, and how to measure efficient capital markets. Listeners will also hear perspectives that challenge their understanding of capital markets and viewpoints that completely disagree with previous guests. Although we have covered this topic before in previous episodes, this conversation will fundamentally change the way you view financial markets and how to think about them.   Key Points From This Episode:   What information fund performance contains about manager skill. (0:04:04) Reasons why manager skill and performance are unrelated. (0:04:59) We learn how manager skills should be measured. (0:06:57) How to choose the appropriate benchmark to measure value added. (0:09:26) Find out if you can use factor-mimicking portfolios to measure risk-adjusted returns. (0:12:05) Whether funds that directly target risk factors can be used as an investable benchmark. (0:16:35) What the skill of active managers are when skill is measured as value-added. (0:20:52) The proportion of value-added between security selection and market timing. (0:23:20) Discussion about how persistence manifests when it is measured by value-added. (0:25:43) Find out if investors should analyze mutual fund companies as opposed to managers. (0:32:36) Discover why research has focused on individual security pricing and not on evaluating manager skill. (0:34:25) We unpack the reasons why it's a zero net alpha as opposed to a negative net alpha in equilibrium. (0:38:19) We delve into why the research took so long to apply rational expectations to fund investors as with the stock market. (0:42:46) An explanation of how equilibrium zero net alpha fits into Bill Sharpe's arithmetic of active management. (0:48:16) Who benefits from the high amount of skill available within the sector. (0:51:11) Whether the increase in millionaires around the world drives inequality. (0:56:12) Hear if it is possible to identify skilled fund managers before the benefits of their skills are absorbed by fund size. (01:01:41) The implications on efficient market hypothesis for the stock market. (01:05:36) Advice for investors, considering that the benefits of skill are in favour of managers. (01:08:37) Details about their research on how multi-factor asset pricing models are not representative of risk. (01:12:45) We end the show by learning how our guests define success in their lives. (01:19:08)    Links From Today’s Episode:   Jules van Binsbergen — https://sites.google.com/view/jules-van-binsbergen/ Jules van Binsbergen on LinkedIn — https://www.linkedin.com/in/jules-van-binsbergen-a7b21a2/ Jules van Binsbergen on Google Scholar — https://scholar.google.com/citations/ Wharton School of the University of Pennsylvania — https://www.wharton.upenn.edu/ Jonathan Berk — https://www.gsb.stanford.edu/faculty-research/faculty/jonathan-b-berk Jonathan Berk on LinkedIn — https://www.linkedin.com/in/jonathan-berk-07874a3b/ Jonathan Berk on Google Scholar — https://scholar.google.com/citations/ Stanford Graduate School of Business — https://www.gsb.stanford.edu/ Else Equal: Making Better Decisions — https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions Passive in Name Only — https://heinonline.org/HOL/LandingPage/ The Emperor of All Maladies — https://www.amazon.com/Emperor-All-Maladies-Biography-Cancer/dp/1439170916 Unsettled — https://www.amazon.com/Unsettled-Climate-Science-Doesnt-Matters/dp/1950665798 ‘Episode 200 with Prof. Eugene Fama’ — https://podcasts.google.com/feed/aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz/episode/MzA2MjM2OTctOTc5Yy00MDU4LWE3YzMtYTdmMGU4NGQ0Y2Jj?sa=X&ved=0CAIQuIEEahgKEwjI27ng_rH6AhUAAAAAHQAAAAAQsQQ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on Twitter — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on Twitter — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/  

Critics of blockchain often say that it is nothing more than a database, but today’s guest, Ari Juels, has a different opinion. His technical expertise (he is a Professor of Computer Science at Cornell Tech), combined with his ability to understand both sides of a divisive topic like this one, make for a very insightful conversation about Bitcoin, NFTs, and smart contracts. We talk about the reasons for the valid skepticism that surrounds blockchain technology, the various reasons that Ari believes that it is a powerful, useful tool, despite its downfalls, pyramid schemes, decentralized exchanges and more!   Key Points From This Episode:   The significance of the Bitcoin innovation to Ari’s field of study. (0:03:40) What piqued Ari’s initial interest in digital currency. (0:04:46) Ari explains the difference between permission and permissionless blockchains. (0:06:27) Comparing a permission blockchain with a distributed-append-only database with authorized contributors. (0:08:34) A number of reasons why permissionless blockchains have been so widely embraced (despite Ari’s initial prediction to the contrary). (0:12:24) Fraud in the cryptocurrency space; Ari shares his thoughts. (0:14:28) The benefits of the cultural phenomenon of NFTs. (0:19:25) Examples of NFT-related issues that still need to be addressed. (0:26:04) How smart contracts can be used by criminals to their advantage. (0:30:09) Why smart contracts are well suited for compliance. (0:32:02) An example of a smart contract pyramid scheme. (0:35:48) Some of the pros and cons of the inflexibility of smart contracts. (0:41:09) What flash loans are and what they can be used for. (0:46:11) Understanding the value of oracle systems. (0:50:04) How the Candid system that Ari’s group developed helps to mitigate the problem of lost Bitcoin keys. (0:57:04) Ari explains the advantages and disadvantages of a decentralized exchange. (01:01:19) How the blockchain has improved code writing. (01:07:57) The importance of balancing privacy and accountability in DeFi systems. (01:09:38) Ari’s thoughts about the future potential of blockchain technology. (01:14:03) The biggest concerns that Ari has about the blockchain space. (01:15:24) Why skepticism about blockchain technology is valid. (01:17:31) The facet of the blockchain space that Ari is most excited about. (01:19:51)     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 Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Ari Juels on Twitter — https://twitter.com/AriJuels Ari Juels — https://www.arijuels.com/ The Ring of Gyges: Using Smart Contracts for Crime — http://www.arijuels.com/wp-content/uploads/2013/09/Gyges.pdf NFTs for Art and Collectables: Primer and Outlook — https://www.arijuels.com/wp-content/uploads/2022/04/NFTs__Primer_and_Outlook.pdf ‘Huge mess of theft and fraud:’ artists sound alarm as NFT crime proliferates — https://www.theguardian.com/global/2022/jan/29/huge-mess-of-theft-artists-sound-alarm-theft-nfts-proliferates Incomplete Contracts and Control — https://www.nobelprize.org/uploads/2018/06/hart-lecture.pdf Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks — https://research.chain.link/whitepaper-v2.pdf?_ga=2.99068702.124468793.1661870135-1990502175.1661870135 Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges — https://arxiv.org/pdf/1904.05234.pdf Themis: Fast, Strong Order-Fairness in Byzantine Consensus — https://eprint.iacr.org/2021/1465.pdf Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains — https://energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/documents/Witness%20Testimony_Juels_OI_2022.01.20.pdf The Seven Grand Challenges — https://www.initc3.org/projects.html