ABOUT THE GUESTS

Larry Swedroe
ABOUT Larry

Larry Swedroe is principal and director of research for Buckingham Asset Management, LLC, a Registered Investment Advisor firm in St. Louis, Mo. He is also principal of BAM Advisor Services, LLC, a service provider to investment advisors across the country, most of whom are affiliated with CPA firms. Swedroe's mission is to educate people on [...]

ABOUT HOSTS

Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine
ABOUT Alan

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Published On
February 27, 2016

Larry Swedroe joins the show again to discuss what recency bias is and why you should avoid it. Joe and Al ask Larry what the key to successful investing is, and Larry talks about his books the Incredible Shrinking Alpha and Think, Act and Invest like Warren Buffett.

2:12 “The conventional wisdom goes like this: take distributions first from taxable accounts such as your brokerage accounts, then from tax-deferred accounts like your IRAs and 401(k)s…that is the rule of thumb for most advisory firms”

8:05 Interview with Larry Swedroe

9:14 “What investors tend to do, as we know, is they tend to buy after periods of strong performance which means they’re buying when prices are high and then they tend to sell after periods of poor performance, which means valuations are relatively low and expected returns are not high”

10:01 “Research shows, shockingly, that individual investors on average are such poor investors that they actually underperform the very mutual funds they actually invest”

13:21 “The key to successful investing is to understand what Napoleon advised about military strategies: He said battles are never won on the field, they’re won in the preparation stage”

15:26 “You have to just accept that markets are unpredictable and you must have discipline, you want to be a buyer when everyone is panic selling and you want to be a seller when everyone else is getting greedy. There is a simple although not easy way of doing that and it’s called rebalancing your portfolio”

16:14 “What people don’t understand is really how stocks are priced”

20:01 “People have this notion that if they can get in and out of certain asset classes or get in and out of certain markets, that’s going to enhance their overall investment experience, but actually the opposite is true”

21:04 “The key is to understand how markets have changed over the last 70 years”

23:59 “It’s not necessarily the mutual fund, it’s the allocation and how you’re actually positioning the overall accounts towards different areas of the markets”

24:55 “Here’s the key: what investors need to focus on is not trying to choose a money manager or stock that they think will outperform…what you do want to focus on is putting your money in the asset classes that you believe are appropriate for you to hold”

28:43 “Investing is really simple; you need to have a well-thought-out plan to make sure you don’t take more risk than you have the ability, willingness and need to take”

29:38 End of Interview with Larry Swedroe

35:25 “When you have a fund that’s outside of a retirement account and the manager is buying and selling, that’s causing short-term gains which are the most expensive of gains. Now all of sudden you’re paying more in taxes”

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