My Worst Investment Ever Podcast

I want to tell you about a midsize business owner drowning in consultants. He kept hiring them, one after another, each promising to turn things around. They’d show up, drop off a fancy report, and disappear. Meanwhile, his profit stayed flat, his team was overwhelmed, and he barely slept.One night, he was alone in his office, staring at a payroll he wasn’t sure he could cover. That’s when it hit him. He told me, “I realized it’s on me. No one’s coming to save my business.” That moment was his turning point. So, what’s yours?Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.The turning point every owner needsLet’s be real: hoping someone else will fix your problems is tempting. A consultant, a new hire, maybe even some magic software. But here’s the truth: no one will care about your business as much as you do. Consultants can advise, pinpoint blind spots, and maybe even hand you a plan. But if you don’t act, nothing changes.I’ve seen owners spend thousands on experts only to shelve their advice because it felt too hard or the timing wasn’t “perfect.” Waiting for the right moment is a trap. Your business doesn’t have time for that. The problems are piling up: low margins, stressed teams, endless emergencies, they’re not going away on their own. You have to step up.Your calendar tells the truthI know what you’re thinking: “I’m already doing everything I can!” But are you? Pull up your calendar right now. What does it say? If it’s packed with meetings, emails, and putting out fires, you’re probably not leading; you’re reacting.Your calendar tells the truth about your priorities. If there’s no time blocked for profit-focused work, like reviewing your P&L or cutting a bloated expense, you’re not owning the future of your business.One client I worked with swore he had no time for strategy. His calendar showed 12 hours a week chasing emergencies, zero on profit. We carved out just 90 minutes a week to review his financials. Within months, his managers solved problems without him, and the whole business felt calmer and more focused. That’s the power of taking charge.Here’s the thing: you can’t pay someone to care as much as you do. You can hire the best accountant and the sharpest operations manager, but responsibility for your business’s success rests with you.It’s not about working harder; it’s about working smarter. Start small. Pick one profit-related task this week. Maybe it’s canceling an unused subscription, renegotiating a vendor contract, or reviewing your pricing. Do it by Friday. One task, done well, can shift your momentum.A client thought he needed a complete overhaul to boost profit. Instead, we started with one thing: he cut a $900 monthly software he barely used. That small win gave him the confidence to tackle bigger issues.Start small, lead strongYour team is watching you, too. They feed off your clarity and energy. If you’re scattered, putting out fires, they’ll be scattered too. But they’ll follow if you show up focused with a clear plan. That client I mentioned. Whose calendar was filled with firefighting?Once he started those weekly financial reviews, his team noticed. They started coming to meetings prepared, pitching ideas to save money. Your leadership sets the tone. When you own your business’s future, you also allow your team to step up.Owning your business isn’t just about responsibility; it’s your biggest advantage. No one knows your customers, team, or vision like you do. That’s your edge. But you have to use it. Stop waiting for a savior. Stop hoping the market will turn or a new hire will fix everything. The power to change your business is in your hands right now.So, here’s your action step for this week: open your calendar and block 30 minutes to tackle one profit task. Review your P&L and look for one cost to cut. Maybe it’s calling a vendor to negotiate a better rate. Just do it. That’s how you start owning your business again.You’re ready to step up, but here’s the catch: what if your business is already leaking cash? In our next episode, we’ll uncover the hidden ways your company is losing money and why waiting even one more month could cost you everything. Don’t miss it.ActionCut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit. Andrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.LEARNING: The dividend policy is irrelevant to stock returns. “Stock prices tend to rise in the month before they pay the dividend, because dumb retail investors overvalue dividends, and then they tend to revert back after the dividend gets paid.”Larry Swedroe In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying StocksIn this chapter, Larry discusses why many investors prefer cash dividends, especially those using a cash flow approach to spending.Larry explains that experts have established that dividend policy should be irrelevant to stock returns, which is supported by historical evidence. Stocks with the same exposure to common factors (such as size, value, momentum, and profitability/quality) have had the same returns, whether they pay dividends or not. Despite theory and evidence, many investors express a preference for dividend-paying stocks.The fallacy of the free dividendAs Larry explains, investors tend to assume that dividends offer a safe hedge against the large price fluctuations that stocks experience. However, this assumption ignores that the dividend is offset by the fall in the stock price—the fallacy of the free dividend is a common misconception in the investment world.Larry adds that stocks with the same “loading,” or exposure, to the four factors (size, value, momentum, and profitability/quality) have the same expected return regardless of their dividend policy. This has important implications because about 60% of US and 40% of international stocks do not pay dividends.Thus, any screen that includes dividends results in far less diversified portfolios than they could be if they had not included dividends in the portfolio design. Less diversified portfolios are less efficient because they have a higher potential dispersion of returns without any compensation in the form of higher expected returns.Taxes matterLarry notes that what is particularly puzzling about the preference for dividends is that taxable investors should favor the self-dividend (by selling shares) if cash flow is required. Taxes play a crucial role in investment decisions, and understanding their implications is essential for making informed choices.Even in tax-advantaged accounts, investors who diversify globally (the prudent strategy) should prefer capital gains because the foreign tax credits associated with dividends have no value in tax-advantaged accounts.Why do investors still prefer dividends?Hersh Shefrin and Meir Statman, two leaders in behavioral finance, attempted to explain the behavioral anomaly of a preference for cash dividends. The first explanation is that, in terms of their ability to control spending, investors may recognize that they have problems with the inability to delay gratification.To address this problem, they adopt a cash flow approach to spending—they limit their spending to only the interest and dividends from their investment portfolio. In other words, the investor desires to defer spending but knows he doesn’t have the will, so he creates a situation that limits his opportunities and, thus, reduces the temptations.The prospect theoryThe second explanation of why investors prefer dividends is based on “prospect theory.” Prospect theory states that people value gains and losses differently. As such, they will base decisions on perceived gains rather than losses.Thus, if a person was given two equal choices, one expressed in terms of possible gains and the other in potential losses, they would choose the former. Because taking dividends doesn’t involve selling stock, it’s preferred to a total return approach, which may require self-created dividends through sales. The reason is that sales might affect the realization of losses, which are too painful for people to accept (they exhibit loss aversion).Further readingMerton Miller and Franco Modigliani, “Dividend Policy, Growth, and the Valuation of Shares,” Journal of Business (October 1961).Hersh Shefrin and Meir Statman, “Explaining Investor Preference for Cash Dividends,” Journal of Financial Economics (June 1984).Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to OutperformEnrich Your Future 01: The Determinants of the Risk and Return of Stocks and BondsEnrich Your Future 02: How Markets Set PricesEnrich Your Future 03: Persistence of Performance: Athletes Versus Investment ManagersEnrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?Enrich Your Future 05: Great Companies Do Not Make High-Return InvestmentsEnrich Your Future 06: Market Efficiency and the Case of Pete RoseEnrich Your Future 07: The Value of Security AnalysisEnrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market ReturnEnrich Your Future 09: The Fed Model and the Money IllusionPart II: Strategic Portfolio DecisionsEnrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’tEnrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of SkillEnrich Your Future 12: When Confronted With a Loser’s Game Do Not PlayEnrich Your Future 13: Past Performance Is Not a Predictor of Future PerformanceEnrich Your Future 14: Stocks Are Risky No Matter How Long the HorizonEnrich Your Future 15: Individual Stocks Are Riskier Than You BelieveEnrich Your Future 16: The Estimated Return Is Not InevitableEnrich Your Future 17: Take a Portfolio Approach to Your InvestmentsEnrich Your Future 18: Build a Portfolio That Can Withstand the Black SwansEnrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be SafeEnrich Your Future 20: Passive Investing Is the Key to Prudent Wealth ManagementPart III: Behavioral Finance: We Have Met the Enemy and He Is UsEnrich Your Future 21: Think You Can Beat the Market? Think AgainEnrich Your Future 22: Some Risks Are Not Worth TakingEnrich Your Future 23: Seeing Through the Frame: Making Better Investment DecisionsEnrich Your Future 24: Why Smart People Do Dumb ThingsEnrich Your Future 25: Stock Crashes Happen—Be PreparedEnrich Your Future 26: Should You Invest Now or Spread It Out?Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over ProbabilitiesEnrich Your Future 28 & 29: How to Outsmart Your Investing BiasesAbout Larry SwedroeLarry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInXWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

I, Coffee: The Capitalist Miracle Behind Your Morning CupI am the cup of coffee warming your hands right now. A simple drink with a story no government could brew. My journey from a cherry on a tree to your morning ritual is a testament to freedom, ambition, and human ingenuity.I exist not because of a single plan by a government or business but because of countless decisions, risks, and exchanges made by individuals and companies.I am the child of voluntary trade, fierce competition, and the pursuit of profit, all working without a master plan. These forces grow me, move me, roast me, and deliver me to you.No single person could make me from start to finish, yet billions of cups like me are made every day.Private ownership gives rise to ambitionI began as a cherry on a small farm in Costa Rica, grown by Manuel. Because he owns the land, he has reason to think long-term, studying prices, testing new methods, and planting varieties that take years to bear fruit. He’s not just farming for today; he’s betting on tomorrow. That’s what capitalism rewards: patience, planning, and the courage to take risks.Manuel’s commitment to tomorrow propels his green coffee bean across borders, where profit and competition transform local harvests into global goods.Profit connects personal effort to progressOnce picked, my journey begins from fruit to finished drink. I pass through the hands of workers and businesses, each driven by their own needs. No one is in it for love. They’re in it for a paycheck. And that’s precisely the point. The drive to earn a living keeps the whole system in motion.Profit isn’t greed; it’s survival. Prices tell people what is scarce and wanted; markets change direction overnight. To survive, you adapt. To win, you innovate. That’s how competition works; it’s the quiet engine pushing new ideas forward. In capitalism, you don’t get to stand still. Evolve, and you’ll thrive. Stay stuck, and you’ll disappear.Trade works without central controlAs I leave the processing facility, my journey goes global. I cross oceans and borders. The people along the way live in different countries, speak different languages, follow different beliefs, and may even hate each other, yet they still cooperate. Peace is the quiet miracle of capitalism. The market’s invisible hand turns individual pursuits into shared progress.Each region plays to its strengths. Manuel grows coffee in Costa Rica. Luigi builds espresso machines in Italy. They’ve never met, but through trade, they both win. By trading rather than trying to do everything alone, both end up better off.Consumers determine what survivesAt the roasting factory, experts dial in flavor. The process begins with precise heat control, powered by machines and fuels from distant places. Roasters adjust their methods to meet customer expectations because you, the consumer, decide who wins.I don’t exist by chance. Every choice, a dark roast or a decaf, oat milk or cream, sends a signal. You’re the boss here. I’m shaped by what you sip. That’s why quality matters. Even minor errors lead to waste, lost sales, and the risk of being replaced by someone who gets it right.Every job contributes to final valueEach role, from warehouse staff to maintenance teams, shapes the outcome. The technician who calibrates the roaster’s heat, the quality inspector who catches defects, and the logistics coordinator who ensures delivery affect how I taste in the end.In this system, no task is too small. A green coffee warehouse worker in Indonesia who rotates inventory properly helps ensure I arrive fresh in Denver. One mistake and a competitor gets the next order.Specialization turns effort into excellenceAt the café, baristas add their expertise, turning a roasted bean into your favorite cup: a bold black coffee, a tangy espresso, or a smooth latte. They steam, clean, pour, and seal. And they know: just one overheated shot or cracked lid, and everything I’ve been through goes to waste.That’s the harsh reality of capitalism. Each choice leads towards profit or loss. Accountability isn’t imposed; it’s automatic.Competition enforces accountabilitySome argue that markets need heavy rules, but I’ve seen competition shape behavior better than any bureaucracy. The people who move me act responsibly not because they’re forced to, but because trust pays off. Break that trust, and the market makes you pay.Even sustainability depends on you. When you choose shade-grown beans or Rainforest Alliance-certified coffee, farms change. Your fair-trade purchases raise wages. Your demand for carbon-neutral shipping pushes the whole system forward. I’m not made greener by policy memos; I’m made greener by you. That’s capitalism.Voluntary exchange creates something greaterSo here I am, your coffee, warming your hands just as I began this story. I started as a simple cherry on a tree, and through countless individual decisions, I’ve become your morning ritual. No one commanded my journey from Costa Rica to your cup, yet I arrived through millions of voluntary exchanges.I’m not just a drink but living proof that capitalism, at its best, transforms strangers into partners and simple beans into something extraordinary.As you sip me slowly, remember: every drop represents a quiet miracle of human cooperation, brewed not by force but by freedom, the same freedom that will bring your cup tomorrow and every morning after.Essay by Andrew Stotz, loosely adapted from Leonard E. Read’s “I, Pencil”Andrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

BIO: Collin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk.STORY: Collin inherited some money from his grandmother at 18. When two of his college friends came to him with the idea of creating a TV show, but on the internet, he cut them a check that was way too much than what he should have. The business didn’t work.LEARNING: If you’re going to make a mistake in something, make it yourself and learn from it. “If I’m going to make a mistake, I will make it myself. I will put my blood, sweat, and tears into it.”Collin Plume Guest profileCollin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk. Founder of Noble Gold Investments and My Digital Money, he champions alternative assets like metals, real estate, and crypto. He is a dedicated family man who prioritizes integrity and client success in navigating complex financial markets.Worst investment everCollin inherited some money from his grandmother at 18. He did some traveling and a few other things with the money. Two of Collin’s college friends came to him with the idea of creating a TV show but on the internet. In theory, it made a lot of sense. They raised money, and Collin cut them a check that was way too much than what he should have.Unfortunately, Collin didn’t fully engage with the idea beyond writing the check. He didn’t foresee the potential pitfalls. The business, however, didn’t pan out. Collin’s deepest regret in this investment was not actively participating in the business and learning from it. He lost money and the opportunity to grow as an entrepreneur.Lessons learnedIf you’re going to make a mistake in something, make it yourself. Don’t give money to someone else to make a mistake on your behalf—they will learn from it, you won’t.Teach your kids how to make money from an early age.Andrew’s takeawaysFamilies should take it upon themselves to protect the next generation.Actionable adviceIf you get that opportunity, take it and learn from it, but know that if you invest, you’ll probably never see $1 come back to you. Also, you could jump on the bandwagon of a totally new and exciting idea, but there are some successful businesses out there that you can invest in.Collin’s recommendationsCollin advises seeking out new mentors in different areas every year. Continuous learning and growth through mentorship is a powerful tool for personal development, and Collin himself has found it invaluable in his journey as an entrepreneur.No.1 goal for the next 12 monthsCollin’s number one goal for the next 12 months is to train some people to take over more of the day-to-day operations in two of his businesses. On a personal level, he wants to go on one of the big hiking trips he’s never been able to do.Parting words “I love this show—everything about it. You’re a great guy to talk to. I appreciate you having me on; it’s been a pleasure to be with you.”Collin Plume [spp-transcript] Connect with Collin PlumeLinkedInInstagram XYouTubeBook WebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.LEARNING: Smart people are humble and able to admit when they have made a mistake. “As humans, we make all kinds of behavioral errors. Thus, it should not be surprising that we make them when investing. Smart people are, however, humble and able to admit when they have made a mistake.”Larry Swedroe In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.Chapter 28: Buy, Hold, or Sell and the Endowment EffectIn this chapter, Larry discusses one of the more frequent risk management problems: holding or selling an asset and how the endowment effect affects this decision.The endowment effectLarry begins by empathetically explaining how the endowment effect, a common behavioral quirk, often causes individuals to make poor investment decisions. For example, it leads investors to hold onto assets they wouldn’t purchase if they didn’t already own them. Whether it’s because the assets don’t fit into their asset allocation plan or because they view them as overpriced, they’re no longer the best choice from a risk/reward perspective.Larry shares the most common example of the endowment effect. People are often reluctant to sell stocks or mutual funds that they inherited or a deceased spouse purchased. Many people will usually say, “I can’t sell that stock; it was my grandfather’s favorite, and he’d owned it since 1952.” Or, “That stock has been in my family for generations.” Or, “My husband worked for that company for 40 years. I couldn’t possibly sell it.”Another example of an investor subject to the endowment effect is stock accumulated through stock options or some type of profit-sharing/retirement plan.How to avoid the endowment effectLarry says you can avoid the endowment effect by asking: If I didn’t already own this asset, how much would I buy today as part of my overall investment plan? If the answer is, “I wouldn’t buy any,” or, “I would buy less than I currently hold,” you should sell. The rule applies whether the asset is a bottle of wine, a stock, a bond, or a mutual fund.He adds that you should only own an investment if it fits into your overall asset allocation plan.Chapter 29: The Drivers of Investor BehaviorIn this chapter, Larry discusses how investors make errors simply because they are humans prone to behavioral mistakes. He reviews some of the more common ones to help you avoid making such mistakes.Ego-driven investmentsIn this type of mistake, investors want more than returns from their investments.For instance, some investors continue investing in hedge funds, despite their lousy performance, for the same reasons they buy a Rolex or carry a Gucci bag with an oversized logo—they are expressions of status, available only to the wealthy.Such investment decisions are ego-driven, with demand fueled by the desire to be a “member of the club.”The desire to be above-averageOverconfidence in our abilities is a very healthy attribute. It makes us feel good about ourselves, creating a positive framework for navigating life’s experiences. Unfortunately, being overconfident in our investment skills can lead to investment mistakes—and so does what seems to be the all-too-human desire to be above average.Overconfidence is such a huge problem that it even causes people to delude themselves—the truth is so painful that the delusion allows them to continue to be overconfident. It leads to unrealistic optimism, causing investors to concentrate their portfolios on a handful of stocks rather than gain the benefits of diversification (the only free lunch in investing).Framing the problemAccording to Larry, many errors we make as human beings and investors result from how we frame problems. “Framing the problem” refers to the way we perceive and interpret a situation, which can significantly influence our decisions. If a situation is framed from a negative viewpoint, people tend to focus on that. On the other hand, if a problem is framed positively, the results are pretty different. Consider the following example from Jason Zweig’s Your Money & Your Brain:Pregnant women are more willing to agree to amniocentesis if told they face a 20% chance of having a Down syndrome child than if told there is an 80% chance they will have a normal baby.Regarding investing, the so-called professionals are framed as having all the advantages. The average investor then believes they stand no chance against the “professionals” and invests in active funds.However, Larry quotes various investment gurus and researchers who believe that investors without knowledge of the stocks they buy can earn market returns by investing in index funds. Since the average fund underperforms its benchmark index fund, and the average active investor underperforms the very funds in which they invest, the know-nothing index investor earns above-average returns by simply earning market returns.Confirmation biasAnother major cause of investment errors is “confirmation bias,” the tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true while disregarding evidence that is contrary to them. As a result, people gather evidence, recall information selectively from memory, and interpret it in a biased way.For instance, investors who believe they can pick winning stocks are regularly oblivious to their losing record and record wins as evidence confirming their stock-picking skills. However, they neglect to record losses as disconfirming evidence. Similarly, investors may ignore negative news about a company they are invested in, focusing only on positive information that supports their investment decision.Be humble and admit your mistakesIn conclusion, Larry reiterates that we’re all human and prone to behavioral mistakes. However, he underscores the importance of humility in admitting when we’ve made a mistake. He encourages us to see learning from our errors as a cause for celebration, as it means we’ll be less wrong in the future. He reminds us that what sets us apart from fools is our ability to learn and not repeat our mistakes, expecting different outcomes.Further readingMeir Statman, “What Investors Really Want,” McGraw-Hill, 2010.Jonathan Burton, “Investment Titans,” McGraw-Hill, 2000.Jason Zweig, “Your Money and Your Brain,” Simon and Schuster, 2008.Peter Lynch, “Is There Life After Babe Ruth,” Barron’s, April 2, 1990.1993 Berkshire Hathaway Annual Report.Larry Swedroe and R.C. Balaban, “Investment Mistakes Even Smart People Make and How to Avoid Them,” McGraw-Hill, 2011.Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to OutperformEnrich Your Future 01: The Determinants of the Risk and Return of Stocks and BondsEnrich Your Future 02: How Markets Set PricesEnrich Your Future 03: Persistence of Performance: Athletes Versus Investment ManagersEnrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?Enrich Your Future 05: Great Companies Do Not Make High-Return InvestmentsEnrich Your Future 06: Market Efficiency and the Case of Pete RoseEnrich Your Future 07: The Value of Security AnalysisEnrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market ReturnEnrich Your Future 09: The Fed Model and the Money IllusionPart II: Strategic Portfolio DecisionsEnrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’tEnrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of SkillEnrich Your Future 12: When Confronted With a Loser’s Game Do Not PlayEnrich Your Future 13: Past Performance Is Not a Predictor of Future PerformanceEnrich Your Future 14: Stocks Are Risky No Matter How Long the HorizonEnrich Your Future 15: Individual Stocks Are Riskier Than You BelieveEnrich Your Future 16: The Estimated Return Is Not InevitableEnrich Your Future 17: Take a Portfolio Approach to Your InvestmentsEnrich Your Future 18: Build a Portfolio That Can Withstand the Black SwansEnrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be SafeEnrich Your Future 20: Passive Investing Is the Key to Prudent Wealth ManagementPart III: Behavioral Finance: We Have Met the Enemy and He Is UsEnrich Your Future 21: Think You Can Beat the Market? Think AgainEnrich Your Future 22: Some Risks Are Not Worth TakingEnrich Your Future 23: Seeing Through the Frame: Making Better Investment DecisionsEnrich Your Future 24: Why Smart People Do Dumb ThingsEnrich Your Future 25: Stock Crashes Happen—Be PreparedEnrich Your Future 26: Should You Invest Now or Spread It Out?Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over ProbabilitiesAbout Larry SwedroeLarry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInXWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your Influence

BIO: Stu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting.STORY: Stu discusses his updated book edition, which caused a worldwide stir when the first edition was released in 2016. He talks about how to get a meeting with anyone.LEARNING: Be audacious and try to get that meeting that seems impossible. “When trying to get meetings, we have to make human-to-human connections. We must be audacious and surprise people and have them just say, wow.”Stu Heinecke Guest profileStu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting. A hall-of-fame-nominated marketer and Wall Street Journal cartoonist, he is known for oblique perspectives and utterly unique strategies for selling, entrepreneurship, explosive growth, and, of course, getting meetings.Worst investment everIn today’s episode, Stu, who previously appeared on the podcast on episode Ep503: Never Cling to One-to-One Leverage, discusses his updated book edition, which caused a stir worldwide when the first edition was released in 2016. Stu shares how his book has inspired a global community, including the founder of Reach Desk, who raised $48 million in funding, and many others who have found inspiration in his work.AI and B2B salesStu highlights the transformative role of AI in B2B sales, a significant development that is miraculously changing the landscape. As AI becomes more prolific, Stu believes there will be a clamor for uniquely human things.He underscores the importance of human-to-human connections and creativity in making audacious and surprising efforts to get meetings in the new AI world, ensuring the audience is well-informed and prepared for the future.Creativity and overcoming self-doubtGetting people to meet you can be overwhelming, and self-doubt may creep in occasionally. Stu encourages people to make breaking through part of their character. He adds that having a sense of mischief and adventure is essential because if you can’t get a meeting, you can’t sell. Stu urges people to get as good as possible at getting meetings and reaching out to people that they think they would never be able to reach. Just be audacious and try.Stu also emphasizes the importance of involving assistants in outreach efforts and making them part of the process to extend your reach.No.1 goal for the next 12 monthsStu’s number one goal for the next 12 months is to get into bodybuilder shape.Parting words “One of the best investments you can make is to get good at getting meetings with people that you might think are completely out of reach. Reach out, and you’ll see they aren’t out of reach.”Stu Heinecke Connect with Stu HeineckeLinkedInWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.LEARNING: Use Pascal’s wager to avoid making devastating mistakes. “You have to think about the cost of being wrong versus giving up on that hope or the ability to brag about how you pick the best-performing stock. Pascal’s wager gives you the right way to think about the answer. And then, you get to enjoy your life much more.”Larry Swedroe In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.Chapter 27: Pascal’s Wager and the Making of Prudent DecisionsIn this chapter, Larry discusses Pascal’s wager, a suggestion posed by the French philosopher Blaise Pascal that emphasizes the importance of considering the consequences of decisions rather than just the probability of outcomes.Pascal’s wagerIn Pascal’s wager, the philosopher asked how we should act when we cannot prove or disprove if God exists. To answer this question, the philosopher said: if a Supreme Being doesn’t exist, then all the devout have lost is the opportunity to fornicate, imbibe, and skip a lot of adult church services. But if God does exist, then the atheist roasts in hell for eternity.Pascal concluded that the consequences of your actions matter far more than whatever you think the probabilities of the outcomes might be.Using Pascal’s wager to make financial decisionsPascal’s wager empowers individuals to make informed financial decisions. It encourages us to carefully consider the consequences before accepting the risks involved in case we are wrong. This approach can be applied to a wide range of financial decisions, instilling confidence in our choices.Buying life insuranceImagine you’re an average 28-year-old. You got married a few years ago and have your first child. Now, you must decide whether you should have life insurance. If you buy the life insurance, you know with a very high degree of certainty for the next 40 years, you’re going to be paying away a premium to the life insurance company and foregoing their earnings that you could get by taking that money investing in the stock market and maybe get a seven to 10% per annum return.Yet, most people buy the insurance because of the consequences of their being wrong, and they happen to be unlucky enough to die, either through an accident or some disease that wasn’t forecasted for them. Then, their wives and children may live in poverty. And that’s just a consequence that’s not acceptable.Asset allocationIn another example, Pascal discusses someone who has already achieved sufficient wealth to support a quality lifestyle. Should they focus on preserving capital by allocating a low amount to risky assets like equities or try to accumulate even more wealth by allocating a significant amount to risky assets?To decide on which side of Pascal’s wager this individual wants to be with their portfolio, Larry advises to consider this insight from author Nassim Nicholas Taleb: “One cannot judge a performance in any given field by the results but by the costs of the alternative (i.e., if history played out differently).Long-term care insuranceLarry also examines how Pascal’s wager can help us decide whether to purchase long-term care insurance. According to Larry, say a couple, both 65 years old, has a portfolio that is highly likely to provide sufficient assets to maintain their desired lifestyle if neither ever needs long-term care. If one or both need long-term care for an extended period, the portfolio will likely be strained or depleted.If no insurance is needed, the costs of purchasing a long-term care policy increase the odds of running out of money by just 3% (from 94% to 91%). On the other hand, if long-term care is needed and no insurance is purchased, the odds of running out of money increase by 20%—the odds of success fall from 94% to 74%.That is almost seven times the 3% increase in the likelihood of failure caused by the purchase of insurance. It seems clear that the purchase of the insurance is a prudent decision.Purchasing TIPS or nominal bondsAnother decision investors should use Pascal’s wager to make is whether to purchase TIPS or nominal bonds. According to Larry, if you hold long-term nominal bonds, you win if deflation shows up (or even if inflation is less than expected). You lose, however, if inflation is greater than expected because your portfolio might not provide sufficient income to maintain your desired lifestyle.On the other hand, with TIPS, you win either way. If inflation shows up, the return of your bonds keeps pace. Even with deflation, they do at least as well as in inflation because TIPS mature at par.The consequences of your decision should dominate the probability of outcomes, making TIPS the prudent choice in most cases.Let Pascal whisper in your earIn conclusion, Larry encourages investors to use Pascal’s wager to avoid making devastating mistakes that are sometimes impossible to recover from.Further readingJonathan Clements, “The Little Book of Main Street Money,” Wiley, 2009.Nassim Nicholas Taleb, “Fooled by Randomness,” W. W. Norton & Company, 2001.Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to OutperformEnrich Your Future 01: The Determinants of the Risk and Return of Stocks and BondsEnrich Your Future 02: How Markets Set PricesEnrich Your Future 03: Persistence of Performance: Athletes Versus Investment ManagersEnrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?Enrich Your Future 05: Great Companies Do Not Make High-Return InvestmentsEnrich Your Future 06: Market Efficiency and the Case of Pete RoseEnrich Your Future 07: The Value of Security AnalysisEnrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market ReturnEnrich Your Future 09: The Fed Model and the Money IllusionPart II: Strategic Portfolio DecisionsEnrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’tEnrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of SkillEnrich Your Future 12: When Confronted With a Loser’s Game Do Not PlayEnrich Your Future 13: Past Performance Is Not a Predictor of Future PerformanceEnrich Your Future 14: Stocks Are Risky No Matter How Long the HorizonEnrich Your Future 15: Individual Stocks Are Riskier Than You BelieveEnrich Your Future 16: The Estimated Return Is Not InevitableEnrich Your Future 17: Take a Portfolio Approach to Your InvestmentsEnrich Your Future 18: Build a Portfolio That Can Withstand the Black SwansEnrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be SafeEnrich Your Future 20: Passive Investing Is the Key to Prudent Wealth ManagementPart III: Behavioral Finance: We Have Met the Enemy and He Is UsEnrich Your Future 21: Think You Can Beat the Market? Think AgainEnrich Your Future 22: Some Risks Are Not Worth TakingEnrich Your Future 23: Seeing Through the Frame: Making Better Investment DecisionsEnrich Your Future 24: Why Smart People Do Dumb ThingsEnrich Your Future 25: Stock Crashes Happen—Be PreparedEnrich Your Future 26: Should You Invest Now or Spread It Out?About Larry SwedroeLarry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInXWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

BIO: Wes Schaeffer is The Business Fixer®. He sees the message you want to convey but can’t find the words and gives them to you because if you don’t toot your own horn, there is no music.STORY: Wes discusses the evolving landscape of business and marketing, emphasizing the importance of human connection, trust, and information.LEARNING: Future-proof your business with trust, strategy, and agility. “It is time to spring clean your business. Get light, get lean, get focused, and build a legacy.”Wes Schaeffer Guest profileWes Schaeffer is The Business Fixer®. He sees the message you want to convey but can’t find the words and gives them to you because if you don’t toot your own horn, there is no music. He’s a brown belt in Brazilian Jiu-Jitsu and the president of his HOA, so mow your lawn and pay attention to what this AF veteran, father of 7, and grandfather of three has to say. He’s written a couple of books, spoken around the world, published over 700 podcasts, and was once duct-taped to a bar in Korea.Join his free 12 Weeks to Peak program designed to help individuals and teams build a life cadence and achieve their goals.Worst investment everIn today’s episode, Wes, who previously appeared on the podcast on episode Ep280: Do Your Research and Trust Your Gut, discusses the evolving landscape of business and marketing, emphasizing the importance of human connection, trust, and information.Effects of technology on marketingWes starts the discussion by noting how the salesperson’s role has evolved since the internet came around. Before the internet, he says, salespeople were the keepers of the knowledge. If you wanted to buy a car, you had to go down to the dealership. Now you have CarFax and online shopping in comparison, and you can compare models and negotiate before you get there. People freely share information online, so salespeople are no longer the keeper of knowledge.Despite the abundance of knowledge, buyers often find themselves in a state of confusion. In the past, this confusion stemmed from a lack of information. However, in today’s digital age, the problem has shifted to an overwhelming amount of information.This is where the salesperson’s role becomes crucial. As a salesperson, you have the opportunity to step in as a trusted advisor. Your role is to help your customers navigate the sea of information available online, assuage their fears, and instill in them the confidence that they are making the right decision.The role of trust and information in marketingAndrew and Wes delve into the significance of trust in marketing, with Wes underlining that trust is the cornerstone of purchasing decisions. He points out that despite the advancements in technology, people still crave individualized treatment.As a salesperson, it’s crucial to ask yourself: What am I doing to connect with the human being on the other side of the screen? This connection, built on trust, is what reassures customers and gives them the confidence to make a purchase.Wes reminds salespersons that customers don’t want to be treated like numbers, so they should be consistent and congruent in their approach to marketing and spend enough time building trust.Adapting to market changes and future-proofing businessesWes and Andrew discuss the impact of global competition, particularly from China, on family businesses. They explore the idea of repositioning companies from low-cost leaders to higher-value-added brands, emphasizing the need for differentiation and strategic planning. Wes suggests leveraging current political and technological changes to improve business efficiency and adapt to new market realities.They also discuss the importance of businesses being nimble and responsive to market changes, with Wes highlighting the need for businesses to streamline and focus on their core strengths. This proactive approach ensures that businesses are not just surviving but thriving in the face of market shifts.Building a life cadence and personal developmentWes introduces his program, “12 Weeks to Peak,” which helps individuals create a life cadence by scheduling time for self-improvement, relaxation, and other essential activities. This program has been proven to enhance productivity, reduce stress, and improve overall well-being.He shares insights from successful individuals like Warren Buffett and sports figures who maintain consistent routines and regimens.Wes emphasizes the importance of intentionality in life, suggesting that people should schedule time for activities that matter to them, such as calling friends and family.Andrew’s takeawaysYou can build a happy life and great work.If you’re sitting in a lousy job you’re unsatisfied with, leave.No.1 goal for the next 12 monthsWes’s number one goal for the next 12 months is to ensure that his 12 Weeks to Peak program becomes recognizable. He aims to achieve this by helping more people create a life cadence that prioritizes self-improvement, relaxation, and other essential activities. By doing so, he hopes to make a significant impact on people’s lives and well-being.Parting words “Just take action. If this speaks to you, then do it. Don’t wait. You’ve got to become a good decision-maker, so listen to your little voice.”Wes Schaeffer [spp-transcript] Connect with Wes SchaefferLinkedInFacebookInstagram XPodcastYouTubeBook WebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 26: Dollar Cost Averaging.LEARNING: Invest all your money whenever you have it. “If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, you should put all your money in whenever you have it to invest.”Larry Swedroe In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 26: Dollar Cost Averaging.Chapter 26: Dollar Cost AveragingIn this chapter, Larry discusses why lump sum investing is better than dollar cost averaging.Should you invest your money all at once or spread it over time?According to Larry, the issue of Dollar Cost Averaging (DCA) typically arises when an investor receives a large lump sum of money and wonders if they should invest it all at once or spread it over time. The same problem arises when an investor panics and sells when confronted with a bear market, but then there are two questions: How does the investor decide when it is safe to reenter the market? And does she reinvest all at once or by DCA?Constantinides, a University of Chicago professor in the 1960s, studied this question. He demonstrated that DCA is an inferior strategy to lump sum investing. He termed it logically dumb as it makes no sense based on an expected return outcome. From a purely financial perspective, the logical answer is that if you have money to invest, you should always invest it whenever it’s available.Another paper by John Knight and Lewis Mandell compared DCA to a buy-and-hold strategy. Then, it analyzed the strategies across a series of investor profiles from risk-averse to aggressive. They concluded that DCA had no advantage over the two alternative investment strategies. Combined with their graphical analysis, their numerical trial and empirical evidence favored optimal rebalancing and buy-and-hold strategy over dollar cost averaging. Optimal rebalancing refers to the strategy of adjusting the proportions of assets in a portfolio to maintain a desired level of risk and return.Dollar cost averaging versus lump sum investingKnight and Mandell conducted a backtest to compare the performance of DCA versus LSI (lump sum investing). Backtesting is a simulation technique to evaluate the performance of a trading strategy using historical data. They backtested the two strategies between 1926 and 2010. Transaction costs were ignored (favoring DCA, which involves more trading). The authors assumed the initial portfolio was $1 million in cash, and the only investment available was the S&P 500 Index:DCA Strategy: At the beginning of each month, one-twelfth of the initial portfolio was invested—the entire $1 million was invested by the end of the 12th month.LSI Strategy: The $1 million portfolio was invested on day one.The study covered 781 rolling 20-year periods. The LSI strategy outperformed in 552 of them—over 70 percent of the time. In addition, in the roughly 30 percent of instances in which DCA outperformed, the magnitude of that outperformance was less than when LSI outperformed.Specifically, during the 552 20-year periods in which LSI did better than DCA, the average cumulative outperformance was $940,301 on the initial $1 million investment. During the 229 periods in which DCA did better than LSI, the average cumulative outperformance was $769,311.When dollar cost averaging is the better optionLarry notes that there is an argument to be made in favor of DCA when it is the lesser of two evils—when an investor cannot “take the plunge” because they are sure that if they were to invest all at one time, that day would turn out to be the high not exceeded until the next millennium. That fear causes paralysis.If the market rises after they delay, how can they buy now at even higher prices? And if the market falls, how can they buy now because the bear market they feared has arrived? Once a decision has been made not to buy, how do you decide to buy?There is a solution to this dilemma that addresses both the logical and the emotional issues. Larry advises an investor to write a business plan for their lump sum. The plan should lay out a schedule with regularly planned investments. The plan might look like one of these alternatives:Invest one-third of the investment immediately and invest the remainder one-third at a time during the next two months or the next two quarters.Invest one-quarter today and spread the remainder equally over the next three quarters.Invest one-sixth each month for six months or every other month.Adopt a glass is half-full perspectiveHaving accomplished these objectives, Larry says, the investor should adopt a “glass is half full” perspective. If the market rises after the initial investment, they can feel good about how their portfolio has performed. She can also feel good about how smart she was not to delay investing.If, on the other hand, the market has fallen, the investor can feel good about the opportunity they now have to buy at lower prices and about being smart enough not to have put all of their money in at one time. Either way, the investor wins from a psychological perspective. This is an important consideration because emotions play an essential role in how individuals view outcomes.Lump sum investing is the way to goWhile DCA may sometimes work, Larry insists that putting all your money at once gives you the best odds of having the most money. If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, he says, you should put all your money in whenever you have it to invest. Unfortunately, despite all the evidence, investors and advisors still recommend DCA.Further readingGeorge Constantinides, “A Note On The SubOptimality Of Dollar Cost Averaging as an Investment Policy,” The Journal of Financial and Quantitative Analysis, June 1979.John Ross Knight and Lewis Mandell, “Nobody Gains From Dollar Cost Averaging: Analytical, Numerical and Empirical Results,” Financial Services Review, Volume 2, Issue 1 (1992-1993) pp. 1-71.Gerstein Fisher, “Does Dollar Cost Averaging Make Sense For Investors?” 2011.Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to OutperformEnrich Your Future 01: The Determinants of the Risk and Return of Stocks and BondsEnrich Your Future 02: How Markets Set PricesEnrich Your Future 03: Persistence of Performance: Athletes Versus Investment ManagersEnrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?Enrich Your Future 05: Great Companies Do Not Make High-Return InvestmentsEnrich Your Future 06: Market Efficiency and the Case of Pete RoseEnrich Your Future 07: The Value of Security AnalysisEnrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market ReturnEnrich Your Future 09: The Fed Model and the Money IllusionPart II: Strategic Portfolio DecisionsEnrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’tEnrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of SkillEnrich Your Future 12: When Confronted With a Loser’s Game Do Not PlayEnrich Your Future 13: Past Performance Is Not a Predictor of Future PerformanceEnrich Your Future 14: Stocks Are Risky No Matter How Long the HorizonEnrich Your Future 15: Individual Stocks Are Riskier Than You BelieveEnrich Your Future 16: The Estimated Return Is Not InevitableEnrich Your Future 17: Take a Portfolio Approach to Your InvestmentsEnrich Your Future 18: Build a Portfolio That Can Withstand the Black SwansEnrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be SafeEnrich Your Future 20: Passive Investing Is the Key to Prudent Wealth ManagementPart III: Behavioral Finance: We Have Met the Enemy and He Is UsEnrich Your Future 21: Think You Can Beat the Market? Think AgainEnrich Your Future 22: Some Risks Are Not Worth TakingEnrich Your Future 23: Seeing Through the Frame: Making Better Investment DecisionsEnrich Your Future 24: Why Smart People Do Dumb ThingsEnrich Your Future 25: Stock Crashes Happen—Be PreparedAbout Larry SwedroeLarry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInXWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast

BIO: Elvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.STORY: Elvi decided to be her own boss and started an e-commerce business for which she had no knowledge or passion. It turned out to be a nightmare that cost her $30,000.LEARNING: If you don’t have passion for something, don’t do it. Happiness and delivering value should be the ultimate goal, not just making money. “Yes, you want to start a business. But first, sit back and ask yourself, “Will I enjoy this? Is this going to tell the story that I want to live in the world?”Elvi Caperonis Guest profileElvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.With a track record of helping job seekers land their dream jobs and supporting millions across the globe through her content on Linkedin, Elvi Caperonis has become the go-to expert for those looking to build a personal brand and land their dream job.The ability to connect with her audience through storytelling and content strategies has made an impact and helped build her brand. Elvi is passionate about helping and inspiring others to achieve results similar to hers.Land Your Dream Job and Succeed 10X Faster!: Access the same strategies that transformed my career Growth by landing jobs at top companies like Harvard University and Amazon—all for a fraction of the price.Worst investment everA few years ago, Elvi decided she wanted to be an entrepreneur and her own boss. She discussed it with her husband, who was very supportive. Elvi chose to launch an E-commerce business. She had heard many people say it was a fun and profitable business and believed she could do it.Elvi took an online course and started learning about E-commerce and how to do it step by step. She did her due diligence. Unfortunately, Elvi didn’t have a passion for E-commerce. It was a lot of work, and it was a nightmare at the end because she was putting in a lot of hours and didn’t turn a profit. She lost about $30,000 in that business.Lessons learnedIf you don’t have passion for something, question yourself 1,000 times before starting that business. Passion allows you to tell a story that resonates with your customers.Learn from people who have done it before and get a mentor.If you don’t have experience in the kind of business you want to start, don’t go all in; be agile and try to sell a few units of your product, then double down as you continue to grow and adapt.Happiness and delivering value should be the ultimate goal, not just making money.Andrew’s takeawaysWhatever job or business you start, ensure it’s built around the core thing you do naturally today.No.1 goal for the next 12 monthsElvi’s number one goal for the next 12 months is to spend more time with her kids, husband, mom, sisters, aunts, and whole family.Parting words “Even if you cannot see it now, whatever you are going through will be okay. Just keep reminding yourself of this.”Elvi Caperonis [spp-transcript] Connect with Elvi CaperonisLinkedInWebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsXYouTubeMy Worst Investment Ever Podcast