The Rational Reminder Podcast

Welcome to this week's Rational Reminded Podcast! Today we're diving into the recent CPPIB report that portrays actively managed funds in the most optimistic light. But before you trade in your index funds, we look at the methodologies and calculations employed by the report and show why there are a number of issues with their findings. Benjamin shares his proposal for an alternative analysis that employs a more risk appropriate benchmark, and we discuss why the report can be seriously misguiding. We also talk about the transitional issues that have result from MD Financial being taken over by Scotiabank and why some MD Financial clients have not been too pleased with it all. We tackle the issue of value versus growth stocks and look at a number of research papers that could explain the developments that have taken place in this regard. Nearing retirement and unsure when to take your CPP? Be sure to join us to find the answer to this complex question! Key Points From This Episode: The positive report about the active management strategy of the CPPIB. [0:01:19.0] Why there is a red flag about the calculations done for this report. [0:03:19.0] Benjamin's alternative analysis and how he built up a more risk appropriate benchmark. [0:05:43.0] The problem of CPP comparing a relatively safe portfolio with a much higher risk one. [0:09:02.0] CPPIB's argument for why they are investing in illiquid asset classes. [0:11:31.0] A few repercussions of MD Financial being taken over by Scotiabank. [0:16:16.0] Does value still make sense? Looking at the data of value relative to growth. [0:19:45.0] An overview of three research papers on on the overreaction hypothesis. [0:25:10.0] The complex question of when to take your CPP and when it's better to wait. [0:33:27.0] And much more!

On the Rational Reminder today we are joined by Ellen Roseman from The Toronto Star, who has been writing and working in the realm of Canadian personal finance and consumer rights for many years. We have a great chat about her work history, what has driven her career and what motivates her to continue to pursue her path of creating financial awareness for more people. We discuss the position of advocacy for consumer rights and how that translates into her everyday work, her most important and recent areas of action, the classes she is involved in teaching and her most recent book, titled Fight Back. Ellen weighs in on the topics of financial advice and how to seek out the best of it, actively managed funds and how she is involved FAIR Canada. We finish off with a fun bit about how Ellen found herself blocked on Twitter by Suze Orman and Dave Ramsey! For all this and more, listen in today! Key Points From This Episode: What it means to Ellens to be an advocate for consumer rights. [0:02:43.1] The most recent cause that Ellen has been championing through her work. [0:05:4] Three tips from Ellen's most recent book, Fight Back. [0:07:59.0] The class Ellen teaches at UFT, Investing for Beginners. [0:14:18.9] Ellen's attitude towards seeking advice and when it is necessary. [0:16:19.6] Bad investment advice and the cases that crop up the most for Ellen. [0:18:18.5] Some of the results of Ellen's course and how it is laid out. [0:21:05.4] Are actively managed mutual funds still holding the majority of Canadian assets? [0:26:03.2] A little about FAIR Canada and Ellen's work there. [0:27:55.4] Ellen's recent Twitter activity which led to get her getting blocked by Suze Orman. [0:32:14.5] A definition of success from our wonderful guest! [0:38:14.0] And much more!

Welcome back to the Rational Reminder Podcast! We're nearing our one-year anniversary, and we are still getting more listeners every episode and we have some incredible guests lined up for you! Today we are tackling more technical issues and some interesting topics overall. We explore the tax implications of VGRO or any of the asset allocation ETFs of Vanguard and iShares and discuss the scenarios in which it might be more advisable to configure the asset allocation that you want using a different form of fixed income and equities. We compare the tax rates on various funds and then dive into some literature on currency hedged global fixed income and what key role players have to say about diversification and dispersion. The spotlight is then diverted to disability insurance and we talk over whether it really is a necessity, what statistics show, and we advise you on the specific points to consider when looking for the right cover plan. For all of this and more, be sure to join us for this episode! Key Points From This Episode: The listener question about the tax efficiency of VGRO that keeps popping up. [0:01:58.0] The tax issues with premium bonds and how interest rates impact their value. [0:02:41.0] The benefits of the different ETFs that VGRO gets its bond market exposure from. [0:05:34.0] Buying VEQT or other equity ETFs as an alternative to buying VGRO. [0:07:49.0] Comparing the tax rates on funds and why tax efficiency is a vital consideration. [0:09:31.0] Some interesting research findings on currency hedged global fixed income. [0:12:21.0] Understanding the tax, liquidity and risk implications of GICs. [0:14:16.0] Is it possible to over-diversify? And important points on dispersion. [0:16:31.0] Considering disability insurance, what data shows and what do look for. [0:22:47.1] And much more! Read more on GICs replacing bonds here: https://www.pwlcapital.com/should-gics-replace-bonds-in-a-portfolio/

On today's episode, we are joined by Jaime Purvis, Executive Vice President at Horizons ETFs. Having been the company's third ever employee, he has worked at the company for nearly 24 years and provides an in-depth inside look into how Horizons has come to have the reputation of being ahead of the curve in the Canadian ETF market. He takes us through some of Horizons history, how they got into ETFs, as well as giving some insights into how these products were chosen. Given the instability of the market today, it is important not only to innovate, but also to leverage experience when creating ETFs, which is what Horizons seeks to do. With such high levels of unpredictability, they aim to provide their clients with as much knowledge as they can to make informed decisions, especially given the Canadian national budget proposal, which will likely affect ETFs across the board greatly. Along with this, Horizons has also created a variety of ETFs, based on products they anticipate will soon play a huge role in daily lives, such as robotics and AI. Despite casting this wide net, these decisions are still made with careful consideration, drawing on the company's extensive knowledge pool. This ability to continually innovate has put them at the forefront of the Canadian ETF market. To gain more insight into the world of ETFs and Horizons, join us today! Key Points From This Episode: How Horizons has swap structure works and why these swaps should not be feared. [0:06:55.0] What the rationale behind the Canadian government swap-based ETF targeting is. [0:11:45.0] What the redeemer's methodology is and the effect that is has. [0:16:08.0] What some of the risks associated with the swap-based ETF structure are. [0:23:56.0] The situations where it does not make sense to have a swap-based ETF. [0:28:43.0] How Horizons chooses their thematic ETFs. [0:30:35.0] What the deciding factors in closing a stock down are. [0:36:29.0] Why it is becoming increasingly difficult for starter ETFs to launch. [0:39:20.0] And much more!

Welcome back to your weekly reality check on sensible investing and financial decision making for Canadians. On today's episode we kick it off with a combo of a current topics, answering listener questions, and discussing the bad advice of the week. We then dive into the huge shift in the industry in the US in terms of fund flows into index funds out of active mutual funds. When you look at the overall US market cap, 13% of it is in index funds. This means that price discovery is being done by 87%. Inside this episode we unpack what that means for investments overall and how it differs in the Canadian market. We then take to a deeper discussion on our portfolio management topic of the week, which is looking at the relationship between price and future returns. We know that when prices are high, future returns tend to be low, so we dive into how that affects the context of pricing. We also take a look at the AQR study, Vanguard's dollar cost averaging versus lump sump study, and of course our planning topic for the week; renting versus buying a home and understanding the unrecoverable costs. Join us today and be sure not to miss out on today's incredible episode! Key Points From This Episode: Answering a listener question: using dividend stocks to pay down your mortgage. [0:03:41.0] Busting the beliefs and concepts of this week's worst investment advice. [0:06:33.0] The shift in the US market place: index funds versus active mutual funds. [0:11:27.0] Understanding the Grossman-Stiglitz Paradox: market efficiency. [0:15:40.0] Portfolio management topic of the week: relationship between price and future returns. [0:18:19.0] Discussing the Vanguard study: Lump sum versus dollar cost averaging. [0:24:18.0] A viral topic: understanding the debate of whether to rent or to buy a house. [0:28:28.0] And much more!

Today we're talking about a slightly different topic from the usual – used cars. We have Brad Boehme joining us and he is the Dealer Principal/General Manager at MyCar, a successful used cars dealership that has three different locations around the country. Brad shares with us how he got into the industry, how the 2008 financial crisis helped them to start the business, where they source their inventory from and why the profits are in the buying more than in the selling. Client experience is a high priority for them, and he tells us how they approach negotiations with clients and what he advises listeners to consider before leasing or buying a car. Tune in today to learn more about the business of used cars! Key Points From This Episode: An overview of Brad's education and how he got into the car business. [0:1:46.0] The different roles that taught Brad about remarketing and the ins and out of the trade. [0:02:54.0] Why the financial crisis of 2008 was an opportunity to start a used car business. [0:4:10.0] What volume of inventory they typically have between the three locations. [0:05:41.0] Where they source their cars from and why the buying process is so important. [0:07:23.0] The digital platforms they use to buy and sell and what the process involves. [0:08:55.0] How car dealerships make profits, where the margins are and understanding lot packs. [0:12:12.0] How they approach negotiations with clients and prioritize customer experience. [0:14:57.0] Buying and leasing new cars and how residuals work. [0:16:42.0] Factors to consider when you want to buy out a leased vehicle. [0:20:27.0] Weighing up whether it is best to lease or to buy used. [0:21:35.0] Advice for buying used cars and what protection there is for consumers. [0:24:58.0] The cars that are investments and that have a good growth rate on them. [0:29:42.0] The aspects of the business that are most rewarding to Brad and how he defines success. [0:31:25.0] And much more!

Welcome back to the podcast everybody! Today we are running through our weekly topics as usual, giving you the best, worst and everything in between on investing in Canada. We are talking a bit about the really interesting and important SOHN Investment Conference and what goes on there. We also go into why random stock picks, chosen by a thrown dart, beat Wall Street's elite and what we can learn from the SPIVA Report. From there we go pretty deep into the topic of low volatility and how its different permutations and readings can impact our investments. In our planning section of the program we talk about returns and how Canadian investing fits into the global landscape. Lastly, we finish off with our segment on the worst advice of the week, where we evaluate a claim that new kinds of ETFs with a new kind of value are what is needed in the market currently. For all this and more, be sure to join us today! Key Points From This Episode: A little about the SOHN Investment Conference. [0:01:51.3] Why the 'best' investment advisors cannot beat a dart. [0:04:42.4] Active funds versus index funds and the SPIVA report. [0:06:59.7] Low volatility stocks, a definition and understanding them better. [0:13:18.2] The most important metrics in the low volatility equation. [0:19:01.1] Average returns on mutual funds over time. [0:24:42.6] The worst advice of the week! [0:31:56.3] And much more!

Today on the show we are joined by Dr. Moira Somers, author of the book Advice That Sticks and expert on neuroscience, advising and leadership. Dr. Somers does a great job of unpacking all the different parts of her job and career and a multitude of topics from the financial advice field. She explains what it means to be a wealth psychologist and who makes up the bulk of her clientele. We then discuss the value of good, reliable financial advice and why most people seek it out and when. Dr. Somers tells us about the critical junctures that often lead people to find a new advisor and financial points of interest for people entering into a new relationship. We get into the value of face to face advice, trust and commitment between clients and advisors and why it is necessary to build a team of advisors with different areas of expertise and practice. We end off the episode with Dr. Somers offering some great advice about newly acquired wealth, better practices for every day and the three things we should always be considering. For all this and so much more, be sure to tune in today! Key Points From This Episode: What is a wealth psychologist? [0:01:42.4] How Dr. Somers got into the her current work and position. [0:02:35.8] Using Dr. Somers' book as an advisor and as a consumer. [0:04:25.5] The importance of a good financial advisor's perspective. [0:05:06.2] What are the factors that drive people to seek out financial advice. [0:06:38.5] Marriage, debt, finances and decisions. [0:08:49.6] Choosing the right advisor for your own needs and not just your own feelings. [0:11:30.2] Why so many advisors are fired in times of transition. [0:13:06.5] The value of face to face advice. [0:15:10.5] How to build a strong, trusting relationship with a client. [0:18:56.8] The level of selectiveness needed when choosing an advisor. [0:21:42.6] The benefits of building a diverse team of advisors. [0:23:53.1] Skills that are vital in advising on newly acquired wealth. [0:26:06.4] Smart lifestyle choices to improve your financial future. [0:28:55.7] The central trifecta of time, energy and money. [0:32:39.3] And much more!

Have you ever received hate mail or negative comments on your social media posts? We're here to tell you you're not alone. On today's show we are talking at length about your interactions online with people commenting on YouTube videos as well as a Globe and Mail article which is quite incredible. It's kind of a theme for this week. We dive into online trolls, those people whose sole purpose in life is to get you down. It's super interesting to read and obviously very entertaining for some to see. People are forever out there giving advice and it's up to you to decide who you're listen to and what advice you're taking. In wrapping up our talk, we also reveal our pick for the worst advice that we've heard in the previous week and why you need to stay far, far away. For all this and more, keep listening! Key Points From This Episode: Why an index fund should be better than an active fund. [0:04:00.0] How the index committee works. [0:06:30.0] Differences in the types of indexes. [0:07:29.0] Tax loss selling - buying something tracking a different index. [0:09:50.0] People promoting their own beliefs and opinions by commenting on articles and posts. [0:11:00.0] People following tribal leaders and why there's too much information out there. [0:12:32.0] Decision theory and why you can't base a decision on past outcomes. [0:13:00.0] Putting controversial content out there and "poking the bear" with dividend investing. [0:13:50.0] Being more wary of who you listen to and take advice from. [0:15:40.0] Who you should listen to - evidence based facts. [0:16:39.0] The concept of dividend growth investors. [0:19:30.0] Wanting the most reliable outcome possible. [0:21:25.0] Dividends as a guaranteed source of returns. [0:24:35.0] Using dividends as your spending rule. [0:26:25.0] The FIRE movement and why not all advice is good advice. [0:28:00.0] How irresponsible it is to use the 4% spending rule for your retirement goals. [0:29:35.0] Worst advice - when mutual funds make more sense than active funds. [0:34:45.0] And much more!

On the show today we welcome Dave Butler, who is now the co-CEO of Dimensional Fund Advisors. We have a great conversation about a wide range of topics from the beginnings of the firm, to his earliest involvement, how he was nearly in the NBA and the importance of trust and family. Dave takes us on a personal and professional journey in science-based investing, who his biggest influences and mentors are and how he found the path of fiducial advice after a few different careers early on. We discuss leadership, small cap stocks, efficient portfolios and the building of trust with clients as we scan through the last 40 years or so with our guest. Dave shares history and memories on some of the landmark events in the field and Dimensional's story, spilling the beans on his experiences with industry giants such as Gene Fama and Merton Miller. For a great conversation with an open, honest and inspiring person, be sure to tune in today! Key Points From This Episode: How Dave describes Dimensional. [0:02:32.2] Dave's basketball career before finance. [0:03:05.8] A 24 hour transition from sports to business. [0:06:46.7] Leadership, drive and team mentality. [0:09:38.6] The founding of Dimensional and the evolution of index funds. [0:11:32.5] The early days of small cap stocks. [0:17:40.1] Acting in the best interests of the clients and the rise of the fiduciary. [0:21:05.6] The first financial advisor at Dimensional! [0:23:59.0] Dave's own 'aha moment' and joining Dimensional. [0:25:42.6] Independent advice and always acting in the best interests of the client. [0:31:52.1] Building efficient investment portfolios for advisors. [0:35:51.1] Access to Dimensional funds and the indispensability of advisors. [0:37:33.5] Developing the essential element of trust. [0:38:51.1] The expansion of the advisor role over the last 25 years. [0:42:29.9] Dave's relationship with co-CEO Gerard O'Reilly. [0:45:22.4] The incredible experience of working with leading minds in finance. [0:47:50.8] Dave's definition of success. [0:51:38.0] And much more!