I know that you don’t like managed futures because it’s a strategy mainly based on behavioral explanations. However, there are some investment firms (Standpoint or Mount Lucas), that try to give a risk based explanation about why managed futures work. They basically say that while stocks and bonds are part of capital formation markets and derivatives are, on the other hand, risk transfer markets. When you enter a futures contract there are two parties. One that’s trying to hedge a risk and another that’s taking that risk. Think about currency hedged funds that trade in derivatives to avoid taking currency risk. They say that futures are valuable for planning (specially when the markets are volatile) and that managed futures strategies get compensated to take that risk away from hedgers. What are your thoughts on those kinds of ideas?
I listen to every episode and I am a student studying finance. leveraged investing is very interesting to me. I think it would be a better risk trade off to work a stable job and 2x lever a total stockmarket fund than pursue entrepreneurship or a volatile sales role. Would love to listen to an in depth episode on leverage.
If you've seen some other episodes, you would know that if you're very young, investing over 100% might be optimal. However, it might be not good from psychological point of view. The model assumes that even if you bankrupt in few years, you would continue investing in 2x leverage, and overall you would end up better than just investing 100%. I suggest to stick to 100% equity if you have high risk tolerance, or 80/20 or 60/40 if you have lower risk tolerance. Keep in mind even with 100% equity you can easily have 50% drawdowns. Read the case study of Rick Guerin, a friend of warren Buffett.
@@rationalreminder thanks! My question for submission is this; 'I am new to finance so maybe I don't understand what's going on, but to me it seems like your organization is staunchly adhering to the Fama and French Factor models as your core strategy. After Andrew Chen's episode, did PWL look at his findings closer? Are you considering rethinking how PWL invests as a result or have arguments to refute these findings? If he's correct wouldn't it mean significant changes are needed? It was also mentioned briefly in this episode.'
A giant in the personal finance community--and on planes. Thank you Ben for your service to humanity! (And, shame on airlines for de-humanizing all of us--even a hobbit like me. 🙂)
target date fund that effectively holds total world for simplicity total world for maximum diversification spy500 if its the only/cheapest option and understand potential downsides of limiting diversification or any of these + small cap value tilt Not a big fan of reits
Over the past 4 decades I've had lots of bad advice, from a lot of 'advisors'. I consider myself fortunate, as I now trust no one. Vanguard S&P 500 index fund with very low fee works for a lot of people, and as Buffett showed, it outperforms just about all 'advisors'. It's well understood that fees transfer much of your wealth to strangers. Kind of like a tax on stupid people, or the lottery. What is PWL's performance against Vanguard over the past 10 years?
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I know that you don’t like managed futures because it’s a strategy mainly based on behavioral explanations. However, there are some investment firms (Standpoint or Mount Lucas), that try to give a risk based explanation about why managed futures work. They basically say that while stocks and bonds are part of capital formation markets and derivatives are, on the other hand, risk transfer markets. When you enter a futures contract there are two parties. One that’s trying to hedge a risk and another that’s taking that risk. Think about currency hedged funds that trade in derivatives to avoid taking currency risk. They say that futures are valuable for planning (specially when the markets are volatile) and that managed futures strategies get compensated to take that risk away from hedgers. What are your thoughts on those kinds of ideas?
I listen to every episode and I am a student studying finance. leveraged investing is very interesting to me. I think it would be a better risk trade off to work a stable job and 2x lever a total stockmarket fund than pursue entrepreneurship or a volatile sales role. Would love to listen to an in depth episode on leverage.
If you've seen some other episodes, you would know that if you're very young, investing over 100% might be optimal. However, it might be not good from psychological point of view. The model assumes that even if you bankrupt in few years, you would continue investing in 2x leverage, and overall you would end up better than just investing 100%.
I suggest to stick to 100% equity if you have high risk tolerance, or 80/20 or 60/40 if you have lower risk tolerance. Keep in mind even with 100% equity you can easily have 50% drawdowns.
Read the case study of Rick Guerin, a friend of warren Buffett.
@@88Nieznany88 Would you be interested in seeing this topic discussed more in depth? I think a lot of good points can be made from both sides.
How do people submit questions for the question episdoes?
Right here right now. Or in the community. Or email.
-Ben
@@rationalreminder thanks!
My question for submission is this;
'I am new to finance so maybe I don't understand what's going on, but to me it seems like your organization is staunchly adhering to the Fama and French Factor models as your core strategy. After Andrew Chen's episode, did PWL look at his findings closer? Are you considering rethinking how PWL invests as a result or have arguments to refute these findings? If he's correct wouldn't it mean significant changes are needed? It was also mentioned briefly in this episode.'
Feels cheating listening to a new release while I'm only up to episode 80 chronologically
People actually do this?
A giant in the personal finance community--and on planes. Thank you Ben for your service to humanity! (And, shame on airlines for de-humanizing all of us--even a hobbit like me. 🙂)
Been listening to 100+ podcasts and i had no idea Ben was so tall.
I came for the afterparty!😂
What do you think about investing in ZAG right now ? the price has been coming down a lot. what do you think about bond etf investing?
30:18 could someone clarify, what does he mean by that Statement?
Epic!
Whats the #1 investment you would recommend for a USA retail investor? S&P 500? Small cap value? Total market? Total world? REITs? None of the above?
target date fund that effectively holds total world for simplicity
total world for maximum diversification
spy500 if its the only/cheapest option and understand potential downsides of limiting diversification
or any of these + small cap value tilt
Not a big fan of reits
Avantis and Dimensional both have global all-in-one ETFs. AVGE for mild value tilt and AVGV for strong value tilt from Avantis.
Total world is the top answer.
Target date for confidence and simplicity if you have "paper hands".
100% in 3x leveraged nasdaq. Tech to the moon. It takes BALLS to make money. When you’ve made money then diversify.
Over the past 4 decades I've had lots of bad advice, from a lot of 'advisors'. I consider myself fortunate, as I now trust no one. Vanguard S&P 500 index fund with very low fee works for a lot of people, and as Buffett showed, it outperforms just about all 'advisors'. It's well understood that fees transfer much of your wealth to strangers. Kind of like a tax on stupid people, or the lottery. What is PWL's performance against Vanguard over the past 10 years?