How asset class returns move in cycles with periods of above-average returns followed by periods of lower returns. How has the rise of passive indexing led to higher stock valuations, and what does that mean for markets?SponsorsNetSuite - Download the CFO’s Guide to AI and Machine LearningLegalZoom - Use code David10 to 10% offInsiders Guide Email NewsletterGet our free Investors' Checklist when you sign up for the free Money for the Rest of Us email newsletterOur Premium ProductsAsset CampMoney for the Rest of Us PlusShow NotesThe Equity Risk Premium: Nine Myths (JPM Series) by Rob Arnott—Research AffiliatesThe Greatest Scourge in Factorland: Revaluation Alpha = Fake Alpha (JPM Series) by Rob Arnott—Research AffiliatesPASSIVE INVESTING AND THE RISE OF MEGA-FIRMS by Hao Jiang, Dimitri Vayanos, and Lu Zheng—NBERLimits to Diversification: Passive Investing and Market Risk by Lily H. Fang, et al.—SSRNRelated Episodes503: U.S. Stocks Have Never Been This Overhyped or Expensive500: The S&P 500 Index and the Decade Ahead468: Lessons from Japan’s 34 Years of Stock Market Underperformance390: Are BlackRock and Vanguard Too Big and Powerful?234: Index But Don’t HerdSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Explore the factors behind the U.S. stock market's long-term success, including superior access to capital and a vibrant entrepreneurial spirit. Despite this edge, the discussion highlights the need for global diversification. The podcast delves into the unique characteristics of U.S. economic growth, revealing challenges like slowing productivity. It also critiques the current high valuations of U.S. stocks compared to international peers, raising questions about sustainability. Listeners can gain insights into navigating market cycles and honing investment strategies.

Recent interest in nuclear energy is fueled by initiatives like Microsoft's deal to reopen the Three Mile Island reactor. Nuclear power now contributes significantly to global electricity generation, especially in the U.S., amidst rising electricity demand driven by AI and climate change. The podcast highlights the efficiency and cost advantages of nuclear energy, while also tackling challenges such as waste management. Additionally, it explores investment opportunities in uranium and nuclear sectors, offering practical options for prospective investors.

Dive into the evolution of investment strategies, contrasting the classic 60-40 portfolio with today's complex approaches. Discover how personal experiences and historical shifts in asset management shape modern decision-making. Explore the role of risk tolerance in asset allocation, particularly the advantages of bonds in varying market conditions. Learn about the significance of strategic hiring and how financial education through podcasting influences navigating these intricate systems.

In a milestone discussion, the hosts dive into the S&P 500 Index, celebrating its 267% return over the last decade. They explore how U.S. stocks have outperformed non-U.S. counterparts and predict a potential 3% return for the coming decade. The conversation shifts to economic forces like AI and geopolitical risks shaping the market's future. Reflection on past financial insights highlights different investment strategies and emphasizes community engagement, setting the stage for more enriching content ahead.

The discussion centers around the economic struggles of Cuba and Argentina, highlighting Cuba's frequent energy blackouts and the impact of U.S. sanctions. Argentina's radical reforms under President Milei, aimed at combating soaring inflation, are examined in stark contrast to Cuba's stagnation. The conversation addresses critical factors for economic success, including the need for foreign investment and a balanced approach to social safety nets. It wraps up with insights on the overall health of the U.S. economy and the need for change in emerging markets.

Discover the transformative lessons learned over a decade of investing. Emphasizing the power of patience and long-term strategies, the discussion highlights the shift from busy trading to focused, meaningful investments. Learn the importance of diversifying into new asset classes and personalizing your approach based on your temperament. Documenting your journey and ignoring market noise emerge as key themes, urging investors to take their time and embrace the uniqueness of their investment path.

Exploring the flaws of 401(k) plans, the discussion highlights their inadequacy for retirement savings amidst market volatility. Defined benefit pension plans are contrasted with defined contribution schemes, revealing the rising challenges for lower-income workers. The conversation calls for a reformed system that enhances access and risk sharing. Listeners are encouraged to rethink retirement strategies and consider the importance of structured risk pooling, drawing comparisons to more effective systems in other countries.

Explore the concept of distinct risk buckets to balance loss aversion with lucrative opportunities. Discover the flaws in modern portfolio theory and why many successful investors embrace undiversified strategies. Delve into aspirational risk and its crucial role in wealth building. Learn how psychological factors influence risk perceptions and uncover the importance of a balanced approach to investment. Gain insights into personal risk, market dynamics, and the pursuit of aspirational growth for financial stability.

Explore how ETF sizes affect investment choices and the intricate link between quantitative easing and market dynamics. The podcast dives into the long-term consequences of QE, including rising national debt and its impact on individual wealth. Discover the surprising concept of market inelasticity, where small trades drive significant price changes. Learn how these factors contribute to stock market volatility and emphasize the importance of cash flow and dividends in investment strategies.