Podcast appearances and mentions of roger ibbotson

This episode of the Power of Zero show explores whether you should be taking more risks in your Roth accounts than in your other investments. Host David McKnight kicks things off by stating that if you have Roth IRAs or Roth 401(k)s in your portfolio, you should be allocating 100% of these dollars to a stock allocation. That's because these are your most tax-efficient investments and they'll remain tax-free right up until your death – and even 10 years beyond. Remember: you want the biggest returns in your portfolio to take place in a tax-free environment. David explains which of your assets you should be allocating towards bonds. David isn't a huge fan of bonds because of three words: fixed index annuities. He uses a study by the University of Chicago's Dr. Roger Ibbotson to illustrate his preference for fixed index annuities over bonds. Ibbotson's research showed that the stock FIA portfolio did not just increase, but it did so with less risk, while also protecting the investor to some extent from irrational investment behavior that erodes returns over time. David is all in favor of allocating your Roth IRAs to your most aggressive investments, as he thinks you should want your tax-free accounts to house your most explosive investments. While conventional wisdom advises people to allocate the rest of their assets to bonds, David believes in a better alternative: incorporating a fixed index annuity into your overall strategy. By doing so you'll increase your return, lower your risk, lower the standard deviation of your entire portfolio, and give yourself a better outcome over time. David concludes by pointing out that you don't have to love annuities for this strategy to work – you just have to love the idea of increasing the likelihood that your money will last as long as you do.     Mentioned in this episode: David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com University of Chicago Dr. Roger Ibbotson

Our guest on the podcast today is David Booth. He's the Chairman of Dimensional Fund Advisors, a firm he founded in 1981. David led Dimensional as CEO and later Co-CEO until 2017, when he stepped back from the daily management of the firm. David helped create one of the world's first index funds in the 1970s and launched the first passively managed small-company strategy in the early 1980s. He received a bachelor's degree in economics in 1968 and a master's degree in business in 1969 from the University of Kansas. In 1971, he received an MBA from the University of Chicago. Over the years, David has been a benefactor to both schools, and the University of Chicago Booth School of Business is named in David's honor. David, welcome to The Long View.BackgroundBioTune Out the NoiseDFA US Small CapDFA US Micro CapPapers Mentioned“Stocks, Bonds, Bills and Inflation: Year-by-Year Historical Returns (1926-1974),” by Roger Ibbotson and Rex Siquefield, The Journal of Business, January 1976.“The Cross-Section of Expected Stock Returns,” by Eugene Fama and Kenneth French, jstor.org, June 1992.“Why Investors Missed Out on 15% of Total Fund Returns,” by Jeffrey Ptak, Morningstar.com, Aug. 15, 2024.OtherErrol MorrisMerton MillerEugene FamaMac McQuownRex SinquefieldRobert MertonDan WheelerDaniel Kahneman“Everything You Need to Know About ‘MADOFF: The Monster of Wall Street,'” by Ingrid Ostby, netflix.com, Jan. 4, 2023.“DFA vs. Vanguard,” The Rational Reminder podcast, Episode 351, youtube.com.“PHOTOS: A Look Inside the Booth Estate,” Austin American-Statesman, Feb. 13, 2020.

Our guests this week are Tom Idzorek and Paul Kaplan. This is Tom's second appearance as a guest and Paul's first. Tom is chief investment officer of retirement for Morningstar Investment Management. He also serves as a member of Morningstar's 401(k) Committee, Public Policy Council, Global Investment Committee, US Investment Policy Committee, and the Editorial Board of Morningstar Magazine. Before retiring in 2023, Paul was director of research for Morningstar Canada and a senior member of Morningstar's Global Research Team. He led the development of many of the quantitative methodologies behind Morningstar's fund analysis, indexes, advisor tools, and other services. Tom and Paul are accomplished researchers and authors, having individually published or collaborated on numerous academic papers, accepted to prestigious peer-reviewed journals, and their work has received numerous awards through the years. In today's interview, we're focusing on one of their recent collaborations, their new book, Lifetime Financial Advice: A Personalized Optimal Multilevel Approach.BackgroundTom Idzorek Bio“Tom Idzorek: Exploring the Role of Human and Financial Capital in Retirement Planning,” The Long View podcast, Morningstar.com, June 7, 2022.Paul Kaplan BioLifetime Financial Advice: A Personalized Optimal Multilevel Approach, by Tom Idzorek and Paul KaplanLifetime Financial Advice“Joining Lifecycle Models With Mean-Variance Optimization,” by Tom Idzorek and Paul Kaplan, papers.ssrn.com, Oct. 19, 2023.Lifetime Financial Advice Book Club Series“Personalized Multiple Account Portfolio Optimization,” by Tom Idzorek, Financial Analysts Journal, June 29, 2023.“The Popularity Asset Pricing Model,” by Tom Idzorek, Paul Kaplan, and Roger Ibbotson, papers.ssrn.com, Oct. 26, 2021.“Popularity: A Bridge Between Classical and Behavioral Finance,” by Roger Ibbotson, Tom Idzorek, Paul Kaplan, and James Xiong, Research Foundation, Dec. 10, 2018.“ESG Investing and the Popularity Asset Pricing Model (PAPM),” by Tom Idzorek, blogs.cfainstitute.org, Feb. 1, 2024.OtherMilton FriedmanFranco ModiglianiPaul SamuelsonRobert MertonRichard ThalerDaniel KahnemanRoger IbbotsonJames Xiong“Modern Portfolio Theory: What MPT Is and How Investors Use It,” by the Investopedia team, Investopedia.com, Aug. 29, 2023.

Damon had the opportunity to sit with Dr. Roger Ibbotson, professor of finance at Yale University. They discussed the current market, trends and who he turns to for advice. Plus, speaking of education, why we should be terrified of the next generation of leaders.  For more information or to schedule a consultaion call 480-680-6868 or visit www.successinthenewretirement.com 

Sam went to Yale to speak with economic professors Dr. Roger Ibbotson and William Goetzman about where to place your retirement money.

You've likely used the stock market to grow your retirement savings, but what happens after retirement? Roger Ibbotson, Emeritus finance professor at Yale University, advises that you should reduce risk during your early retirement years. Traditional bonds, once a go-to option, now face uncertainties due to fluctuating interest rates. So, what's the solution? Annuities. Discover how annuities are emerging as a safer and more attractive alternative to bonds in your portfolio. Steve and Derrick, discuss the pressing need to analyze your bond investments, given the rising interest rates. Protecting your retirement nest egg is paramount, and annuities offer a compelling way to do just that. Today, annuities can be tailored to suit your unique financial goals, whether it's growth or income. These are not your grandfather's annuities; they're a modern solution for today's retirees. #retirement #financialplanner #financialliteracy #wealth #fyp #podcast   PROTECT YOUR RETIREMENT SAVINGS: CLICK HERE TO BOOK YOUR ANNUITY CHALLENGE MEETING TODAY!     Listen to the “Retire Texas Style” podcast anytime on Apple or Spotify !

Matt Deaton spent a few moments with Yale University Professor of Finance Dr. Roger Ibbotson and Director of the Yale Executive MBA program William Goetzmann. They discuss the opportunities within a 60/40 portfolio, decreasing Social Security and how to prepare for upcoming tax changes.  For more information on Acute Wealth Advisors or to schedule a consultation, call 480-680-6868 or visit www.successinthenewretirement.com   

Luke McCarty had the opportunity to visit Yale University to meet with Dr. Roger Ibbotson, Professor of Finance and Dr. William Goetzmann, Professor of Finance and Management Studies. They discuss the market volatility, the first steps towards financial independence and more.  For more information on the McPherson Financial Group or to schedule a consultation call 321-425-8550 or visit www.artofmoneyradio.com  

Join Abe Ashton as he sits down with Yale Professors Roger Ibbotson and William Goetzmann on all things related to our economy. Plus, get their thoughts on how it will affect your retirement in the future.  To get more information on Ashton & Associates, or to schedule a consultation call visit AshtonWealth.com  See omnystudio.com/listener for privacy information.

Charisse Rivers of Zinnia Wealth Management has a discussion with Dr. Roger Ibbotson and Dr. William Goetzmann from the Yale School of Management on what is working and not working for retirees and pre-retirees in this high inflationary economy.    Dr. Robert Ibbotson is the Professor in the Practice Emeritus of Finance at Yale School of Management and chairman of Zebra Capital Management, LLC. Dr. William Goetzmann is the Edwin J. Beinecke Professor of Finance and Management Studies as well as the Faculty Director of the International Center for Finance at Yale School of Management.

Does the 60/40 Split Still Work in Investing? Bonds Portion Needs Help BRT S03 EP47 (146) 9-23-2022 – Wealth for Life   Things We Learned This Week What is the 60/40 Split in Investing? Equities 60% for Growth/ Bonds 40% for Income Bonds Returns have been going down for 2 decades, hurting Retirements Sequence of Returns Risk – When you retire matters, if the Market is down, your income can take a big hit Annuities - Bonds Replacement for Income, w/ Inflation increases & Income for Life   Co-Host: Denver Nowicz, President - Wealth For Life https://wealthforlife.net/brt/ https://twitter.com/denvernowicz  Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not ‘All or Nothing'.     Notes:  Typical investment split is 60/40. This is a growth bucket of 60% equities / stocks, and an income bucket of 40% bonds. The expectation is that the bond bucket is less volatile so you can pull income. Unsure if 60/40 ever worked as well as people thought. If you look at the bond history and the returns, they have been going down since 2000. This coincides with lowered interest rates. Sequence of Returns Risk: "Sequence" refers to the fact that the order and timing of poor investment returns can have a big impact on how long your retirement savings last. Options to replace the bond portion would be annuities, that have inflation protection. The 60/40 split could vary depending on your age, so a 30 year old might have an 80/20 split, while a 60 year old might be 50/50. It's important to have defensive strategy, like annuities and other strategies for income. You have to be careful with sequence of returns risk. This is the risk of the market being down when you retire. For example the S&P from 2000 to 2010 had a near 0% return. Because of lowered interest rates, bond returns have not kept up with inflation. In the current market, when stocks go down, bonds follow. It is not rational or how it's supposed to be, but it is what is happening. Financial advice has been dominated by stocks, but that is not the only way to invest. You can use alternative strategies like rental real estate or insurance products. You're told to just invest in the market but some of these products have market risk and potentially fee issues. Not all annuities are the same. We would not recommend variable annuities, as they have high fees and market risk. You might as well just invest directly in the market. You still want a growth bucket so in the split could be 60/20/20 – Equities / Bonds / Annuities. Better products like fixed indexed annuities may have caps on the upside, but they also have principal protection which protects the downside. No matter what advertising you see on annuities, they are designed to yield 3 to 5% with guarantees. Annuities are longevity insurance, so you do not outlive your money. And the longer you live, yields go higher, like 7% and more. If you lived here 85+, some annuities with inflation protection for income go up as inflation goes up. This is a game changer in the income area and relieves pressure on your a stock growth account. The analogy would be an escalator going up. People can roll over an IRA in their 50s to an annuity (with 20% of your capital to an annuity) with a 5 to 10 year runway to build up the annuity income. Again you have to pick the right annuities, some are average. Many annuities will just market the growth phase with a bonus received for purchasing that annuity. You really want protection in the income phase. The safe structure 60/20/20 split with that inflation protection during the income payout phase. There are recent studies that show annuities beat out bonds over the long term. Annuities have fees of 0 to 1 1/4%. You want to have some fees in the fixed indexed annuity for the growth potential. Good to avoid the no fee annuities, as they may have lower rates and less protections. The downside of annuities is they do have surrender charges that last 7 to 10 years, which is common, but you can take out 10% a year. The goal is to map out the income needed in your overall financial plan. Understand that for a married couple, annuities are a good option because the odds are one person is going to live to 85 or older. Annuity company guarantees to give income for life. They act as Longevity insurance, that you will not run out of money.  Not uncommon by age 75 with a 401(k) to run out of money, or have to take less per year. Then you can use Social Security plus an annuity bucket to cover income for expenses.     More Annuity Info:   https://www.kitces.com/blog/calculating-longevity-insurance-rates-a-longevity-annuity-comparison-to-stock-and-bond-returns/ What Is Longevity Insurance And How Does It Manage The Retirement Time Horizon Problem     https://www.wealthmanagement.com/insurance/ibbotson-fixed-indexed-annuities-beat-out-bonds WEALTH PLANNING>INSURANCE Ibbotson: Fixed Indexed Annuities Beat Out Bonds   In his latest research, economist Roger Ibbotson argues that fixed indexed annuities have the potential to outperform bonds in the near future and smooth the return pattern of a portfolio. Diana Britton | Mar 07, 2018       https://www.kiplinger.com/article/retirement/t003-c032-s014-better-than-bonds-a-look-at-fixed-index-annuities.html   ANNUITIES Better Than Bonds? A Look at Uncapped Fixed Index Annuities For safety and performance, it could be time to consider including them in your retirement portfolio to diversify your asset allocation. by: David Braun, Investment Adviser Representative June 14, 2018   Annuities vs. Bonds: New Research In March, economist Roger Ibbotson, a 10-time recipient of the Graham and Dodd Award for financial research excellence and professor emeritus at the Yale School of Management, unveiled new research analyzing the emerging potential of fixed index annuities as a bond alternative in retirement portfolios. Working with Annexus, a leading designer of indexed annuities and indexed universal life insurance, Ibbotson and his research team used S&P 500 dynamic participation rates to simulate fixed index annuity performance over the past 90 years.   https://www.plansponsor.com/using-annuities-alternative-bonds-secure-retirement-outcomes/ INVESTING  October 29, 2021 Using Annuities as an Alternative to Bonds to Secure Retirement Outcomes In a low interest rate environment, annuities provide an option that reduces longevity and sequence-of-return risks. Reported by  REBECCA MOORE     https://www.forbes.com/advisor/investing/stock-and-bond-returns/ The Historical Performance Of Stocks And Bonds Taylor Tepper     More Info on WFL and Tax Free Matching: HERE     Wealth For Life Topic: https://brt-show.libsyn.com/category/Wealth+For+Life   Link to Taxes Show on 10/31/2021 w/ Denver: Here Link to Offense / Defense Show on 6/6/2021 w/ Denver: Here Link to Shows, Denver was a Guest: Here   Investing Topic: https://brt-show.libsyn.com/category/investing More - BRT Best of: https://brt-show.libsyn.com/category/Best+Of     Thanks for Listening. Please Subscribe to the BRT Podcast.      Business Roundtable with Matt Battaglia The show where Entrepreneurs, High Level Executives, Business Owners, and Investors come to share insight and ideas about the future of business. BRT 2.0 looks at the new trends in business, and how classic industries are evolving.  Common Topics Discussed: Business, Entrepreneurship, Investing, Stocks, Cannabis, Tech, Blockchain / Crypto, Real Estate, Legal, Sales, Charity, and more…  BRT Podcast Home Page: https://brt-show.libsyn.com/ ‘Best Of' BRT Podcast: Click Here BRT Podcast on Google: Click Here BRT Podcast on Spotify: Click Here                    More Info: https://www.economicknight.com/podcast-brt-home/ KFNX Info: https://1100kfnx.com/weekend-featured-shows/   Disclaimer: The views and opinions expressed in this program are those of the Hosts, Guests and Speakers, and do not necessarily reflect the views or positions of any entities they represent (or affiliates, members, managers, employees or partners), or any Station, Podcast Platform, Website or Social Media that this show may air on. All information provided is for educational and entertainment purposes. Nothing said on this program should be considered advice or recommendations in: business, legal, real estate, crypto, tax accounting, investment, etc. Always seek the advice of a professional in all business ventures, including but not limited to: investments, tax, loans, legal, accounting, real estate, crypto, contracts, sales, marketing, other business arrangements, etc.

With life expectancies on the rise, retirement can now span decades. How can you make sure your money lasts? In today's episode of Carson Group and PIMCO's Retirement Income Series, Dr. Roger Ibbotson, Professor in the Practice Emeritus of Finance at Yale School of Management and Chairman of Zebra Capital Management, an equity investment and hedge fund manager, offers his insights on how to tackle the question that's keeping advisors and clients up at night. You can find show notes and other information at CarsonGroup.com/Framework. Carson Group is committed to advancing financial literacy. Our coaches work with thousands of FPA members. Schedule a consultation to learn how Carson can help you help your clients and grow your business.Investment products contain risk and may lose value. There is no guarantee that an investment product will be successful in achieving its objectives. Investors should consult their investment professional prior to making an investment decision.This podcast is brought to you by Carson Group and PIMCO, who are unaffiliated entities. This material contains the opinions of the speakers and not necessarily of Carson Group or PIMCO and such opinions are subject to change without notice. This podcast may include discussions of investment strategies. These discussions are for illustrative purposes only and may not be appropriate for all investors. The discussions are not based on any particularized financial situation, or need, and are not intended to be, and should not be construed as, a forecast, research, investment advice or a recommendation for any specific PIMCO or other strategy, product or service. Individuals should consult with their own financial advisors to determine the most appropriate allocations for their financial situation, including their investment objectives, time frame, risk tolerance, savings and other investments. Pimco does not provide legal or tax advice.  Further, this seminar is not intended to provide specific legal, tax, or other professional advice in this podcast. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness.  Any tax statements contained herein are not intended or written to be used, and cannot be relied upon or used for the purpose of avoiding penalties imposed by the Internal Revenue Service or state and local tax authorities. Individuals should consult their own legal and tax counsel as to matters discussed herein and before entering into any estate planning, trust, investment, retirement, or insurance arrangement.           

Roger Ibbotson, financial researcher and co-author of one the standard references for capital market returns, now claims that annuities could beat out bonds going forward. Today, Paul and Jim pump the breaks and explain why the kinds of bonds and annuities being compared make these claims misleading and dangerous for investors. Paul provides some of his own research to fill in the gaps. Later in the episode, Jim talks about how much money is flowing into ESG and what people are doing to get a piece of it.  To get a copy of our new book, Confident Financial Planning, go to paulwinkler.com/book.  

Our guest this week is Larry Siegel. He is the Gary P. Brinson director of research at the CFA Institute Research Foundation. Prior to that, he was director of research for the Ford Foundation's investment division for 15 years. Siegel began his career at Ibbotson Associates in 1979. He specializes in asset management and investment consulting and has served on various boards as both an advisor and a director. He has also served on the editorial board of the Financial Analysts Journal and currently serves on the editorial board of The Journal of Portfolio Management and TheJournal of Investing. Siegel is a prolific writer and has authored several critically acclaimed books in recent years, including Unknown Knowns: On Economics, Investing, Progress, and Folly as well as Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance. He earned his Bachelor of Arts from the University of Chicago and his MBA in finance at the University of Chicago Booth School of Business.BackgroundBioUnknown Knowns: On Economics, Investing, Progress, and Folly, by Laurence SiegelFewer, Richer, Greener: Prospects for Humanity in an Age of Abundance, by Laurence SiegelResearch"Lifetime Financial Advice: Human Capital, Asset Allocation, and Insurance," by Roger Ibbotson, Moshe Arye Milevsky, and Kevin Zhu, ResearchGate, January 2007.Popularity: A Bridge Between Classical and Behavioral Finance, by Roger Ibbotson, Thomas Idzorek, Paul Kaplan, and James Xiong, Jan. 15, 2019."Bursting the Bubble—Rationality in a Seemingly Irrational Market," by David F. DeRosa, SSRN, April 29, 2021."Equity Risk Premium Forum: Don't Bet Against a Bubble?," by Paul McCaffrey, CFA Institute, April 8, 2022.The Myth of Artificial Intelligence: Why Computers Can't Think the Way We Do, by Erik Larson, April 6, 2021."Value Investing: Robots Versus People," by Laurence Siegel, larrysiegel.org, June 30, 2017.Endowments and Investing Lessons"Don't Give Up the Ship: The Future of the Endowment Model," by Laurence Siegel, larrysiegel.org, April 7, 2021."Where's Tobin? Protecting Intergenerational Equity for Endowments: A New Benchmarking Approach," by M. Barton Waring and Laurence Siegel, larrysiegel.org, April 21, 2022."Debunking Nine and a Half Myths of Investing," by Laurence Siegel, larrysiegel.org, March 12, 2020.Inflation"Protecting Portfolios Against Inflation," by Eugene Podkaminer, Wylie Tollette, and Laurence Siegel, The Journal of Investing, April 2022."The Novelty of the Coronavirus: What It Means for Markets," by Laurence Siegel, larrysiegel.com, April 1, 2020."Will Demographic Trends Drive Higher Inflation and Interest Rates?" by Laurence Siegel, larrysiegel.com, Feb. 10, 2021.Other"Cliff Asness: Value Stocks Still Look Like a Bargain," The Long View podcast, Morningstar.com, May 31, 2022."Tom Idzorek: Exploring the Role of Human and Financial Capital in Retirement Planning," The Long View podcast, Morningstar.com, June 7, 2022.TranscriptJeff Ptak: Hi, and welcome to The Long View. I'm Jeff Ptak, chief ratings officer for Morningstar Research Services.Christine Benz: And I'm Christine Benz, director of personal finance and retirement planning for Morningstar.Ptak: Our guest this week is Larry Siegel. Larry is the Gary P. Brinson director of research at the CFA Institute Research Foundation. Prior to that, he was director of research at the Ford Foundation's investment division for 15 years. Larry began his career at Ibbotson Associates in 1979. He specializes in asset management and investment consulting and has served on various boards as both an advisor and a director. He has also served on the editorial board of the Financial Analysts Journal and currently serves on the editorial board of The Journal of Portfolio Management and The Journal of Investing. Larry is a prolific writer and has authored several critically acclaimed books in recent years, including Unknown Knowns: On Economics, Investing, Progress, and Folly as well as Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance. Larry earned his Bachelor of Arts from the University of Chicago and his MBA in finance at the University of Chicago, Booth School of Business.Larry, welcome to The Long View.Laurence Siegel: Thank you.Ptak: Thank you so much for joining us. We're really excited to chat with you. I wanted to start with your early career. You worked for Roger Ibbotson early in your career. In fact, you were Ibbotson's first employee if I'm not mistaken. Talk about Roger's influence on you and more broadly, the impact he has had on our understanding of markets and investing.Siegel: Roger was not only my first boss, he was my first finance professor at the University of Chicago. So, I got fed the Ibbotson—and to give credit where it's due, to Sinquefield—view of the markets early. I was 21 years old. And I would describe that view as that asset classes are what's important; that security, individual securities, are best viewed as components of asset classes, although when you get involved in the business, you realize that you have to understand the market at the security level, too; and that long-term performance is very strongly in favor of equities. So, at the time, pension funds, who were the main customers for Ibbotson Associates' work, had relatively little in equities, and one of our missions was to improve the returns of those funds and thus for the sponsors and the employees by holding more equities. This was in the early ‘80s. I was hired in 1979. So, you can see that was a good strategy.Benz: So, sticking with your background in your early career, you think young professionals should have a grounding in the humanities and liberal arts. Why is that?Siegel: Well, not every single one needs to, but the ones who are going to rise to the top in the business need a grounding in the common cultural heritage of the human race, and that's given by humanities and social sciences that the liberal arts broadly construed. Investors invest in businesses or governments, but mostly businesses, and businesses exist to serve the needs and wants of people, an ever-changing group of people around the world. So, without a deep understanding of human affairs—in other words, of the why of business—young investment professionals are likely to fall into some intellectual traps: short-termism, geographically narrow thinking, where you only think about your own country, and a bunch of other well-documented behavioral biases—you shouldn't do that.Ptak: Maybe a dumb question to follow up on that: Why doesn't the market do a better job of creating incentives to ensure that younger professionals—let's talk about those who are heading into finance and in investing in particular—that they have a liberal arts background and they're able to better avoid some of those traps? Why haven't those incentives really taken shape and why is it still so typical to see this procession of MBAs and people with the traditional finance background dominating finance and investing?Siegel: Well, if you're as old as me, I'm 68, you have observed that it used to. The market, when I was getting out of school, was in a very different position. There weren't many MBAs. It was an unpopular decision to go to business school. And most of the people who were accepted in business school had an Ivy Plus background where a liberal arts education is required in order to graduate. By Ivy Plus I mean the University of Chicago, Stanford, Northwestern, places like that, plus the Ivy League. So, this staffed the investment business with a fairly broadly educated group of people. What happened in the next 40 years is that business got too big. And the MBA programs mushroomed from a little specialty of a dozen or two dozen schools to something that everybody felt they had to get in order to get a job. So, it just became more of a trade school degree rather than an academic degree. And I'm sorry if I'm offending anybody here, but that's the way I see it. And the investment business became more of a trade. So, the market became less efficient, I think, because it just got so big that it had to pull in a lot of different people, including people who had specialized early because they wanted to be in finance because they were seeing people in finance made a lot of money.Benz: Speaking of specialization, do you think that the only way to truly specialize is to have had a generalist humanistic education first? In other words, are the most successful specialists people who trained as generalists first and is there any evidence for this?Siegel: I think there is among CEOs and maybe CIOs, chief investment officers. The greatest businesspeople in the world have generally had a pretty broad background and a lot of them started, the legend is in the mail room, but they may have started in engineering, accounting. They may have started in sales. Whatever they did, they found their way to the investment business through a kind of evolution over time. An organization needs foxes and hedgehogs. Isaiah Berlin, drawing on an ancient Greek story, said that there are two kinds of people of foxes who know a little about everything and hedgehogs who no one big thing. Einstein, for example, was a hedgehog. He really only cared about physics, and he was very productive. We would have a very different world without him. I am suggesting that you're better off looking for foxes, but you also want to have a few Einsteins in there, and an organization that consists entirely of foxes would be very unfocused and would be more like a college dorm than a business.Ptak: Wanted to shift and talk about something that seems like it's been an awfully short supply lately, which is optimism. You wrote a book called Fewer, Richer, Greener, evincing optimism about the global economy and humanity in general. Have you always been an optimistic person? Or has it gone back and forth or been situation dependent?Siegel: I've always been an optimistic person in terms of my intrinsic biases. I do know enough economic history and regular history to know that living conditions have improved so much in the last 250 years, and actually in the last 50, that you'd be kind of crazy to deny that things have improved. This is a bad year and a bad decade. And it's very easy to become pessimistic when you read the news or check the stock market or look at the world situation with wars and so forth. But underneath the surface of all this chaos and negativity, technology is continuing to advance at an amazing rate of speed. And what we really rely on for economic growth is improvements in technology, where I use the word technology to mean it very broadly. Technology is not just the gadgets or computing power. It's biology. It's social technology—my ability to gather together a bunch of people in a Zoom meeting from all over the world and have a board meeting. And as this technology has grown in the broad sense, we have made our lives much easier; work has gotten easier. We do less of it. The 80-hour work week has now become a specialty of doctors, lawyers, and CEOs. Coal miners—my father-in-law was a coal miner and he worked 80 hours a week in a coal mine when they let him. He would have preferred to work 40, but he needed the money. So, we have an economy in which we produce an awful lot without doing all that much, frankly. We have probably the easiest lives of any population that's ever existed.Benz: Optimism seems like one of those secret weapons in investing, in finance in that if you're optimistic, you're more likely to stick with it, stick with your plan, and markets have tended to reward people who have stuck with it over the longer term. But it's hard to be optimistic about the long term given how unknowable things are. So, is the equity-risk premium compensation for subjecting ourselves to that unknowability?Siegel: Yes. There are two kinds of risks. One is fluctuations in asset prices. We all know what that is. The market just went down 20% or 25%, and we're feeling it. And we might forget this, but it went down 34% in a month in the spring of 2020, which is a profound dislocation in the markets. And a few months later, we forgot it. The other kind of risk is actually more profound, and it's the possibility that our general expectations for assets are wrong. And if you look back, equities have returned about real 7%, 7% plus inflation. Going forward, it's pretty unlikely that they're going to do that over the next 20 or 30 years just because of the high prices. Even if economic growth were as rapid in the future as it was in the past, you want to pay less rather than more for the stocks. So, right now, they're selling at a premium to their historical average. That conventional asset-allocation input of equities generate 6.7% or 7% real is almost certainly too optimistic, and we've got to do what Jack Bogle said, which is budget for it. We can't all earn alpha and earn a higher return, because the net alpha in the market is 0, so we would all be trying to take it away from somebody else. We have to budget for lower returns.When you look at the bond market, it's even worse. Bonds seem to be priced to yield about real 0%  to real 1%. That's much lower than the historical average, about half the historical average.Ptak: You got that right. It looks like real yields across the yield curve 49 to 99 basis points as of yesterday, which would be July 11, so a pretty paltry real yield. I did want to, if I may, stick with the general topic of optimism and its nexus with investing, talk about that in the context of value investing. I sometimes wonder if value investing pays off because it's so repulsive over long stretches that it's almost impossible to be optimistic. That does, though, raise questions about the implications for its practical usability. For instance, if investors are likely to give up on it because they do find it so repulsive when it underperforms growth as it had done until relatively recently, they might miss out on some of that payoff, which can come in bunches. Or do you think that's off base? Do you think that value investing really is usable, you just have to stick with it long enough?Siegel: I think that value investing is usable. But you shouldn't concentrate your whole portfolio in it. What we've seen is that the pendulum has swung between value and growth in very long cycles and large cycles where value does much better or much worse for the entire time that data are available. Fama and French did this back to 1927 and you get these five- to 15-year swings, which is so long that people give up on either value or growth at exactly the wrong time. So, in 2007, value had outperformed massively, and it was a great time to buy growth stocks because we were just about to enter not a tech bubble but a period of tech innovation that produced huge returns for a decade and a half. Anybody who went against the grain, anybody who went against the tide and overweighted growth stocks did much better than the market from 2007 until a year or two ago. Now people are saying, only growth works, so value is disgusting. And the more disgusted you are, the more likely it is to work. I would overweight value right now, but not all the time.Benz: I wanted to ask about intuition. It's something that tends to be greatly valued in everyday life, but it can lead us astray when it comes to investing. For example, in March 2020, which you referenced earlier, few of us expected the great snap back in the markets because intuitively we knew the pandemic would be bad for humanity. Do you think intuition was a better model for investing before markets became so efficient or has it never really worked?Siegel: Well, informed intuition, if you've spent a lifetime in, let's say, engineering and you know something about the way that computers are put together or the internet is put together or something, you might have had the intuition that this was going to be a profound change in the way everybody did everything and you bought those stocks. But the problem is that most people who bought the stocks in the first tech wave, in the 1990s, bought them without knowing anything about the individual companies. They were right about the technology; they were wrong about the companies. So, you would now have a portfolio of AltaVista and Netscape and AOL and a bunch of other companies that had promised but they were just outcompeted by somebody else. So, I would rather hang my hat on analysis than intuition unless you just happen to be one of those people with special inside knowledge but that is obtained legally. But most people who think they have inside knowledge don't. So, I would try to avoid relying on intuition too much.Ptak: Wanted to shift and talk about your role at the CFA Institute. You have a lot of experience assessing research proposals in that role. What are the best pieces of research have in common based on your experience?Siegel: Well, they draw heavily on theory to make practical recommendations that can be implemented in the short to medium term. And going back to Roger Ibbotson, we published a piece in 2007 on lifetime financial advice that came from Roger with several colleagues. We are about to publish, but have not yet received the manuscript, the second installment of that from Paul Kaplan, Tom Idzorek, and a third author whose name I forget, and that will come out later this year or early next year. So, even though they're 15 years apart, the Ibbotson people have an integrated theory of investing insurance, annuities—all these different tools in order to provide people with a lifetime income that's secure and yet has the room for adding value through either asset allocation or security selection alpha. So, that's the kind of research I like most. We sometimes have also done pieces that step outside of the box of the Financial Analysts Journal or the Journal of Portfolio Management -type of research and look at a broader set of issues—for example, geopolitics, demography. There was a beautiful piece by David DeRosa on bubbles. He's against them. I don't know how he can be for or against bubbles. Either bubbles are or bubbles are not. But he takes the position that what we think are bubbles are mostly rational responses to circumstances and then when the circumstances change, the bubble bursts. But it wasn't a bubble; it was rational at the time. I don't know that I buy that 100%, but it sure was interesting reading his logic because he expresses it so well. So, these are the kinds of research I enjoy the most.I've also done some of my own research here. I am compiling for the CFA Institute Research Foundation a book on the equity risk premium, which was a symposium of 11 fairly famous people—Marty Leibowitz, Rob Arnott, Cliff Asness and so forth—which I led. I'm not one of the famous people, but I know them all socially, so I was able to get them to come. And I edited it with a co-editor, Paul McCaffrey, who is producing a book on that as we speak. It could come out in the next month.Ptak: I did want to ask you about what's become the new rage in investing research and portfolio management, which is combining quantitative and human-driven decisions. If you had to draw up a CFA curricula for a bot, how would it differ for the current human-based curricula? And on the flip side, how do you think the current human curricula ought to be reshaped to account for the rise of things like machine learning? Is that something you've given any consideration?Siegel: A little bit. I'm writing a book review right now for Advisor Perspectives, which is an industry newsletter, a very good one. And the review is of a book by Erik Larson that's called The Myth of Artificial Intelligence. I'm giving it a good review, so you can see where I'm going to come out. I believe that machine learning is a real thing. Machines can be programmed to learn, and that's a valuable tool in investment management. But when you step beyond that to the idea of artificial general intelligence, I think it's an illusion caused by very fast computers, very big data and very clever programmers who want to create that illusion. So, we have had 300 million years of evolution—not as human beings obviously but as animals—to develop a set of connections in our brains that actually are intelligent. Yet intelligence in the sense that we are talking about now didn't really emerge until the last 200,000 years. So, it is rare. It is fragile. And we don't know what it is. It's like Justice Potter Stewart said about pornography: We don't know what it is, but we know it when we see it. And to imagine that we're, as human beings, of one level of intelligence, whatever we are, can build a machine in a few decades of those 200,000 years that's more intelligent than we are with all that evolutionary heritage is frankly ridiculous. These machines are going to do what we tell them to do. But if we tell them using instructions that are crafted well enough, it will give the illusion of being intelligent. When I don't know how something works, like everybody else, I tend to think it's magic. I'm driving and there are two or three cars lined up at a red light, it immediately turns green and makes the other traffic stop because it's a smart red light, and all it's doing is counting the number of cars that are waiting for it to turn and changes the cycle, changes the frequency, according to the traffic instead of operating on a fixed time cycle. But it looks like a pretty smart red light when you haven't encountered it before and you say “Gee, that's really amazing.” Well, I think that AI as we're experiencing it now is kind of the same as that. It's just a technology that other people understand because they developed it, but we don't because we don't have the knowledge and so we feel like it's magic or intelligence, whichever you want to call it.Benz: There's been a lot written about the glut of skilled, highly trained professionals in the investing field. Can you talk about the level of competition you see now versus what you saw earlier in your career?Siegel: The industry has become way too big. Every stockbroker has become a financial advisor. Ninety-six percent of them ought to tell people buy, hold, diversify, and rebalance and minimize taxes, and then they have to fill in that outline through implementation. In other words, somebody has to do it; their clients aren't qualified to do it. But they should mostly be telling people to buy index funds and to use premixed asset-allocation decisions that conform to what somebody at the headquarters has decided is optimal. To add value for an individual, what you really need to do is be more like a psychologist and a life counselor who says, “You have too much debt, you're not saving enough; you have too many houses; at some point your assets become a liability.” Or you don't have a house at all, you are a renter—you might want to consider a house as a hedge against inflation. But telling them which securities to buy or micromanaging the list of mutual funds, to me, is a fool's errand for most people.Inside the business, that's the public-facing side. Inside the business there are too many security analysts, too many asset allocators, too many broker/dealers. And I think that competition has become more and more people fighting over fewer and fewer real alpha opportunities, and that's why the competition feels so fierce. It used to be an easy business. And it's not easy anymore because the market is more efficient, I guess.Ptak: Wanted to shift gears and talk about asset allocation, specifically the 60/40 portfolio. And my question for you, which is a question I think many are asking, is the 60/40 debt. It's having one of its worst years ever. But the paradox is that yields are now, albeit they're still paltry, they're now a little bit higher and valuations are a tad lower, which you'd think would boost the 60/40's future prospects. What's your take on the 60/40, Larry?Siegel: I think that it's a pretty good consensus outcome of people buying what's available in the market. If you look at the supply of securities, it has to be somewhere around 60/40 because everybody holds it, and the supply and demand have to equilibrate in the long run. But why do issuers produce that ratio? I think that the underlying reason is that for a very long period of history, bonds were a very good investment. If you didn't have 40% in bonds, you wanted to, because they were producing high real returns. And that period is roughly 1981 to 2007. It's a long time. From 1940 to 1981, bonds did terribly because interest rates were going up and up and up, and we didn't have a lot of 60/40 portfolios, but what we had was mostly 0 or 100. Institutions bought fixed income to fund their pension plans. They bought fixed income to fund if there were insurance companies. The big money was in fixed income and equities were this gravy—you sold some stocks to some rich people. And over time as the stock market went up and the bond market didn't go up, you had greater interest in equities, and the consultants who emerged from this world of pension funds settled on 60/40 as a consensus. And so, you've got what I call the standard model. The allocators picked from a list of active managers in each asset class, usually buy way too many of them, didn't have access to index funds or didn't want to buy them. And so, they compared the performance of their active managers to benchmarks, fired the underperforming ones, gave more money to the outperforming ones, and since these things tend to run in cycles, generally underperform the market. They also had to have an overall asset-allocation policy where 50/50 was the tradition that they'd been coming from, but they moved it up to 60/40 because the stock market was beating the bond market and it just stayed there. Stocks are risky. So, 70/30 or 80/20 seemed like it was too volumed. We're all human, and we do what we see the person next to us doing. I think it's really just consensus-building, although there is a supply aspect to it. You have to buy what's out there. And if we all decided to increase our allocation to equities, we couldn't. But we would just be buying them from each other. This is a point Cliff Asness made. He can usually be counted on for very good thinking.Benz: Our research has found that fund investors tend to do a really poor job of utilizing so-called liquid alternative funds. If you take the illiquidity and gates away from alternatives, do you think they can still work for individual investors in the form of liquid alternatives?Siegel: Well, the term liquid alternatives has changed over time. When I started hearing about liquid alternatives in the early to mid-90s, it meant hedge funds and to some extent managed-futures funds because the stuff they were buying was liquid, and then the illiquid alternatives were venture capital and private equity. Over time, liquid alternatives have come to mean liquid to the investor. And when you securitize an alternative investment, you've removed—so that you can trade it like a stock—you've removed the one thing that has tended to give alternative investments better returns, which is the lockup. If you can lock up somebody's money for a long time, you can take risks that don't necessarily pay off in the short run, but that may pay off in the long run. If you take that away, I would rather just invest in liquid nonalternatives, stocks, bonds, and some real estate. Although some people call real estate an alternative. It's the oldest asset class, so I'm reluctant to put it in the alternatives bucket.Ptak: Wanted to shift and talk about endowments. You spent a good chunk of your career in the endowment world. And as you know, a lot of ink has been spilled concerning debates over the endowment model. Some decried it as costly and complex, others defend it as path-breaking. What are the lessons an advisor or an individual investor should take away from the success of the endowment approach? And conversely, what are the lessons they need to unlearn, so to speak?Siegel: I'll start with the last one because it's so easy. The lesson they need to unlearn is that if David Swensen can do it, so can I. He and the people at other big endowments and foundations have access to the best funds because they come to you, you don't have to go ferret them out. The best people they can afford to hire, outstanding analysts and other chief investment officers who can make millions. And if they do lose money, they have this capability of withstanding some pain. A foundation, in particular, which doesn't have professors to pay, or buildings to maintain, or students to give scholarships to, has to pay out 5% of whatever it has at the time, so if it loses some of the assets, their liabilities go down too in a one-to-one correspondence and so, at some level, they don't care. Of course, they do care because it's always better to have more money to give away than less. But the foundation isn't going to be destroyed by a 20% decline in the market.Endowments are a little trickier because the liabilities are not so flexible. If you start paying your professors less, they will just go to another place that doesn't pay less. Students will do the same thing. But these institutions also have a lot of reserve in their fundraising ability. An ordinary individual investor doesn't have any of this backstop. If I want to raise funds, I have to work harder. I'm already working as hard as I can. And I don't have the option to reduce my liabilities by saying I'm just not going to pay them. So, individuals have to be inherently more conservative. You get older, life becomes a race against diminishing capabilities and your risk level has to go down as you get older. So, there's a lifecycle effect that institutions don't experience. So, I would say that's the main lesson is, endowments and foundations have generally done well, but they have some structural advantages over individuals. Unless you have a rich uncle—a university has a rich uncle—which is the alumni and yet that's not an unlimited resource any more than your rich uncle is. But it is a backstop for bad performance.Benz: One investing paradox is that success demands humility, but humility is a tough sell. What's the humblest thing an investor can do to boost their odds of success while also attracting clients? Is it to have a long time horizon?Siegel: Well, the humblest thing an investor can do is buy index funds. It says to the client, I don't know what stocks are going to do best, but other people collectively as a market make pretty good decisions, so I'm just going to trust them to say the prices are roughly right. And when you buy an index fund, you're making a bet that the prices are roughly right. They're obviously not exactly right. In terms of having a long time horizon, it can be humility, or it could be hubris. I can claim to have a long time horizon, but I don't know what liabilities I'm going to face tomorrow, so I better have a short time horizon with some of my investments and I could also live 30 more years, so I need to have a long time horizon with other parts of my portfolio. But the time horizon issue I don't see so much as humility versus hubris, but it's a planning tool that a lot of people don't use effectively.Ptak: One of your more popular pieces of writing in recent years was an article you wrote on investing myths. If I'm not mistaken, I think you've updated it a few times to this point, the most recent being in 2020. Why'd you write it, and how would you change it if you were to update the piece yet again today?Siegel: I wrote it because somebody in Brazil paid me to come down there and give a talk on Siegel's Nine Myths of Investing. So, when that gave me an outline I had to fill in. Most of the myths have changed over time. I've updated it every two to five years. And what would I change now? Well, first of all, you'd have to go back and look at what the myths are. I don't really think I have time to go over all of them. But the one that I would change today is that stocks and bonds are always negatively correlated, so each is a good hedge against the other. It's not true. It runs in cycles. There was a period where they were positively correlated in the ‘90s and then before that at some other time, and all of a sudden, it's back. So, with stock market down, the bond market is also down, and people say, "Diversification doesn't work." Well, first of all, nobody told you to go out and buy the longest bond. Diversification within the bond market works in the sense of holding some less-volatile, shorter-term securities. They sacrifice some yield in order to get that safety. Secondly, stocks and bonds will again be uncorrelated or negatively correlated someday. But this is not that day. And there are other assets. The one that comes to mind is the original alternative investment: cash. Right now, you're losing money in cash in real terms, because inflation is so high. But, on average, over time cash has paid a percent or so over the inflation rate. And then the other one is real estate. I keep coming back to real estate because it has become the unloved stepchild in the investment world. And other than their house, nobody has any. The last time I heard somebody talking about real estate as an investment was probably in the decade of the 2000s, and probably it was going up a lot. Then there was a crash. And the crash stuck in people's minds while real estate itself turned around and went up again. And there may yet be another crash, but it's just another asset class that should probably be in your toolkit.Other myths—I kind of went out on a limb in the last version of that article and started talking more about social and political issues. One is that we can transition to entirely green energy without disrupting the entire world economy. We can't. We either have to transition slowly, which may not be good enough, but I actually happen to think it is, because energy transitions have taken a half century or so—wood, coal, coal to oil, oil to natural gas, and so forth—and the next transition is not going to be all solar and wind. Nuclear power is going to be a vital and probably the most important part of it. So, if the myth that you're subscribing to is the, let's call it the European version, although that's not quite fair because they have plenty of nuclear power in Europe. It's not going to happen, but we're going to need all the energy we've got, because the world is getting richer fast. Growth rates in China are down to 5%. That's still huge. Indonesia is higher than that, and it's a country of 300 million people that most Americans couldn't find on a map. The energy demands are going to be huge from all these different parts of the world that are growing and becoming middle class. And so that myth is something I spent a little time on in the article and I would write more about it next time.Benz: You more or less predicted the spate of inflation we would have before it happened. In fact, one of the myths you wrote about in 2020 was that the government could borrow all it wanted without sparking inflation. What did you see then and what do you think people should be monitoring to assess how long high inflation will persist into the future?Siegel: My forecast at the time was based on basic economic history from the 1700 and 1800s, which is that when the government borrows more money than it can pay back, it's going to pay it back anyway but in cheaper dollars. And the way that you get cheaper dollars is to have inflation. Inflation is a transfer of resources, of real resources, from savers who are bondholders and cash holders, to borrowers, which in this case is the government itself. So, it's tax. So, when you have a budget—that's how government budgets, it's out of balance by a lot for a long time— you're going to have a lot of inflation, because it's the only way the government is going to be able to make those payments on the bonds. I didn't see anything in the economy other than the budget deficits. And it was so early that you could say, I was wrong. There's not much difference between being a decade and a half early and being outright wrong. So, I'll say I was wrong.What I didn't see was the supply catastrophe that came with COVID and our response to COVID. So, when you get a supply shock like the one we've just been through, prices are going to rise, and you don't even need an unbalanced government budget, you don't need budget deficits for prices to rise when there are shortages of things because by ships not being able to dock and workers not coming to work, we just have never seen anything like this. And so, I think the inflation rate will come down from these astronomical rates to something more normal, 2%, 3%, 4%, 5%, but we're not going to go back to zero to 2, because governments have over-leveraged, and deleveraging is always inflationary.Ptak: What role do you think top-down macro should play in an allocation and investing process? Obviously, it's hard to correctly make a macro bet, though we've just talked about one you did correctly make, but it's even harder to translate that into a successful investment. So, should most people just avoid macro and diversify and call it a day?Siegel: If you mean macro bets to guide your general asset-allocation philosophy, I think you should. In other words, if you believe, as I do, that global economic growth, while slowing, is going to be very large in absolute terms for a very long time. In other words, the absolute terms meaning the number of overall dollars, or whatever your currency is, generated by the world economy that you want to hold equities because bonds don't give you a claim to that growth. And they give you a very indistinct claim I wouldn't bank on it. But international investors say that when a country is growing rapidly, the currency goes up, so you get a little bit of diversification that way. But equities are much more powerful, and international equities are frankly cheap relative to the United States. So, that's a macro bet, and I'm recommending it. But again, I recommended it for a long time. I thought the U.S. was expensive. It hasn't been cheap since the 2007-08-09 period. So, you should make an evaluation of those conditions and implement it through your portfolio.In general, most Americans suffer from home country bias because the U.S. is so big that you can get a pretty diversified portfolio with just the S&P 500 actually, because that's a lot of stocks, and those are all the big caps. If you lived in Belgium, you would not be under the illusion that Belgium was the whole world. It's just you can reach the border in an hour from anywhere in the country. So, you've known since you were a little kid that there's a big world out there. We Americans just don't have that intuition. So, that's why I'm saying that international is a macro bet that is reasonable to make. Now, if by macro bets you think that you act like a hedge fund and you think that the pound is going to crash, and that oil is going to go to $70 and then back to $110. No, individual investors should not do that.Benz: People aren't very good at respectfully disagreeing these days. You're someone who seems unafraid of having a fulsome debate. Besides stepping away from social media and the internet, what are some things we can do to exchange differing views without becoming polarized?Siegel: Well, if I knew I would run for President. People have become dug in—I don't like it at all. Spend a quarter of your reading time reading points of view that you know in advance you're going to disagree with, see how that person expresses themselves and what arguments they make and trying to take their side mentally while you're reading it. Consider maybe I'm wrong, maybe they're right. If I name some names, that would be too obvious where my biases are. But I would read the moderates on the other side, because the extremists are extremists, and they overstate everything. That's about all I can think of other than be nice. If the people you care about and generally respect have different views from you, ask yourself why. It's not because they're crazy or stupid or evil. It's because they've looked at the same data in the broad sense. They've looked at the same world and come up with different conclusions. Try to think about why that might happen, and then picture them doing that to you. That's about all I have to say about that.Ptak: Well, that's great advice and I think a great way to close this conversation, which we very much enjoyed, Larry. Thanks so much for your time and insights. We very much enjoyed having you on The Long View.Siegel: Well, thank you very much.Benz: Thanks so much, Larry.Ptak: Thanks for joining us on The Long View. If you could, please take a minute to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts.You can follow us on Twitter @Syouth1, which is, S-Y-O-U-T-H and the number 1.Benz: And @Christine_Benz.Ptak: George Castady is our engineer for the podcast and Kari Greczek produces the show notes each week.Finally, we'd love to get your feedback. If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com. Until next time, thanks for joining us.(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decision.)

In this special edition Swift Chat from the Investments & Wealth Institute's ACE Academy 2022, Marie Swift interviews a range of guests from the IWI Digital Hive including:  Jeffrey Levine, Chief Planning Officer of Buckingham Strategic Wealth Partners Stephen J. Resch, Vice President of Retirement Strategies of Finance of America Reverse LLC  Dan Wanous, MBA, Business Development Officer of Thrivent Advisor Network Anthony D. Mlachnik, MBA, CIMA®, BFA®, Advisor at NorthRock Partners Roger Ibbotson, Professor at Yale School of Management and Chairman and Chief Investment Officer at Zebra Capital Jessica Flynn, Communications Director of FP Transitions Ray Sclafani, Founder and CEO of ClientWise LLC Mark Paulson, Global Hedging Business Development at Allianz Life Insurance Company of North America Tim Whiting, Chief Revenue Officer and Managing Director of Sales of Investments & Wealth Institute

Tom Idzorek Show NotesOur guest this week is Tom Idzorek. Tom is chief investment officer, retirement, for Morningstar Investment Management, which is Morningstar's affiliated asset-management arm. Previously, Tom was president of Morningstar Investment Management and before that was a leading researcher at Ibbotson Associates. Tom has collaborated on a number of influential academic studies on topics including asset allocation, the liquidity of stocks, and the role of popularity and security prices. Tom serves on the editorial board of the CFA Institute's Financial Analysts Journal. He received his bachelor's degree from Arizona State University and his MBA from Thunderbird School of Global Management. He is also a CFA charterholder.BackgroundBioAsset Allocation and Managed AccountsRoger IbbotsonPeng ChenBarton WaringLarry SiegelActive Portfolio Management: A Quantitative Approach for Producing Superior Returns and Controlling Risk, by Richard Grinold and Ronald Kahn“Stop Guessing: Using Participant Data to Select the Optimal QDIA,” by Thomas Idzorek, David Blanchett, and Daniel Bruns, Morningstar.com, Jan. 30, 2018.ByAllAccountsModern Portfolio TheoryAcademic Research“Liquidity Style of Mutual Funds,” by Thomas Idzorek, James Xiong, and Roger Ibbotson, papers.ssrn.com, Feb. 10, 2012.“The Popularity Asset Pricing Model,” by Thomas Idzorek, Paul Kaplan, and Roger Ibbotson, papers.ssrn.com, Oct. 25, 2021.“Forming ESG-Oriented Portfolios: A Popularity Approach,” by Thomas Idzorek and Paul Kaplan, papers.ssrn.com, May 20, 2022.“Popularity: A Bridge Between Classical and Behavioral Finance,” by Roger Ibbotson, Thomas Idzorek, Paul Kaplan, and James Xiong, papers.ssrn.com, Dec. 10, 2018.

CFA Society Chicago member Lotta Moberg, CFA, chats with Roger Ibbotson, Professor at Yale School of Management on his article “The Long-Run Drivers of Stock Returns: Total Payouts and the Real Economy”, which was co-authored with Philip U. Straehl and published in the Financial Analysts Journal. Connect with Lotta on LinkedIn https://www.linkedin.com/in/lotta-moberg-4a856b25/ Connect with Roger on LinkedIn https://www.linkedin.com/in/roger-ibbotson-00160a2/ Articles discussed: Philip U. Straehl and Roger G. Ibbotson, “The Long-Run Drivers of Stock Returns: Total Payouts and the Real Economy,” Financial Analysts Journal, 21 February 2018, Volume 74, Issue 1. Link: https://www.cfainstitute.org/en/research/financial-analysts-journal/2018/faj-v74-n1-9 Audio summary: https://www.tandfonline.com/doi/full/10.2469/faj.v74.n1.9 Roger G. Ibbotson, Thomas M Idzorek, Paul D. Kaplan, James X. Xiong, “Popularity: A Bridge between Classical and Behavioral Finance,” Research Foundation Books, 10 December 2018. Link: https://www.cfainstitute.org/en/research/foundation/2018/popularity-bridge-between-classical-and-behavioral-finance For more episodes go to www.cfachicago.org/podcasts

Legendary stock market observer Roger Ibbotson -- whose landmark research is the basis for most people believing that large-cap stocks deliver 10 percent per year -- has said for years now that investors should not expect the future to stand up to the past. The chairman of Zebra Capital Management says in The Big Interview that low interest rates and other conditions will make it that the market is more likely to deliver about 8 percent on average over the next quarter century, still good but a significant drop off that must be planned for. Also on the show, Matt Schulz talks about a MagnifyMoney.com survey on how much Americans have been selling things out of their home -- and how much they have been making -- during the pandemic, David Trainer revisits GameStop -- which he liked prior to when it became a meme stock -- in the Danger Zone, and Mark Rank talks about his recent book, 'Poorly Understood: What America Gets Wrong About Poverty.'

This week we interview famed Yale Professor, Roger Ibbotson about the state of the stock market, the future of interest rates, value vs growth and how to look at the allocation of bonds in your portfolio. For more information, visit the show notes at https://moneytreepodcast.com/roger-ibbotson-yale-professor Today's Panelists: Kirk Chisholm | Innovative Wealth Barbara Friedberg | Barbara Friedberg Personal Finance Megan Gorman | The Wealth Intersection Nicole Tanenbaum | Chequers Financial Management

Beating the New IRA Tax Death Jim Lange, Lange Financial Group – The Sharkpreneur podcast with Seth Greene Episode 456 Jim Lange Jim Lange is a CPA, Attorney and Financial Advisor. His estate and tax planning strategies have been endorsed by TheWall Street Journal (36 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, Kiplinger’s, and most recently, Forbes Magazine. Jim has authored five peer-reviewed articles in Trusts & Estates. He is a regular columnist for Forbes.com, and his expertise on Roth IRA conversions was solicited for an article in the February 2019 issue of Forbes magazine. With 35 years of retirement and estate planning experience, Jim and his team have drafted 2,680 wills and trusts, as well as sophisticated beneficiary designations for IRAs and other retirement plans using Lange’s Cascading Beneficiary Plan. They have also administered hundreds of estates whose families have benefitted from these plans. Jim is the author of eight best-selling books, including three editions of Retire Secure!, endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson, and 50 other experts; The Roth Revolution, endorsed by Ed Slott, Natalie Choate, and Bob Keebler; The $214,000 Mistake, How to Double Your Social Security and Maximize Your IRAs endorsed by Larry Kotlikoff, Jonathan Clements, Paul Merriman, and Elaine Floyd; and The IRA and Retirement Owner’s Guide to Beating the New Death Tax endorsed by Burton Malkiel, Jack Tatar, Bill Losey, and Stephan Leimberg. Jim created The Roth IRA Institute—offering professionals in the industry advice and recommendations. His proof of the tax and estate planning advantages of Roth IRA conversions has been peer-reviewed by the top tax journal of the American Institute of . Further, all 15 IRA experts interviewed on his radio show have indicated that most taxpayers, at some point, will benefit from a Roth IRA conversion—and that was before today’s favorable new tax brackets made Roth IRAs even more advantageous. Listen to this informative Sharkpreneur episode with Jim Lange about beating the new death tax. Here are some of the beneficial topics covered on this week’s show: ●    How providing relevant content and pursuing the press helps gain endorsements. ●    Why helping people and the satisfaction of doing a good job feels the best. ●    How your should be so good that you can outspend your competitors. ●    Why you need to stay in front of your clients and keep in touch to serve them. ●    How the best way to obtain new clients is through in-person workshops. Connect with Jim: Guest Contact Info Twitter @rothguy Facebook facebook.com/RothRevolution LinkedIn linkedin.com/in/jameslangecpa YouTube youtube.com/user/retiresecure Links Mentioned: paytaxeslater.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Our guest on the podcast is retirement expert Jamie Hopkins, who is managing director of Carson Coaching and the director of retirement research at wealth management firm Carson Group. He's also a finance professor of practice at Creighton University's Heider College of Business. Hopkins wrote the book Rewirement: Rewiring the Way You Think About Retirement!, and he's a regular contributor to Forbes, InvestmentNews, and MarketWatch. Prior to joining Carson Group, he was with The American College of Financial Services, most recently serving as director of retirement research. He received his bachelor's degree from Davidson College, his law degree from Villanova University, and his Master of Laws from Temple University. He's also a certified financial planner, a chartered financial consultant and a chartered life underwriter. Hopkins cohosts a podcast that launched earlier this year. It's called Framework.Disclosure: CWM, LLC, an affiliate of Carson Group, licenses and/or offers products and services of Morningstar and its affiliates.BackgroundJamie Hopkins bio Jamie Hopkins' Forbes articles Jamie Hopkins' InvestmentNews articles Framework With Jamie Hopkins podcast Rewirement: Rewiring the Way You Think About RetirementThe American College of Financial Services Behavioral Coaching"How the Human-to-Human Connection Helps Facilitate Positive Behavior Change," by Derek Tharp, Kitces.com, Aug. 16, 2017. "Using Behavioral Finance Principles to Behaviorally Coach Clients to Make Better Decisions," by Jay Mooreland, Kitces.com, May 13, 2020. Your Mental Wealth, Klontz Consulting GroupShlomo Benartzi bio Save More Tomorrow "Help Clients Overcome These 3 Common Emotional Biases," by Jamie Hopkins, InvestmentNews, June 3, 2020. "The Neuroscience of Decision-Making Explained in 30 Seconds," by Christian Jarrett, Wired, March 18, 2014. "The Social Security Mistake Risk-Averse Folks Make," by Jamie Hopkins, Kiplinger's, July 9, 2019. The Pandemic's Effects on Retirement Planning and Older Workers"Jonathan Guyton: What the Crisis Means for Retirement Planning," by Christine Benz, Jeff Ptak, and Jonathan Guyton, Morningstar.com, June 16, 2020. Paychecks and Playchecks: Retirement Solutions for Life, by Tom Hegna, 2011. "4 Reasons to Work Longer," by Rebecca Koenig, U.S. News & World Report, June 1, 2018. "Working Longer and Other Ways to Optimize Retirement Income," T. Rowe Price. "The Pandemic Paradox for Older Workers," by Richard Eisenberg, NextAvenue.org, May 19, 2020. "A Coronavirus Recovery: How to Ensure Older Workers Fully Participate," by Monique Morrissey, Economic Policy Institute, April 16, 2020. "A Pandemic Problem for Older Workers: Will They Have to Retire Sooner?" by Mark Miller, The New York Times, June 26, 2020. Retirement Portfolio Planning"Cutting Interest Rates Hurts Retirees the Most," by Jamie Hopkins, Forbes, Aug. 3, 2019. "7 Ways an Interest Rate Cut From the Fed Can Impact Retirees," by Matthew Goldberg, Bankrate.com, March 15, 2020. "How's Your Bond Fund Holding Up?" by Miriam Sjoblom, Morningstar.com, March 18, 2020. "How Short-Term Bond Funds Went Wrong (Again)," by Miriam Sjoblom, Morningstar.com, July 1, 2020. "4 Ways to Manage Sequence of Returns Risk," by Jamie Hopkins, Forbes, Oct. 30, 2019. "The 4 Percent Rule Is Not Safe in a Low-Yield World," by Michael S. Finke, Wade D. Pfau, and David Blanchett, Journal of Wealth Management, Jan. 15, 2013. "Is the '4% Rule' Broken?" by Christine Benz and Wade Pfau, Morningstar.com, July 10, 2020. "Decision Rules and Maximum Initial Withdrawal Rates," by Jonathan T. Guyton and William J. Klinger, Journal of Financial Planning, March 2006. "3 Reasons Annuities Are the Unsung Heroes of Retirement Income Planning," by Jamie Hopkins, Forbes, June 14, 2019. "Can Annuities Become a Bigger Contributor to Retirement Security?" by Martin Neil Baily and Benjamin H. Harris, Brookings, June 2019. "Fixed Index Annuities: Consider the Alternative," by Roger Ibbotson, Zebra Capital Management, January 2018. "3 Advantages of Using Fixed Indexed Annuities in Retirement," by Jamie Hopkins, InvestmentNews, Oct. 23, 2019. "Mitigating the 3 Common Conflicts of AUM Fiduciaries," by Jamie Hopkins, InvestmentNews, Jan. 10, 2020. The CARES Act and Retirement Planning "5 Ways the CARES Act Impacts Retirement Planning," by Jamie Hopkins, Forbes, April 10, 2020. "3 Roth Conversion Traps to Avoid After the SECURE Act," by Jamie Hopkins, Forbes, Jan. 21, 2020. "Why the SECURE Act Makes 2020 the Year of Missed RMDs from IRAs," by Jamie Hopkins, Forbes, Dec. 18, 2019. "How You Can 'Undo' 2020 Retirement Distributions and RMDs," by Jamie Hopkins, Forbes, May 1, 2020. "Advancing the Study of Using Future-Self Images to Alter Behavior," by Carla Fried, UCLA Anderson Review, Sept. 26, 2018. 

Welcome to Finance and Fury Traditional asset class allocation Diversification getting harder Diversification in a world where most asset classes are becoming correlated Diversification: what it is and isn’t Diversification across asset classes is one of the most fundamental principles of investment portfolio construction Reason - different types of assets perform differently at different stages of the economic cycle When done properly - diversification across asset classes results in stable returns at less risk - An appropriately allocated portfolio helps smooth out the ups and downs of the markets so investors can enjoy the positive compounding of returns over time About downside risks – whole portfolio shouldn’t fall as much in the face of a market correction – allows a portfolio to retain its value A loss of 10% = 11% to reverse the loss A loss of 25% = 33% to reverse the loss A loss of 50% = 100% to reverse the loss – 90% loss = 900% gain Asset allocation and Diversification - asset allocation is not the same as asset class-based diversification Diversification means getting a better return for the same level of risk Contrasts with just adding bonds to an equity portfolio to reduce its volatility, as doing so would also reduce long-run returns because bonds tend to return less over time than equities. Table 1 illustrates the power of asset class-based diversification Example – $1,000 invested in the 1970s – 20% more from 50/50 with lower risk While shares and commodities are both deemed relatively risky investments, combining them helps mitigate the risk of the portfolio – due to low correlation Diversification has changed Initially - 1952 - economist Harry Markowitz’s released ‘Portfolio Selection’ in the Journal of Finance - demonstrated that building a portfolio of imperfectly correlated assets could result in reduced portfolio risk for a given level of expected return 1964 – in the same journal - Sharpe’s Capital Asset Pricing Model (CAPM) described the relationship between risk and expected return - introduced “beta” as a measure of sensitivity to market risk and the risk return relationship 1986 - Financial Analysts Journal- examined the allocations of 91 pension funds - findings that on average, asset allocation decisions explained more than 90% of pension fund risk, as measured by the volatility of returns over time. 2000 - Roger Ibbotson and Paul Kaplan argued that asset allocation policy actually explained 100% of the typical individual investor’s return Then traditional Diversification died - The extremely negative impact that the GFC of 2007–2009 had on investment portfolios caused many people to question the value of asset class-based diversification. The major reason is the correlations between asset classes - such as international and Australian equities Large Negative economic shocks that affect the whole global economy (like the GFC) can cause all equities to fall In other words - it has been observed that diversification disappears when it is most needed – but diversification never promised to ensure gains or prevent losses – but just showed the pattern based on different annual returns per asset class Various asset classes are becoming increasingly correlated, therefore making it more difficult to build a truly diversified portfolio. International markets use to be the staple of diversification – there has been an increase in correlation between the global equity markets - European markets Due to the EU Emerging markets are also becoming more closely correlated with US and UK markets Increase in unseen correlation between the fixed income and equities markets PIMCO Australia also says long-term trends such as globalisation are driving correlations higher Correlations have been rising due to greater inter-connectivity between global markets. Multinational corporations have proliferated to such an extent that what happens in Europe and Asia impacts the US markets and vice versa. Many Fortune 500 companies in the US depend on emerging markets for growth Today’s world of globalisation - greater connectivity of economies and of financial markets Means traditional asset classes are subject to more common shocks than in the past Equity correlations since 1995 – Between USLC, USSC, Int LC, EM 1995 to 2000 – USSC, Int LC, EM – showed low to mod correlation to USLC (0.3-0.7) 2001 to 2007 – USSC, Int LC, EM – showed medium correlation to USLC (0.7-0.9) 2008 to 2015 – Mod to high correlation – EM especially – Reasons – due to markets becoming more globalised and more integrated and monetary policy Also - passive investing and exchange-traded funds (ETFs) or index hugging long managers There is a positive correlation between equities and bonds - both go up or down at the same time For a long time - correlation between the asset classes has been negative Depended on the stage of the economic cycle and whether the shocks affecting the economy are demand-driven or supply-driven. Is asset class-based diversification still relevant? Theory breakdown - Correlations were never constant One criticism of Markowitz’s original theory was that it assumes asset class return, return volatility and the correlation in returns are relatively fixed, whereas they can change greatly over time as economic conditions change. Needs to be constantly updated to reflect that markets today are different from 1950s There is fact that correlations are increasing between the various equity markets and bond markets - used to be a staple of diversification Now - Instead of looking for uncorrelated investments, the focus should shift to slight reductions in correlation. Investments with correlations of 0.5 will provide greater diversification benefits than those with 0.7 correlations. while bonds were traditionally valued for their steady income streams, their attraction has dimmed somewhat with interest rates near all-time lows Therefore – if the risk-free rate (the 10-year government bond yield) is low, then expected returns from equities will adjust lower. In response to all these changes, one approach is to look at less traditional asset classes such as commodities and alternatives to construct a diversified portfolio that enhances returns for an investor’s given risk appetite   Alternative approaches to portfolio diversification More asset classes are needed to construct a diversified portfolio than in the past Old school - a universe of large cap stocks and Government bonds was sufficient – today not the case why investment universes have increased and now include corporate bonds, high-yield bonds, commodities, real assets and even currencies How many asset classes is enough? The standard diversified portfolio contains five to six asset classes Equities (domestic and international) and bonds (domestic and international) typically make up four of the classes supplemented by cash and perhaps commodities There is the risk of doing too much – Imagine bonds and share perfectly negatively correlated – your returns would be cancelled out Also certain subsections like Emerging markets equities, for example, don’t tend to add much extra diversification benefit as their returns are more volatile than developed equity markets and returns from both tend to be highly correlated But going into finer asset class diversification benefits – investing within assets classes – especially shares – ASX300 – Index isn’t that diversified outside of Financials and Resources – investing in assets classes can help The risk factor approach - defines risk factors as the underlying risk exposures that drive the return of an asset class Shares - risk is split into general equity market risk and company-specific risk A bond’s risk is a function of credit or issuer-specific risk and interest-rate risk By understanding the underlying risk factors within various asset classes, investors can ultimately choose which asset class allows them to most efficiently obtain exposure to that particular risk factor Using cash to reduce volatility and add diversification - A common recommendation for investment portfolios has been 60%-80% shares and 40%-20% bonds – using this as a benchmark investment portfolio, between 1928 and 2014, stocks provided about 71% of the return while the bonds acted as a stabilizer But Bonds have enjoyed a prolonged bull run, but with the Federal Reserve now on the path to normalising interest rates, and several other central banks set to follow, is it really wise to have a 40% allocation to bonds over the next few years? Cash could be the new stabilizer for the short term for equity portfolios - Cash is the least correlated of all assets. Cash can act as an equity portfolio stabiliser similar to bonds. However, because cash is so stable, less of it is required to achieve the same outcome as a bigger allocation of bonds in a mixed portfolio. Also – does minimize long term returns potential – but only if you continue to hold the cash long term Further, unlike bonds, cash can be used to fund short-term expenditures so that the investor does not have to sell long-term investments at a loss. Cash can also be used to buy undervalued assets as they arise. Of course, cash provides very little return, but neither do bonds at the moment. And with interest rates set to rise, returns from bonds could well be negative for a period. (Mindful Investing n.d.). Rebalancing methods - left unchanged - longer term equities have a very strong returns compared to defensive funds - the portfolio will be more exposed to shares when they are typically getting more and more overvalued – make up more of the portfolio value Limitations of diversification also need to be recognized. Diversification per se cannot protect investors from portfolio losses during major equity market meltdowns - why getting overall asset allocation right remains the most important consideration No one best way to do it – but having capital hedges like commodities (gold and physical metals) and cash reserves to take advantage of buying opportunities can limit downside risk and through purchasing undervalued assets – maximise long term returns Thanks for listening today. If you want to get in contact you can do so here: http://financeandfury.com.au/contact

  Jason and Emilia discuss some of the myths and misconceptions about fixed annuities.  To learn more visit:  www.prnewswire.com-Roger Ibbotson     www.foxnews.com-Ben Bernanke    www.usatoday.com-Powell 

Dr. Susan Pendergrass and Rex Sinquefield discuss his return to St. Louis, the biggest challenges facing the city today, active vs. passive investing and more. Rex Sinquefield is co-founder and former co-chairman of Dimensional Fund Advisors, Inc. He also is co-founder of the Show-Me Institute. In the 1970s, he co-authored (with Roger Ibbotson) a series of papers and books titled Stocks, Bonds, Bills & Inflation. These works provided the first seminal data on the performance of the financial market in the United States. At American National Bank of Chicago, he pioneered many of the nation’s first index funds. He is a life trustee of St. Louis University and DePaul University and a trustee of the St. Vincent Home for Children in Saint Louis. He serves on the boards of the Saint Louis Symphony Orchestra, the Saint Louis Art Museum, the Missouri Botanical Garden, Opera Theatre of Saint Louis, and Saint Louis University. He previously served as a member of the editorial board of the Financial Analysts Journal and the investment committee of the Archdiocese of Saint Louis. He received a B.S. from Saint Louis University and his M.B.A. from the University of Chicago in 1972. Learn more about the Show-Me Institute: https://showmeinstitute.org/ The Show-Me Institute Podcast is produced by Show-Me Opportunity

A discussion with Dr. Roger G. Ibbotson. He is the emeritus professor of the practice of finance at Yale School of Management and has written extensively on capital market returns, cost of capital, and international investment. He is also the former chairman and founder of Ibbotson Associates, a financial research and information firm that was acquired by Morningstar, Inc.

Zach has an update on the market, which is doing things he never thought he'd see. Plus a discussion with Dr. Roger Ibbotson.

Bloomberg Opinion columnist Barry Ritholtz interviews Roger Ibbotson, a professor emeritus of finance at Yale University who serves as chairman and chief investment officer at Zebra Capital Management LLC. He was also the founder and chairman of Ibbotson Associates (now a Morningstar company) and executive director of the Center for Research in Security Prices, which helped transform finance into a field of empirical study. His latest book, “Popularity: A Bridge Between Classical and Behavioral Finance,” co-authored with Thomas M. Idzorek, Paul D. Kaplan and James X. Xiong, was published in January.

Sales of Fixed Indexed Annuities (FIAs) are in the billions. So, obviously these products are resonating with some folks. For them to resonate with you please understand these things. 1. Fixed Index Annuities will most likely give you BOND-like performance, not stock-like performance. If a sales guy is selling you on the concept of stock-like performance with no risk, please run, don't walk but RUN, away. In this video I show you research by Roger Ibbotson, who is in favor of these products, what he says FIAs will most likely do. Again, BOND-like, not stock like performance. 2. If a naysayer on annuities is saying he doesnt' like them because the fees are so high, ask him how much he gets paid...in dollars, not percentages. Weird how some compare 1 product against another by only showing the fees on the one but NOT the other. 3. FIAs can provide you with guaranteed income with NO market loss. This is a fact for many of the products. If this is important to you, there is nothing wrong with that. But remember for those guarantees you will sacrifice upside performance. There simply is no two ways around that. However, if that protection helps you achieve peace of mind, there is NOTHING wrong in the least with considering one of these products. https://dta0yqvfnusiq.cloudfront.net/commo93759149/2018/02/Ibbotson-White-Paper-5a78d2dea0f40.pdf http://money.com/money/5382994/fixed-indexed-annuities/ ================================ If you like what you see, a thumbs up helps A LOT. It tells YouTube that people are engaged and so the Youtube algorithm will show the video to others who may be interested in the content. So, give me a thumbs up, please! Don't forget to SUBSCRIBE by clicking here: https://www.youtube.com/channel/UCSEzy4i9xrKPoaU9z0_XbmA?sub_confirmation=1 My Amazon Product page: https://www.amazon.com/shop/heritagewealthplanning Anything you buy there Amazon pays me a commission. Much appreciated! If you received value from this video and/or channel, and want to say thanks, feel free to send a donation via Paypal. I'm not too proud to ask! https://bit.ly/2Gq1QsE Contact me: Josh@heritagewealthplanning.com GET MY BOOKS: ALL are FREE to Kindle Unlimited Subscribers! The Tax Bomb In Your Retirement Accounts: How The Roth IRA Can Help You Avoid It https://amzn.to/2LHwQpt Strategic Money Planning: 8 Easy Ways To Put Your House In Order https://amzn.to/2wKGi50 State by State Tax Guide For Retirees: https://amzn.to/2A1TmkH GET ALL MY LATEST BLOGPOSTS: https://heritagewealthplanning.com PODCAST: https://itunes.apple.com/us/podcast/josh-scandlen-podcast/id1368065459?mt=2 http://heritagewealthplanning.com/category/podcasts/ LET'S SOCIALIZE! Facebook: http://Facebook.com/heritagewealthplanning Linkedin: https://www.linkedin.com/in/joshscandlen/ Quora: https://www.quora.com/profile/Josh-Scandlen Google +: https://plus.google.com/u/1/108893802372783791910 --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

In the inaugural episode of the PowerTalks Podcast, host Jack Martin, strategic marketing consultant and founder of Elite Advisor Group, talks with Dr. Roger Ibbotson about his latest research and why financial advisors should consider Fixed Index Annuities as a bond alternative. Dr. Ibbotson is an economist and creator of the iconic "Stock, Bonds, Bills, and Inflation" chart. He is Professor Emeritus of Finance at the Yale School of Management. He is a Member and the Chairman of Zebra Capital Management, LLC. We are also joined by John Holmgren who is the President of Zebra Capital Management.     FULL TRANSCRIPT Suzanne Lynn:    00:01     Welcome to our PowerTalks Podcast, where leading advisors find the fuel to drive their Business Alpha. InsurMark is an advisor development organization. This is the next step in our 35 year history of aligning the independent financial advisor with best of breed resources and services, from a dedicated professional team, product partners, technology vendors, practice management leaders, and business development systems. 00:31     Today, Jack Martin, our Strategic Management Consultant and Founder of Elite Advisor Group will be talking with Dr. Roger Ibbotson about his latest research, and why financial advisors should consider the fixed index annuity, a bond alternative. Dr. Ibbotson is an economist, and a creator of the iconic Stock, Bonds, Bills, and Inflation chart. He is Professor Emeritus of Finance at the Yale School of Management. He is a member and the Chairman of Zebra Capital Management, LLC. 01:05     We are also joined by John Holmgren, who is the President of Zebra Capital Management. And now, let's join Jack and Dr. Ibbotson. Jack Martin:        01:14     Hello, Dr. Ibbotson. Hey, thanks for joining us on the Jay Talks Podcast today. It looks like Yale might win the Ivy League in football again. Roger Ibbotson: 01:23     Well, I'm certainly hoping so, but I'm not gonna be an expert on that although I have attended a game already, so. Jack Martin:        01:30     Yeah, so today what we wanna talk about is your white paper. We wanna talk about Fixed Annuities and Bond Alternatives. You started your career as a Bond Manager at the University of Chicago, right? Roger Ibbotson: 01:45     Yes, I actually managed the bond portfolio at the University of Chicago, and it was a very interesting time. It was a time when bond deals were still rising, but they were about ready to hit their peaks in the early 1980s. And they got into the double digits, so it was an interesting time but not exactly like today, because today's yields are much lower of course. Although we may have the rising yields. Jack Martin:        02:10     Right. So what's your thinking about where interest rates and the bond market are today? Roger Ibbotson: 02:16     Well, you know I think they are really low actually, because bonds have actually, yielding around three percent today. And this is after a long drop in yields from the early '80s when they were double digits, falling all the way to three percent, so it's been a time when people historically have really yielded great returns on bonds. Because during that period of drop, they actually had a high yield, plus they actually got a capital gain from the drop in yields, but the way a bond works is, you get the yield and then when the yield drops, you're practically, you're holding the higher yielding bonds and your bonds go up in price. So, people for decades have really realized not only that yield, but substantial capital gains in bonds. Jack Martin:        03:09     In the title of your white paper, you use the term bond alternatives. So, help our audience understand what that means and why we need to be thinking about those today. Roger Ibbotson: 03:17     Well, you can see why we might need the bond alternative when you think of today's yields now, because now they are at that three percent, where are they gonna go from here? They're much more likely to go up than down. And if they go up, you end up with a yield plus a capital loss. And so you financially have negative returns on your bonds. So, we need an alternative actually, and that's why we looked at this whole situation because we need to look at some other way of actually taking less risk, at the same time getting a decent return. So we need another way to do this, which we don't wanna have capital losses in our bonds, which we might very well have. We need an alternative. Jack Martin:        04:02     Do you think investment advisors and investors generally maybe have a little bit of a blind spot about those bond risks? Roger Ibbotson: 04:09     Well, they do because they've been so used to actually getting positive big returns on their bonds. So, they've viewed bonds as a really a substantial source of returns. But that's not what's gonna happen going forward. Even the three percent is probably a high estimate of what you'll get going forward, because as bond yields rise, you're gonna have capital losses. So, yes they do have a blind spot, and for good reason. They're looking at history, and certainly bonds have served everybody very well, historically. It's just that today, times are a little bit different, and that today at that low yield, you're not gonna get those high returns anymore, and you may even have capital losses. Jack Martin:        04:53     So, is there something in the way that we're wired or is there something behavioral, you know behind why people are still so in love with bonds, based on what you just said? Roger Ibbotson: 05:05     Well, people tend to extrapolate of course. Whatever happened to them last year or last decade, they expect that to happen again. But what actually, you know bonds have a structure to them. You know that's not gonna happen again. We actually know what the yield is today. So when you actually know what that yield is, you know that the only way you're gonna get a capital gain is if the yields fall further. There's not too much further they could actually fall. But they could rise definitely. So behaviorally, people tend to look back at the past and think that's the future. But obviously that's not the case in the bond market. Jack Martin:        05:42     When you were at Ibbotson back in 2007, you wrote a monograph titled, Lifetime Financial Advice, and in that you discussed investing over one's life cycle. So, should investors be concerned about longevity risks with that in mind? Roger Ibbotson: 05:59     Well, they certainly should, and actually you know when you think of the whole life cycle that somebody invests in, actually the insurance can kind of play a role in every piece of it. In the early years, people have steady wage income typically, and they could take on a lot of equity risk. But the other thing they often need is life insurance. So, life insurance pays a role. Roger Ibbotson: 06:21     Now, as you start approaching retirement, you actually have to take less risk and here again, insurance can play a role, and here now we're looking at accumulation annuities, such as FIAs can play a role in accumulating your capital in a less risky way. And then when you get into retirement, annuities can also play a role, because here the retirement people need continual income streams. They can have payouts. They don't know how long they're gonna live though, because that's part of the ... that's what longevity risk is all about. Of course, we want to live for a long time, but if we do there's some chance we would run out of money, and actually the pay out annuities actually help to solve that problem because they pull everybody together, so that each one of us can actually get an income stream for the rest of our lives. Jack Martin:        07:14     So, just to follow up on that, conventional wisdom says that as we approach retirement, we wanna invest a little bit more conservatively. So, what makes those years right before retirement so critical? Roger Ibbotson: 07:26     Well, those years are, we've been saving up for retirement and actually, those are the years to actually have your sort of your maximum financial wealth because as you start into retirement, you start withdrawing from that, and paying for your retirement. Now, if you have a loss when you have the biggest amount of money at stake, that loss actually can ruin your retirement really. So, they're really important years. And that's why we're recommending in general, and I've always recommended, that as you start approaching retirement, you need to de-risk. You need to take less risk in that portfolio, and of course the conventional way that's been done is with bonds. But I guess now, now we have other instruments like Fixed Index annuities. Jack Martin:        08:14     And so, there's been a lot of conversation about those first few years after retirement, and the risks associated with that sequence of returns and those kinds of things. So, are the risks different? Should we have a different perspective on those first few years after retirement? Should we invest a little differently? Roger Ibbotson: 08:33     Well they are especially critical because we no longer have the wage income, and we are actually typically making these withdrawals. So, the combination of having that relatively large financial stake and withdrawals taking place, and then superimposing it on a return, if you have a bad return here, it's actually gonna take a large chunk out of your financial wealth. If you have a bad return much later, it doesn't matter as much because you won't have as much financial capital anyway at that point. Jack Martin:        09:08     We've been throwing around this term, fixed indexed annuities. What is a fixed indexed annuity? Roger Ibbotson: 09:15     Well, first of all it's based on an index and actually, it's based on ... and it's an insurance contract that is participating in an index. So, in our case, we'll talk about that later, but in our case it's actually an equity based index. So, if you participate in an index, like in a fixed index annuity, you're getting the upside of that index. Now, because this is an insurance product, it's actually principal protected. So, as you get the principal protection on the one side that's insured by the insurance company, and you get the participation in the index which could be an equity index, and so you get the positive returns, or part of the positive returns of the equity market, at the same time you have no real downside risk. Jack Martin:        10:07     So, is that what you were talking about in your white paper when you said, "A major advantage of the FIA is the ability of the insurance provider to transform equity returns into a more tailored risk return profile?" Roger Ibbotson: 10:22     Yes. That's exactly it because actually if you think about what people really want here, they want to participate in the equity market certainly, but they're afraid to, and they're naturally afraid to. In particularly they're afraid to as they start approaching retirement. So how do they get that participation while the reason why they're afraid is because they know that stocks can drop, and here is where the insurance company plays such a big role with these fixed indexed annuities, which if you actually had some principal protection, you're not gonna have the losses. At the same time, you're gonna get equity exposure on the upside. So, this is actually a product, fixed indexed annuities that are designed specifically to meet the needs of the investor. And that's why actually we're calling it a tailored product, because it's actually tailored to meet the specific needs of the investor. Jack Martin:        11:23     So there are a lot of investment advisors we've heard, who have a little bit of a bias against annuities. I guess they think FIAs are maybe too complicated, maybe too expensive. Are they right? What are they missing? Roger Ibbotson: 11:41     Well they can be complicated, of course. And the reason why they're complicated is, because they're tailored. I mean, if you buy suits off the rack, you know they're not gonna be as complicated as a tailored suit that is actually designed to fit you real neat. And here, by tailoring it in this case, is principal protection and equity participation, that combination is by its very nature, somewhat complicated, and so any contract that actually gets you that is somewhat complicated. Roger Ibbotson: 12:14     But that's a necessary component of a FIA and it's there for a reason. Now, the other aspect of this is the potential costs, and people have said that annuities can have costs like FIAs. Well let me say that these are really for a long term contract, and the costs are high if you get in and then you get out, and you have surrender charges and so forth. But these contracts are designed for people who can hold them for the whole term, like eight, nine, twelve years, whatever they select. But the whole term. Once they're held for the whole term, the accrued costs each year are not that high. So, the key is that these are for the long term investor, and I think the key is matching them up. In fact, by having trusted advisors here match up the right kind of investor with the FIA. Because once you have the right kind of investor that has that long term perspective, it's actually meeting their needs and the costs are not that high. Jack Martin:        13:23     In your white paper, you talk about an uncapped fixed indexed annuity strategy. What does that mean, and what's the benefit of that approach? Roger Ibbotson: 13:36     Well, we get equity exposure in those fixed indexed annuities and some of them can be capped, and some of them are uncapped. Actually I think the uncapped has the advantage though of participating in equity markets, getting equity exposure during some very big years, and so there are years where you could have very high returns in a fixed indexed annuity, and if you chop that off, of course it's much harder to get a high return by owning a fixed indexed annuity. A lot of the benefit comes in some of these great years, and we don't wanna cap it I guess, because if we cap it, we're not gonna get that benefit. Jack Martin:        14:17     So, in your white paper, you did a lot of modeling of what different investments would look like, what their performance would look like under different scenarios. And I think it's in charts 11A through 11D where you talk about, you know what happens to a 60/40 portfolio, a 60/20/20 kind of portfolio, and if interest rates are rising, if there's market volatility. So, can you talk a little bit about that modeling that you did there, and how it impacts the way we look at assets and portfolios? Roger Ibbotson: 14:53     Yes, we wanted to consider a lot of different scenarios. Of course the stock market can go up or the stock market can go down. And of course, interest rates are looked at, particularly they could be flat and unchanged but they could also rise. So we tried to look at all the combinations of these, and see what would happen to different types of portfolios. And the kind of portfolios we looked at were, well first of all, how would a stock portfolio do and how would a bond portfolio do under these scenarios, but also how we would actually, most of us would wanna put together some diversification in their portfolios. And so we would wanna see how a 60/40 stock bond portfolio would do and how a 60/20/20 where we put fixed indexed annuities in with the stocks and bonds, or just entirely putting in, taking out the bonds entirely and putting in only the annuities in a 60/40 portfolio. Roger Ibbotson: 15:53     Well, we're looking at all these scenarios with the changing interest rates, and the changing stock market. It turns out that adding fixed indexed annuities is generally very favorable. It's mitigating the risk, and for the most part the returns are very good under these scenarios. Except if the stock market drops and you have fixed indexed annuities in the portfolio, that would have that equity exposure, but it will not actually participate fully in the drop of the market because the fixed indexed annuity itself will be principally protected over the two of three years. Jack Martin:        16:33     So, over your career, you've done a lot of work on asset allocation, obviously. How do you think FIAs fit into that traditional asset allocation mix? How do they fit on an efficient frontier? Roger Ibbotson: 16:48     Well, fixed indexed annuities are essentially lowering the risk of the portfolio. And but they're doing it in a way that you're actually getting some equity participation at the same time. So they actually do very well in a portfolio. So the portfolio itself is gonna have less risk as you add fixed indexed annuities to it, and for the most part, as you substitute the bonds out and put in the fixed indexed annuities, we would mostly predict that the fixed indexed annuities would outperform the bonds. So then actually, maybe the kind of the appropriate good storm here, where you end up with potentially less risk but more upside. Jack Martin:        17:30     So it sounds like that's a positive effect on a traditional efficient frontier then right? Roger Ibbotson: 17:36     Well, it's definitely a positive effect, of course an efficient frontier means higher ... you wanna get the highest return at the least risk, and here we're lowering the risk and raising the return, and so that's exactly what you would like as an investor. Jack Martin:        17:51     So, one of your areas of interest over the years has been investor behavior. So with the markets again hitting record highs this year, is greed one of those emotions that can adversely impact pre-retirees? Roger Ibbotson: 18:07     Yeah, I would say it's not only greed. It's actually I would say both fear and greed are the sort of the key ingredients of an investor, because when things are up they wanna be all in, and then as soon as things drop a bit, they get very careful. They would tend to have their own to swing perhaps, with the markets. What we're trying to really do is actually satisfy the behavioral characteristics of people, which I guess we could sum up as fear and greed. So, on the fear side, with the principal protection, once you alleviate that fear, people are actually willing to have some equity exposure. Of course, they wanted that equity exposure when markets are up, and if they didn't get it they get greedy, and they figure, "Well, I should have done that, I should have been in the equity market." But of course when the equity market goes down, they said, "Well, I shouldn't have been in the equity market." Roger Ibbotson: 19:05     Well, you've got that combination of fear and greed which kind of paralyzes people here, and this is what FIAs are really designed to take care of here, because we protect against that fear with the principal protection, and we actually satisfy their greed to some extent by participating with equity exposure in these products. And so, now if the markets are up and they have good returns, they're not upset anymore. Because they can be upset by just not being in the market. And the other hand when the market's down, and they are principally protected then they're upset. So, I said this was tailoring. These products are really tailored to meet the behavioral needs really of investors because they have on their own, they would have very much difficulty in actually taking on equity risk. Suzanne Lynn:    19:59     How prepared are you? Dr. Ibbotson is doing a great job of teaching us about the power of the fixed indexed annuity, and we'll get right back to the podcast in just a second. But, how prepared are you to integrate his research into building a more sustainable business? At InsurMark, we have a proprietary value engineering process that helps growth minded advisors get more out of their life's work. Advisors engaged with us in this process are realizing more client time, more family time, and more value from their business. That's what we call Driving Business Alpha. So check out our Value Engineering video at insurmark.net to learn more. Now, let's get back to Dr. Roger Ibbotson. Jack Martin:        20:47     So, we spent most of this podcast talking to Dr. Ibbotson. I'd like to turn to Dr. John Holmgren, who's President of Zebra Capital Management. John, I understand your firm has developed a new index for us in FIAs. Can you talk a little bit about how that works, and why investment advisors should be considering it? John Holmgren: 21:09     You know, it's right Jack, we have. If you look at the white paper, Fixed Annuities Consider the Alternative, we did that in such a way to make a more academic study, where we looked at a generic index, which would be similar to an S&P500, a large cap generic index on an uncapped basis. And really what we did, is we created the NYSE Zebra Edge Index, which is then utilized in the nationwide new heights platform, to create an FIA that's really harnessing these aspects that Roger was talking about. Particularly the idea of popularity, and we wanna have the less popular stocks that are also lower volatility, which then increases the exposure of the index that can actually be utilized in a risk controlled environment. John Holmgren: 21:58     So, we're using a behavioral financed drive investment philosophy that's designed to avoid and also the exploit the behavioral biases that Roger just talked about. And this is implemented in a systematic way that is designed to dynamically allocate between the equity index as well as the risk control, to maintain that five percent volatility. And in doing that, you know we really created a product which is really designed again as Roger had referenced, for long term investors who are looking to de-risk their portfolios yet participate in the upside of the equity market, while having a capital protection. And that's really kind of what we've done and how this whole process has evolved. Jack Martin:        22:44     So, should investment advisors look at that index a little bit differently than what we were talking about earlier with respect to FIAs? How should they be applying it? John Holmgren: 22:55     Well, it's really in the FIA context, as approaching retirement or in the accumulation phase, the latter stages of accumulation of assets. You know, looking at a way of de-risking. So, again back to the idea of a bond substitute as doing that, where the investor can get again, someone who's willing to invest long term. And I wanna be very clear that these strategies are not for everybody, but they're for longer term investors who are looking at an allocation for a certain time period, and looking also post retirement as well, because as you asked earlier about people in earlier stages of retirement or mid-stages of retirement, we really wanna have a flow of income who cannot withstand a sharp draw down, that's really what this is for. So it really fits into that context. I don't really wanna say that it's a new asset class, but it is an asset class that fits in. You know, somewhat of a hybrid between equity and bonds, giving you the volatility of, similar volatility to bonds but with higher upside potential. Jack Martin:        24:03     Well, this has been really enlightening, and I wanna thank you John, and I wanna thank you Dr. Ibbotson for taking the time to educate us about FIAs as a bond alternative. We also wanna thank Annexus for making the Zebra Capital Team, the new Zebra strategy, and particularly Dr. Ibbotson's work accessible to all financial advisors. And we wanna thank all of you who are listening, and we'll see you soon on the next JTalks Podcast. Suzanne Lynn:    24:31     Well, that was a powerful conversation. We have a simple way for you to get your copy of his white paper, along with info about the nationwide, and the NYSE Zebra Index that John Holmgren talked about. Go to insurmark.net and click on the Ibbotson podcast button. It's that simple. Thanks to Annexus for making Dr. Ibbotson and his research available today. 24:55     If you've got questions about FIAs, insurance, or Driving Business Alpha, please call one of our advisor development consultants at 800-752-0207. Stay connected with future episodes by subscribing today and keep posted on all our offerings by following InsurMark on LinkedIn.  

Roger Ibbotson, Chairman and CIO of Zebra Capital Management, visits to talk how his research into behavioral finance reveals the stock market has hot and cold securities. He believes that identifying those cool stocks will provides better returns over the long-term. His firm has partnered with the NYSE to create the NYSE Zebra Edge Index to employ his strategy and help people plan a financial future to not outlive their money.

In today’s conversation, I sit down with a legend in the world of finance, Mr. Roger Ibbotson himself. In 1977, Roger published the first edition of Stocks, Bonds, Bills, and Inflation, a collection of historical returns dating as far back as 1926 - in a sense, he was ahead of his time as no one had compiled this historical market data all in one place before, in a way that was easy to understand. Based on the positive response from this landmark study, he founded Ibbotson Associates in the same year which he later sold to Morningstar in 2006 for $83M. Roger is currently Chairman and CIO at Zebra Capital Management and he has also served as a Finance Professor at the Yale School of Management for 30 years. Today we dive into his most recent work, a whitepaper titled “Fixed Indexed Annuities: Consider the Alternative.” In it, Roger examines how today's historically low interest rates and bond returns are putting many retirees in danger of not producing enough income from the fixed portions of their portfolios through retirement. He gets into the biases both consumers and financial advisors often have when they hear the word “annuity” and why his math shows that fixed indexed annuities may prove a viable alternative in many retirement portfolios. Get Roger's Whitepaper "Fixed Index Annuities: Consider the Alternative" at BradleyJohnson.com/45

If you have ever received any investing advice, you have probably heard the disclaimer: past performance is not an indicator of future results. But, studying history also generates an adage: those who do not learn history are doomed to repeat it. The Lange Money Hour is proud to welcome Yale School of Management Professor Emeritus in the Practice of Finance, the esteemed Dr. Roger Ibbotson. Dr. Ibbotson has spent his career analyzing market history to make it a bit easier for investors and economists to attempt to predict how the market might perform in the future. For many economists and financial advisors, the SBBI (Stocks, Bonds, Bills, and Inflation) comparison is an indispensable resource for statistics that are needed to analyze asset class performance. Performance analysis is critical to successful investing; and top quality data is essential to balance risks and rewards. Jim and Roger will discuss the SBBI, the state of the markets in 2017, and multiple investment topics in Roger’s areas of expertise including: Popularity Liquidity Investment Returns Mutual Funds/Index Funds Valuation Portfolio Management International Markets

Maximizing Long-Term Investment Profits with Dr. Roger Ibbotson. Roger G. Ibbotson is chairman and CIO of Zebra Capital Management, LLC, an equity investment and hedge fund manager. He is founder, advisor and former chairman of Ibbotson Associates, now a Morningstar Company. He has written numerous books and articles including Stocks Bonds Bills and Inflation with Rex Sinquefield (updated annually) which serves as a standard reference for information and capital market returns.

The Importance of Asset Allocation, James Lange, CPA/Attorney, Guest: Dr. Roger Ibbotson, Founder, Chairman and Chief Investment Officer of Zebra Capital and Professor in the Practice Emeritus of Finance at the Yale School of Management, Episode 129 TOPICS COVERED: Guest Introduction: Dr. Roger Ibbotson, The Efficient Market, Long Term Premiums, Alpha and Beta, Eugene Fama, Making the Best Investments, Robert Shiller and Behavioral Science, Questions from Listener John about How Much to Invest Where and Dimensional Fund Advisors, Asset Allocation

Episode 104 - When Building Retirement Portfolios, How Big a Role Does Asset Allocation Play in Performance? with guest Roger Ibbotson, PhD

In episode #123, Roger Ibbotson argues that a liquidity strategy meets the criteria for a legitimate and sustainable style with clear performance advantages.