What is the fiduciary standard and why is it so important? Find out the pros and cons of fiduciaries and how they affect you. Also, special guest Larry Swedroe joins the show to explain why dividend paying stocks may not be your best investment. Like other popular strategies, dividend paying stocks could lead to negative expected returns in the future. Larry also gives listeners advice on what to look for when searching for a financial advisor.
3:13 “It’s not a matter of if you need a plan, I think now it’s just a matter of who. It’s who will help you create that plan”
15:37 “There are some commissionable brokers and advisors that might put themselves out to be a fiduciary, but on the flipside they’re still selling you products so you really don’t know who you’re working with because there’s very little transparency, and that creates, in my opinion, a huge conflict of interest”
16:40 “If you don’t want to see how much that you’re paying, then I would not work with a fiduciary, because everything is transparent”
20:00 Beginning of Interview with Larry Swedroe
22:18 “We do know that whenever you have a high demand for anything, you will drive prices up and in the case of securities, when you drive prices up that looks good in the short term but for new investors, it drives the future expected returns down because you now have higher valuations”
22:45 “Dividend paying strategies used to look like value strategies; so if you own stocks that paid relatively high dividends, they tended to be value stocks. And value stocks have provided higher returns than growth stocks”
23:52 “People are going to be almost certainly disappointed going forward; they think they’re going to get better than market returns, but they’re virtually doomed to get lower than market returns because prices are so much higher”
28:14 “Diversification, just like your insurance policy, is always working. Sometimes you like the results, and sometimes you don’t”
30:32 “Make sure that you can get in writing from the advisor that they will provide a fiduciary standard of care which requires them to give advice that’s solely in your interest”
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