Financial expert Larry Swedroe joins the show to discuss active versus passive investing, comparing past performance numbers to illustrate which investment strategy has a more reliable outcome.
7:07 “The fact of the matter is, the most successful investors understand that markets will go down and they have a strategy of what they’re going to do when they go down”
8:16 Start of Interview with Larry Swedroe
9:13 “Let’s go over real quickly this active versus passive debate”
9:36 “He [Eugene Fama, Nobel Prize winner] defines ‘active’ as those who are engaged in individual stock selection and/or market timing”
12:13 “Any decision to own any asset allocation that’s different from the market is an active decision in terms of your strategy”
15:06 “You have to be prepared to accept long periods and stay the course”
16:36 “The market is getting smarter and it’s getting harder to outperform the market itself”
17:07 “Because the market and investors are getting more intelligent, do you think these risk premiums would ever go away?
22:34 “Ignore the ups and downs of the market, and if anything be a rebalancer which means you’re going to buy when everyone else is panic selling”
27:11 “People’s focus on dividends is a purely psychological one”
31:16 End of Interview with Larry Swedroe
33:18 “Another way to help with the overall volatility of the portfolio is looking at the taxation of the portfolio. You have three different pools…you want money in tax-free accounts, taxable accounts and tax-deferred accounts”
36:51 “If you can save more money in taxes then you can take less risk in the portfolio”