Joining us on the Rational Reminder today is one of the pioneers in the space of evidence-based investing, and someone who has been a massive inspiration to us, Mark Hebner! His website, Index Fund Advisors, was one of the first to start explaining the ideas of an evidence-based approach and the power of indexing, way back in the 1990s. We get to hear from Mark about his transition from misled active investor to his discovery of indexing and how this led to him founding Index Fund Advisors. One of Mark's mantras is to replace speculation with education, an idea he has held dear since his first forays into passive strategies and a message he delivers to his new clients repeatedly. Mark also tells us about the niche he filled with his business, visually presenting the evidence that was being ignored, in a way that was both easy to understanding and also convincing for investors. Our conversation covers the troubled waters of DIY investing, why Mark believes that an advisor is a necessary part of a good approach, as well as the parts of wealth management that are not actual investing. Mark unpacks his definition of risk and how best to think about it before we get into the topic of taxation. So for all this valuable information from a true authority, be sure to listen in with us and hear what Mark has to say!    Key Points From This Episode: The events that led up to Mark founding Index Fund Advisors. [0:03:18.7] Mark's 12 step process for getting out of active investing and the importance of the first one. [0:11:41.3] Advice for avoiding the allure of active management — the idea of the Ulysses Pact. [0:16:12.2] Thoughts on large-cap growth stocks and the lessons we learn from history. [0:18:34.6] You cannot cheat risk; rules that have remained the same since 1720. [0:22:37.3] The folly of market timing and Mark's approach for explaining this. [0:27:55.1] Understanding tax and how it should impact and propel passive strategies. [0:33:10.1] The best way to think about risk — the uncertainty of your expected returns. [0:36:16.6] Important lessons that Mark has learned while educating clients over the years. [0:39:02.4] Aspects of wealth management apart from investing; saving, withdrawal rates, spending, and more. [0:43:28.2] The indispensability of an advisor — why DIY investing is not the way to go. [0:47:08.7] Mark's personal definition of success: Freedom of choice and the opportunity to help. [0:51:04.4] The public company that Mark had and exited before he got into investing. [0:54:23.8]

Our focus for this episode of the Rational Reminder is split into two sections; first, we cycle through our regular features, looking at a number of studies and articles of interest, the market during the pandemic, and our bad advice segment, and then Benjamin is joined by Tim Nash to talk about ethical investing and comment on Wealthsimple's new sustainable portfolio. We start off our weekly round-up talking about the idea of broadening a knowledge-base and how reading widely and diversely on all manner of subjects can influence and benefit your investing. From there, we turn to the topic of quantitive easing before exploring Tim Wu's thesis about information empires and how they cyclically influence economics. We then dive into the Ontario Securities Commission Investor Experience Study and Lubos Pastor's paper, 'Mutual Fund Performance and Flows During the COVID-19 Crisis'. Both of these shed light on investor behaviour and market performance during 2020 and also offer some interesting findings on the strength of some active management. Daniel Crosby has laid out what he calls '22 Behavioral Nudges to Optimize Client Outcomes', which we then run through, touching on each of his ideas and commenting where necessary. Our bad advice of the week comes from TikTok, and we listen in on two, worryingly misleading clips from TikTok personalities — the social platform may not be the best place to find sound financial advice! For the last part of the show we hear from Tim Nash; he shares his thoughts on Ken French's appearance on the show recently and what the pandemic has proven about sustainable funds going forward. So for all of this and a whole more, in a jam-packed episode, be sure to listen in with us!    Key Points From This Episode: The importance of a wide range of reading material and looking at Peter Thiel's Zero to One. [0:03:35.2] Quantitative easing and the important work that Frances Coppola has done on the subject. [0:09:22.8] Tim's Wu's economic theory around the cycle of information empires. [00:11:49] Takeaways from the Ontario Securities Commission Investor Experience Study. [00:13:53] Narratives about actively managed funds during the COVID-19 crisis. [0:20:04.1] The performance and flows of mutual funds; looking at Lubos Pastor's paper. [0:28:35.7] Sustainable funds during the crisis — the past research that this now underlines. [0:38:03.3] Looking at the 22 behavioural nudges identified by Daniel Crosby for optimizing client outcomes. [0:43:23.7] Bad advice of the week: A couple of concerning clips of financial of content on TikTok. [0:58:46.2] An introduction to Wealthsimple's new sustainable model portfolio. [1:03:45.5] Tim weighs in on what this progressive portfolio really means. [1:08:32.7] A response to the conversation we had with Ken French about ESG. [1:11:44.1] The increasing prioritization of sustainable companies during the pandemic. [1:16:47.8]

When it comes to your financial life, you can have endless conversations about asset allocation but we often neglect the impact of communication and asking difficult questions. Today we speak with Chief Financial Commentator and awarded media personality, Pattie Lovett-Reid. We start the discussion by COVID silver-linings and the financial lessons that people have been learning due to the pandemic. Pattie explores how people’s views of risk have shifted, along with the realization that our portfolios may not be as watertight as we had thought. We dive into financial control and Pattie emphasizes how better family dialogue and managing your emotions are key elements. After talking about how the COVID crisis is different from previous crises, Pattie talks about how stress impacts people’s financial decision-making. We ask Pattie for advice on teaching children about finances, and she uses examples from her own life to show how you can instill financial responsibility in your kids. From kids to partnerships, Pattie highlights why you should be on the same financial page as your partner before explaining the concept of financial abuse. We touch on what job-seekers should consider as they apply for jobs, tips for retirees facing the challenge of low-income rates, offering financial advice through Instagram, and how the work-from-home trend is affecting real estate. Our conversation this episode filled with practical advice, and Pattie’s approach focuses on the importance of asking difficult questions and communication, be that with your family, partner, or financial advisor. Tune in to hear more about why asking difficult questions is critical to controlling your finances.    Key Points From This Episode: Introducing this episode’s guest, Pattie Lovett-Reid. [0:00:15] Key financial lessons that people have learned from the COVID-19 pandemic. [0:04:01] How the way that people view their portfolios has changed due to the pandemic. [0:05:08] Pattie’s insights into what people can control regarding their finances. [0:06:15] Why Pattie has bought dividend-paying stocks in sectors that have been performing poorly. [0:07:26] Why controlling your emotions is important in making sensible financial decisions. [0:09:06] Pattie’s media perspective on the current market, compared to previous crises [0:09:44] How stress has impacted people’s financial decisions for the worse. [0:12:07] What people can be doing to make sure that they don’t make poor decisions. [0:14:06] Hear how you can begin discussing personal finances with your children. [0:15:29] Planning for future upsets, the importance of balance, and being frugal, not cheap. [0:19:04.4] Being on the same financial page as your partner; it allows you to achieve financial goals. [0:21:40] The idea of financial abuse and the need for transparent conversations. [0:25:15] Thoughts on what job-hunters should do once the market opens up. [0:30:07] Pattie shares her ‘big-picture’ opinions on COVID market shifts. [0:31:48] Hear Pattie’s advice to retirees facing the challenge of low-interest rates. [0:33:27] How Pattie uses Instagram and the types of questions that she’s often asked. [0:36:04] The state of the average Canadian’s access to financial advice [0:39:22] Tough questions that you need to ask your financial advisor. [0:41:19] Reflecting on her life Pattie gives listeners some final advice on following your passion. [0:42:23]

The hype to invest in high-cap tech companies is deafening. In this episode, we share what you need to know before buying FANG company stocks. Although FANG is the popular term, our analysis includes Facebook, Apple, Amazon, Alphabet, Tesla, and Microsoft — so it’s closer to the less slick-sounding FAAATM. Before we dive into that, we talk about the show’s books of the week and how ETFs and mutual funds have been performing compared to July of 2019. We then set the scene for how FANG businesses fit into the market-place and how we measure their success by their size and relative price. As these are the companies that are changing the fabric of society, we discuss how it is fitting that companies like Apple represent a whopping 6% of the US market. To put this in historical context, we explore AT&T’s past and how market-share tends to reflect the level of innovation introduced by businesses. The upshot of this is that the huge market-share that FANG companies have carved out is not as new of a phenomenon as it may seem. We then unpack how stock prices are valued and the impact that expectation has on stock valuation and returns. After talking about why we might be overpaying for growth stocks, we commiserate over the pain of being a value-titled index investor at times when large-cap growth stocks dominate both the discussion and the marketplace. We round this section by touching on the US stocks’ performance compared to US treasury bills, whether you should be looking for the next Amazon, and why you need to quantitatively look at a company’s business quality. From FANG we jump into our planning topic of the week — a review of the withdrawal rules for the Registered Education Savings Plan (RESP). Near the end of the episode, we share some bad financial advice for the week courtesy of TMZ and the idea that you should start your portfolio with 100% gold. Tune in to hear more from the world of rational investing.   Key Points From This Episode: From Blackstone to Bloomberg, hear about the books of the week. [0:01:23] Why success is often driven by luck and not by ‘being the best.’ [0:06:19] Listener feedback on Assuris — the insurance industry’s insurer. [0:07:32] Comparing Canadian ETF and mutual fund performance from July 2019. [0:08:52] Introducing our investment topic; should you add FANG mega-caps to your portfolio? [0:12:37] Measuring the unreal success of the top FANG companies. [0:14:28] Contextualizing Apple’s market-share within US history. [0:16:44] Exploring AT&T’s history to unpacking flaws behind the ‘this time, it’s different’ line of thinking. [0:18:07] How developing life-changing technology can earn you high market share — until it doesn’t. [0:22:19] Understanding mega-cap stock prices and factors to consider before buying. [0:25:25] How high market expectations are linked to low stock returns. [0:27:59] The connection between paying low prices for higher stock returns. [0:31:04] Rational versus irrational views on high-growth stock prices. [0:32:13] The pain of being a value-tilted investor at times when large-cap growth stocks outperform. [0:35:36] How most US stocks trail underperform compared to US treasury bills whether you should be looking for the next Amazon. [0:37:43] Business quality and how the relative expensiveness of growth stocks is bigger than ever. [0:41:01] We dive into your planning topic on the Registered Education Savings Plan withdrawal rules. [0:45:12] What to consider before coming up with an RESP withdrawal strategy. [0:47:57] Our bad advice for the week; become the Wolf of Wall Street by reading TMZ and starting your portfolio with 100% gold. [0:51:01]

Michael Kitces is one of the world’s leading experts in financial services but is also a trusted authority in retirement planning research, and today he joins us for a brilliant conversation that covers both topics. Michael is the Head of Planning Strategy at Buckingham Wealth Partners, Co-Founder of XY Planning Network, AdvicePay, and fpPathfinder, and also hosts the much-admired Financial Advisor Success podcast. In the first section of the show, we shoot our questions about retirement planning Michael’s way, exploring sequence of returns risk and the implications it presents for spending and portfolio management through retirement. Michael weighs in on three approaches to variable spending, why people can do what they love and still retire well, and his research on the ‘rising equity glidepath’. He also speaks about why it’s normal to start saving after you hit forty, and why withdrawal policy statements can help you have a better idea of when your portfolio is in the red. This leads us into the financial services segment of the show and we start out hearing Michael compare the assets under management model to the fee for service one, and how XY Planning helps those who can’t afford the first by implementing the second. From there, we dive deeper into the limits of more affordable AUM models, Michael’s thoughts on which draw on theories of human nature and also function as an advisor underwriting how-to for investors. Toward the end of the show, Michael does an amazing job of contextualizing the merge of the brokerage and advisory sides of the financial system and what this means for investors. For all this and a closing exchange about the incredible work Michael is doing to lift standards for the industry through his podcast and more, be sure to tune in!   Key Points From This Episode: Introducing Michael Kitces, a leader in financial services and retirement planning. [0:00:15.7] Market fluctuation and how early retirement affects sequence of returns risk. [0:03:25.1] Different approaches to variable spending to deal with market fluctuation. [0:06:37.6] Lifestyle and banking habits: Why retirement spending rarely increases. [0:17:55.3] The rising equity glidepath: Inverting the conventional retirement portfolio. [0:20:57.2] How withdrawal policy statements help you know when your portfolio is in the red. [0:27:35.1] Why people don’t have to endure unhappy jobs for the sake of a good retirement. [0:34.42.7] Beating ‘learned helplessness’: Start saving in your 40s, you haven’t missed the boat. [0:43:41.6] Assets under management versus fee for service financial advisor models. [0:48:43.3] Why cheaper AUM financial advisor models can’t meet investor needs. [0:55:57.4] Limits to human sociability and how to vet a financial advisor by asking how many clients they have. [0:59:43.4] How tech has merged the brokerage and financial advice sides of financial systems and the effects of this. [1:04:30.6] Michael’s definition of success and his gratitude for the impact his work has. [1:12:02.2]

With the gold price reaching record highs, we revisit the contentious issue of whether you should add gold to your portfolio. Before mining that topic, we talk about Super Pumped: The Battle for Uber and Am I Being Too Subtle? — our book recommendations of the week. We then touch on key news stories including how the recent Apple stock split has affected its position in the Dow index. After fielding a listener question about why central banks care about deflation, we share the reasons for and against investing in gold. We discuss where gold derives its value along with the concept of the ‘golden constant’ which states that the value of gold will keep pace with inflation in the extreme long-term. Host Benjamin Felix brings in research to show why gold is a bad inflation hedge due to its short-term price volatility. He also brings in data to look at how gold performs under hyper-inflation and then speculates on how supply shock from finding new sources of gold would impact its market value. Often used as a reason to invest in gold, we provide our take on John Bogle’s statement that you should invest 5% of your portfolio in gold. Despite seeming to be a middling investment, we then talk about why so many central banks own gold. Near the end of the episode, we briefly explore the life insurance organization Assuris and which account you should draw from when buying a home. Lastly, we draw insights from this episode’s bad advice of the week. Tune in to hear more rational reminders from the investment world.   Key Points From This Episode: Media recommendations ranging from Too Much and Never Enough to Ray Donovan. [0:01:39] Updates on the model portfolios being written by Ben. [0:02:58] This week’s book recommendations: Super Pumped and Am I Being Too Subtle? [0:04:40] Dives into key stories of the week; Apple’s share split and Vanguard Investor’s trading practices. [0:09:13] Answering a listener question about why central banks care about deflation. [0:11:13] Introducing this episode’s portfolio topic; should you invest in gold? [0:13:52] An overview of the arguments for and against investing in gold. [0:15:05] How gold’s value derives from its scarcity, malleability, and symbolism. [0:15:46] Gold’s value as an industrial and collectible commodity and pricing in the ‘emotional dividend’. [0:17:18] Where the demand for gold comes from — it increases with its price. [0:20:00] The concept of the golden constant and how gold maintains its value in real terms. [0:21:23] Drawing conclusions about the value and portfolio benefits of gold from the 2013 paper, ‘The Golden Dilemma’. [0:22:31] How gold has performed in periods of hyperinflation. [0:28:19] Further unpacking the idea of a golden constant and the expectation of receiving zero return. [0:32:00] Summarising why investors are attracted to gold; it’s tangible and scarce. [0:34:50] Speculation around asteroid and ocean mining in the far future and how this might impact gold prices. [0:36:01] How central banks off-loading their gold reserves will affect the gold price. [0:38:30] Why gold returns look so good at the moment and why this can’t be trusted. [0:40:03] The paper, ‘The Long-term Returns to Durable Assets’, conclusions about the gold’s pricing. [0:41:00] Why John C. Bogle invested 5% of his portfolio in gold and why it’s not necessarily a good idea. [0:42:01] Answering why central banks hold gold in the first place. [0:43:23] Exploring Assuris — an organization protecting Canadians when their life insurance policies fail. [0:47:40] Which account to draw from when buying a home when you have equal amounts in your TFSA and RSP accounts. [0:52:30] Bad financial advice for the week; PWL Capital versus funds chosen by a big bank. [0:55:02] The importance of understanding the decision-making behind developing your portfolio. [1:04:35]

Often called a ‘once in one hundred years event’, the COVID-19 pandemic is having a profound impact on the economy. Today’s guest is Craig Alexander, Deloitte’s Chief Economist, who brings his 29 years of experience analyzing the economy to answer our questions about the marketplace. We start the conversation by exploring how the pandemic is affecting small businesses, with Craig adding insights into what the government should be doing to help. Craig discusses how the pandemic has revealed inadequacies with Canada’s employment insurance and why Canada needs to improve both its income support and its skills frameworks. A key theme in the episode, Chris presents the idea that businesses “Shouldn’t let a crisis go to waste.” As such, Chris thinks that this crisis is a chance for businesses to reassess their models, especially as certain pre-pandemic trends will continue to disrupt business. Chris also highlights the importance of high-quality childcare services to ensure both long and short-term economic recovery. From childcare, we leap to real estate before Chris provides his perspective on the interplay between the stock market and the economy. After the hosts question the value of economic forecasts, Chris makes a strong case for them, showing how they help organizations to develop plans based on several best and worst-case scenarios. Next, we ask Chris about investing in these times of economic uncertainty and if there is a risk of increased inflation in the future. Near the end of the episode, Chris talks about which industries will most likely grow in the future. Tune in to learn more from Chris’s incredible economic perspective.   Key Points From This Episode: Presenting Craig Alexander’s bona fides and the insights gained from this episode. [0:00:39] How the pandemic has impacted the economy, especially small businesses. [0:03:10] Craig talks about inadequacies in the current employment insurance system. [0:05:06] The challenge of repurposing the job market to fit the recovery landscape. [0:06:37] Reassessing business models as a way for businesses to exit the recession stronger than before. [0:07:44] Trends disrupting business that have been accelerated by the pandemic [0:08:55] Why high-quality childcare services are so important to the economy. [0:11:16] How the real estate market is faring and why Ottawa is not a good benchmark. [0:14:31] How bank policies and mortgage deferrals have impacted real estate. [0:18:40] Making a distinction between COVID-19 and post-vaccine trends [0:22:22] Why consumer debt is increasing but that the debt-to-income ratio is a poor metric [0:24:42] How the interaction between the economy and the stock market has played out. [0:28:37] What government and banks did that stabilized the stock market. [0:29:45] How economic recovery hinges on managing health risks. [0:32:04] The case for economic forecasts and their role in simulation analysis. [0:34:23] Craig highlights the level of uncertainty regarding economic futures. [00:39:15] Why uncertainty shouldn’t prevent you from making investments. [0:41:19] How the government response is geared towards preventing deflation. [00:42:52] Hear why the government's strategy won’t decrease the appetite for Canadian bonds. [0:48:03] How the pandemic is affecting some industries and which markets will see growth. [0:51:12] Chris explains why macroeconomic theories evolve based on circumstance. [0:58:06] Chris shares how he defines success and what brings him [1:03:43]

Quantitative easing is a monetary policy whereby a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity. But what exactly does that mean? In today’s episode, Benjamin and Cameron are going to address this topic, avoiding highly politicized aspects, like whether or not central banks should be involved in the economy in the first place, and focusing purely on the operational perspective of quantitative easing – what is it, how it works, and what the intended transmission mechanisms are. Benjamin explains what he has learned through his extensive research, from what money printing and the stock market have to do with one another, where the money for loans comes from, how central banks can influence lending rates, and the difference between regular open market operations and quantitative easing. We also cover how quantitative easing works, the relationship between bank reserves and money in the economy, and what causes inflation, as well as the effect of quantitative easing has on stock prices (if any). We also catch up on recent news stories, and Cameron takes us through five key personal finance lessons we can learn from this crisis. If you’re looking to understand quantitative easing, this episode will hopefully become a useful resource! Tune in today.   Key Points From This Episode: This week’s book of the week is Mindf*ck: Cambridge Analytica and the Plot to Break America by Canadian, Christopher Wylie [0:04:38] A chart showing the ratio of the Nasdaq 100 index divided by the Russell 2000 [0:08:22] University endowment sued for active investing by 94-year-old Clarence Herbst. [0:10:02] This was not the first time Clarence Herbst had an issue with his alma mater. [0:13:05] Multimillion-dollar mismanagement of public pension funds in Maryland, 2014. [0:13:22] Benjamin introduces the main topic, quantitative easing (QE), a central bank action. [0:14:42] What do money printing and the stock market have to do with one another? [0:17:37] You can summarize money as a social construct that facilitates economic activity. [0:20:06] As long as there are credit-worthy borrowers, banks will print money out of thin air. [0:22:28] The distinction between central banks and private banks, which interact with customers and have to monitor their net flow of money. [0:25:27] Open market operations allow a central bank to influence overnight lending rates. [0:28:30] The difference between regular open market operations and QE. [0:33:14] A couple of theories about how QE might work, like the portfolio balance theory. [0:37:42] There is no relationship between reserves and money in the economy. [0:41:11] What causes inflation? It’s not reserves! Demand for loans drives demand for loans. [0:43:07] What about the effect of QE on stock prices? We would expect a positive impact. [0:45:14] Money is this medium that facilitates economic activity and that's all it does. [0:47:40] Five key personal finance lessons we can learn from this crisis: Stocks are volatile [0:50:35] Debt is dangerous and emergency funds have a very important purpose. [0:50:35] Don’t stop spending, always prepare for the worst – disability insurance is crucial! [0:54:51] Cameron still wants to understand how fee-free trading platforms make money – nothing is for free! [0:50:35]

In keeping with our recent tide of incredible guests, today’s one is no exception. Dr. William Bernstein, a financial theorist, advisor, and neurologist, joins us to share some of his incredible insights. As the author of several seminal books such as The Intelligent Asset Allocator and The Four Pillars of Investing, Dr. Bernstein has made his mark applying his medical evidence-based approach to investing. These works have had a particularly strong influence on Cameron when he made the transition from active mutual funds earlier in his career, so it was an incredible honour to have him on the show. In this episode, we dive into a range of topics. We kick off with the importance of understanding investment theories and market history along with why Dr. Bernstein believes young investors should cross their fingers and hope for a bear market. We then take a look at how overconfidence and ill-discipline affect investment decisions and how investors can test their risk appetite in real-time. From there, we turn our attention to small-cap and value stocks and Dr. Bernstein’s take on them and the role they should play in your portfolio. We round the show off by discussing the real economic issue that Dr. Bernstein thinks the pandemic is bringing to the fore in the US, the parallels he has seen between his medical and his financial advisory career, and some of his frustrations in communicating financial advice. Be sure to tune into this phenomenal episode.    Key Points From This Episode: Learn more about today’s guest, Dr. William Bernstein, and his background. [0:01:06.0] An overview of value averaging and how it’s different from dollar-cost averaging. [0:02:37.0] Why Dr. Bernstein believes it’s so important for investors to understand investing theory. [0:05:14.0] What it means to understand the several facets of market history. [0:06:28.0] Insights into return sequence and why young investors should hope for bear markets. [0:08:11.0] Why generational underperformance is arguably a bigger risk than volatility. [0:09:39.0] Why people are so bad at evaluating their risk tolerance and how they should assess it. [0:11:54.0] Bernstein’s take on whether young investors should be using leverage. [0:15:15.0] Insights on premiums for small-cap and value stocks and the reason to not build an entire portfolio of them. [0:15:49.0] Dollar-cost averaging vs value cost averaging: Dr. Bernstein’s position. [0:19:37.0] Factors that influence the shift from an equity biased portfolio to a fixed-income one. [0:21:08.0] How to reconcile the idea that stocks can be less risky than bonds over time. [0:23:58.0] When Dr. Bernstein would make the rare recommendation of an annuity. [0:25:33.0] The difference between financial systems and airfoils and electric circuits. [0:27:29.0] Why Dr. Bernstein calls mean-variance optimizer an error maximizer. [0:29:28.0] Bernstein’s opinions on gold and some of the problems he sees with it. [0:30:34.0] What Dr. Bernstein is really worried about with the securities market in the COVID crisis. [0:31:49.0] The similarities between neurology and financial advisory and what motivated Dr. Bernstein’s transition. [0:35:04.0] The impact that the current crisis is likely to have on global trade. [0:38:01.0] Find out what Dr. Bernstein thinks about the US Central Bank’s crisis response. [0:39:24.0] The lessons that Dr. Bernstein has learned about communicating financial topics. [0:40:46.0]

As the expression goes, another day, another dollar. Today’s episode is a roundup of news and analysis with deeper dives into behavioural and risk-based market explanations, active management, and endowment investing models. We open with a book review of Essentialism: The Disciplined Pursuit of Less by Greg McKeown, a book that’s getting a lot of attention at the moment. Another topic that’s getting a lot of attention, we discuss how Tesla’s huge market cap growth makes it feel like it’s 1999. We also offer our opinions on why Tesla has been so highly valued despite increasing competition in the electric car market. Answering a listener question, we explore how Robinhood makes money through ‘payment for order flow’ and the debate about if this is in the retail client’s best interest. Following another listener question, we answer if the podcast suffers from confirmation bias and how you can never know the ‘why’ behind stock returns. We talk about risk versus behaviour market explanations and use sound clips from previous episodes to present views on this subject. We then discuss Yale and David Swensen’s endowment investment model, focusing on his strategy of finding uncorrelated asset classes and then hiring active managers to meet target allocations. We look at the model’s benefits and its similarities to Canada’s CCP before examining how Norway invests based on oppositional ideas of the marketplace. Near the end of the episode, we continue our conversation on spousal loans by listing more family income splitting strategies. Tune in to hear more from the financial world.   Key Points From This Episode: A quick book review of Essentialism: The Disciplined Pursuit of Less by Greg McKeown. [0:03:25] Key ideas of this book; being busy isn’t always a positive, and if you don’t prioritize your life then someone else will. [0:06:02] Why Tesla surpassing General Motors’ market cap makes it feel like it’s 1999. [0:07:32] Opinions on why Tesla has experienced such incredible growth. [0:09:06] How Robinhood makes money if they don’t charge any trade fees. [0:12:15] Discussion on whether Robinhood’s service benefits the end-user. [0:13:19] Dave Nadig’s take on Robinhood and why it’s a “tempest in a teapot.” [0:15:46] Answering the question; “does the podcast suffer from confirmation bias?” [0:17:30] How the podcast’s stance on behavioural versus risk-based explanations have softened. [0:18:38] Sound clips from previous episodes on the reasons for different stock returns. [0:21:00] Examining a paper arguing that active management can create value for investors. [0:23:10] Deep dive into our portfolio topic; Yale and the endowment investment model. [0:27:30] Why it’s so difficult to replicate David Swensen’s endowment investment success. [0:32:00] The correlation between endowment size and allocation to alternative asset classes. [0:34:30] How many endowment investment portfolios have performed poorly. [0:36:35] Differences between the Yale and Canadian endowment investment models. [0:40:15] How Norway operates the biggest wealth fund in the world. [0:45:40] How Norway’s model is completely at odds with the Yale endowment model. [0:48:20] Family income splitting opportunities in Canada that attract less tax. [0:52:00] [0:52:00] Why you should seek legal counsel when setting up family trusts and using family income splitting strategies. [1:00:05] Hear the crazy, bad financial advice of the week; Ponzi schemes are still selling. [1:06:15]