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Podcast

Episode 25: Q&A with Jean Van de Walle – Investing in Emerging Markets Part 3

We continue with the third and last part of our interview with Jean Van de Walle, CIO of Sycamore Capital and author of TheEmergingMarketsInvestor.com, discussing about investing opportunities in emerging markets.

In this episode of our interview with Jean Van de Walle we discuss about the following topics:

  • 00:00 CAPE and other useful valuation metrics for forecasting equity expected returns
  • 03:38 EM equities tailwinds: Increased earnings per share and currencies mean reversion
  • 06:12 Investing in local segregated markets such as Iran’s Tehran Stock Exchange
  • 09:06 How much to pay in expense ratios to access an individual country fund
  • 10:58 Are higher expected returns for EM worth the costs of negative co-skewness?
  • 11:40 Emerging markets risk premiums vs additional costs of foreign withholding tax
  • 13:10 Factor risk premiums across emerging markets equities
  • 16:18 How ESG compliance of emerging markets equities might influence their returns
  • 18:20 When and how much should investors overweight emerging markets
  • 20:12 Inflation hedges in this market environment and how much cash to hold
  • 22:12 Emerging markets equities as an asset class in decumulation phase
  • 23:37 How beginners should use simple strategies to invest for the long term
  • 28:22 How Jean Van de Walle would invest a lump sum of 100,000 EUR today

Episode 24: Q&A with Jean Van de Walle – Investing in Emerging Markets Part 2

We continue with the second part of our interview with Jean Van de Walle, CIO of Sycamore Capital and author of TheEmergingMarketsInvestor.com, discussing about investing opportunities in emerging markets.

In this episode we discuss about the following topics:

  • 00:00 Efficient market hypothesis – How much to allocate to emerging markets equities
  • 08:34 Sources of idiosyncratic vs systemic risks for emerging markets as an asset class
  • 18:26 The evolution of EM assets correlation from a globalization/deglobalization perspective
  • 21:38 Uncorrelated return streams for EM assets: China A Shares as a portofolio diversifier
  • 23:03 Individual EM countries which might be facing the famous “Dutch disease”
  • 28:11 Expected rate of return and volatility for EM equities for the following decade
  • 29:25 The impact of negative co-skewness and how to handle disaster risk in EM
  • 32:18 The correlation between economic growth and equity returns in emerging markets

Episode 23: Q&A with Jean Van de Walle – Investing in Emerging Markets Part 1

Our guest on the podcast today is Jean Van de Walle, CIO of Sycamore Capital. He has almost 30 years of investment experience in emerging markets and as a portfolio manager of Latin American and global emerging markets equities with Citibank, AllianceBernstein and the Abu Dhabi Investment Authority. He also worked as an investment banker and as a journalist in Venezuela. He enjoys writing and teaching as well as finding great investment opportunities in emerging markets.

Van de Walle holds and MBA from the Wharton School of the University of Pennsylvania and is currently teaching a class on investing in emerging markets at the NYU Stern Business School.

In the first episode of our interview with Jean Van de Walle we discuss about the following topics:

  • 00:00 Intro Jean Van de Walle, great investor with 30 years of experience in emerging markets
  • 09:20 How expensive emerging markets were in 2008 prior to a decade of underperformance
  • 13:28 Jean’s CAPE based valuation model for forecasting emerging markets expected returns
  • 21:45 Emerging markets historical absolute returns vs risk adjusted returns
  • 25:00 The most exciting emerging markets opportunities: Top down vs bottom up approach
  • 29:22 The main risks of taking a more active approach with emerging markets equities

Episode 22: Q&A with Giorgio aka Mr. RIP – Retire In Progress Part 3

In the third part of my conversation with Giorgio aka Mr. RIP, the Italian blog author of RetireInProgress.com we discuss about his investing journey for reaching early retirement.

The main topics of this episode are the following:

  • 0:00 Mr. RIP’s expected rate of return of his investments for the next decade
  • 02:45 How Mr. RIP would invest a lump sum of 100,000 EUR today
  • 09:45 Mr. RIP’s view on cryptocurrencies
  • 14:20 Top 5 individual stocks Mr. RIP would pick to invest for the long term
  • 18:18 One low cost Eastern European country Mr. RIP would choose to FIRE
  • 20:11 The right time to retire early and how to spend your financial freedom
  • 24:00 Mr. RIP’s final advice for a young man starting financial independence journey today

Episode 21: Q&A with Giorgio aka Mr. RIP from Retire In Progress-Financial Independence Part 2

In today’s conversation with Giorgio aka Mr. RIP, the Italian blog author of RetireInProgress.com we discuss about his investing journey for reaching financial independence.

The main topics of this episode are the following:

  • 0:00 Income generating assets and real estate investing as a stable source of cashflow
  • 08:50 CAPE based tactical asset allocation
  • 13:00 Risk management overlay strategy to prevent catastrophic losses
  • 22:03 Default safe withdrawal rate and dynamic spending rules in retirement

Episode 20: Q&A with Giorgio aka Mr. RIP from Retire In Progress – Investing From Zero To Hero

Our guest on the podcast today is Giorgio, also known as Mr. RIP, an Italian software engineer born in 1977 and living in Switzerland since 2012. He is the owner of RetireInProgress.com, a blog about personal finance, financial independence and early retirement where he discusses on all topics related to net worth, career path, FIRE aspects, investing and frugality.

Giorgio has become a millionaire and reached financial freedom starting from zero to hero by following the winners path: work hard, save money and invest in a diversified portfolio of ETFs. We’ll discuss with Mr. RIP about retire early lifestyle and life goals.

In the first episode of our interview with Giorgio aka Mr. RIP we discuss about the following topics:

  • 0:00 Intro about Giorgio aka Mr. RIP, the owner of RetireInProgress.com early retirement blog
  • 01:44 How Mr. RIP became a millionaire living the dream of F*ck You Money
  • 06:15 The right FIRE amount you need as a single man living in Italy
  • 09:48 Basic vs discretionary expenses and how to live an intentional life
  • 11:42 Mr. RIP’s net worth expansion while working as a software engineer at Google
  • 13:41 Mr. RIP’s high savings rate despite living in an expensive country as Switzerland
  • 16:23 Buying vs renting an apartment and house prices in Switzerland
  • 19:30 Sequence of return risk while paying rent for an apartment
  • 23:30 Handling stock market volatility from an emotional standpoint

Episode 19: Q&A with Maciej Wojtal, CIO of Amtelon Capital – How To Invest 100,000 EUR in Iran, Part 3

In today’s conversation with Maciej Wojtal, CIO of Amtelon Capital (http://www.amteloncapital.com/), we discuss about how Tehran Stock Exchange performed amid rising tensions between US and Iran.

The main topics of this episode are the following:

  • 0:00 How the stock market performed during US-Iran tensions after the death of Soleimani
  • 08:20 How Iranian equities usually perform in periods of higher than average inflation
  • 10:40 Risks for Iran to fall victim to the so called Dutch disease
  • 12:25 Capital Gains, Dividend & Withholding Taxes
  • 13:24 Subscription and redemption fees applicable
  • 14:05 Maciej Wojtal’s view on Polish equities and Ukrainian stocks listed in Warsaw
  • 15:30 Maciej Wojtal’s personal asset allocation and why he is so confident on Iran
  • 22:21 Iran as a deep value play – How to handle idiosyncratic risks
  • 26:04 How many investors Amtelon Capital currently has
  • 27:13 Compliance rules – Amtelon Capital regulated/audited by third party
  • 28:25 Should retail investors buy emerging markets and go to the beach?
  • 32:08 Where people can find more about Amtelon Capital and Iranian mutual fund

Episode 18: Q&A with Maciej Wojtal, CIO of Amtelon Capital – How To Invest 100,000 EUR in Iran, Part 2

In today’s conversation with Maciej Wojtal, CIO of Amtelon Capital (http://www.amteloncapital.com/), we discuss about risk/reward opportunities for investing in Iran for the long term using a bottom up approach.

The main topics of this episode are the following:

  • 0:00 Why institutional investors cannot access Iranian stock market despite being attractive
  • 01:27 Why Iranian equities are still cheap despite impressive 2020 market rally
  • 06:50 Risk management overlay strategies and how to handle Iranian rial currency volatility
  • 09:55 How many stocks Amtelon Capital currently holds in their Iranian mutual fund portfolio
  • 13:00 How to minimize skewness risk through diversification and portfolio rebalancing
  • 15:38 How non-US investors can access Amtelon Capital fund and 100k minimum entry
  • 18:34 Possibility of lowering the minimum entry of 100,000 EUR in the future
  • 23:34 How Maciej Wojtal would like to invest a lump sum of 100,000 EUR today
  • 27:44 Why higher than average fund expenses might be offset by absolute returns

Episode 17: Q&A with Maciej Wojtal, CIO of Amtelon Capital – How To Invest 100,000 EUR in Iran, Part 1

Our guest on the podcast today is Maciej Wojtal, founder and chief investment officer of Amtelon Capital, a mutual fund focused on Iranian equities. His fund gives worldwide non-US investors like you and me access to profitable businesses with low debt and valuations from one of the countries with the youngest population and great demographics.

The minimum entry for investing in Iran is 100,000 EUR. Iran’s stock market is dominated by retail investors with foreign ones making up less than 0.5% of the market cap. Wojtal looks for companies that have pure export exposure and tries to avoid companies affected by US sanctions using a bottom up approach with strong understanding of macro drivers. Maciej has also experience working with JP Morgan at the Equity Derivatives Group, an internal hedge fund within the bank.

In the first episode of our interview with Maciej Wojtal we discuss about the following topics:

  • 0:00 Intro Maciej Wojtal, CIO of Amtelon Capital, a mutual fund focused on Iranian equities
  • 01:30 Motto: Delivering above-average returns requires a higher than average level of curiosity
  • 03:17 The best investing opportunities for the next decade across emerging markets
  • 13:35 Why Iranian equities are so cheap as compared to other emerging markets
  • 15:24 Valuation metrics used to decide which markets are inexpensive
  • 16:44 How Maciej Wojtal first visited Tehran discovering Iran investing opportunity
  • 24:10 Why Iranian citizens are considered potential threats on an ex-ante basis
  • 26:22 Local Iranian brokers offering trading services for International investors in Tehran

Episode 16: Q&A with Bill Bengen – MARKET TIMING & RISK MANAGEMENT during unprecedented times

In today’s conversation with William Bengen we discuss about market timing and risk management overlay strategies that might help investors prevent catastrophic losses during unprecedented times of increased risks and expensive equity markets.

The main topics of this episode are the following:

  • 0:00 Bill Bengen’s conversation with Harry Markowitz, the founder of modern portfolio theory
  • 05:06 Famous studies showing that if you lose best trading days you lose long term returns
  • 06:40 Bill Bengen’s current asset allocation in this risky market environment
  • 14:20 What diversifiers we can use in the current market market environment
  • 18:56 The debate between Larry Swedroe and Jeremy Grantham regarding market efficiency
  • 24:00 William Bengen’s advice on how a young man should invest a lump sum today

Episode 15: Q&A with Bill Bengen – Dynamic spending rules in retirement: CAPE based Safe withdral rate

In today’s conversation with William Bengen we discuss about dynamic spending rules in retirement (such as using CAPE based safe withdral rate vs Guyton-Klinger guardrails) that might help fight both sequence of return risk and inflation.

The main topics of this episode are the following:

  • 00:00 CAPE based safe withdrawal rates vs Guyton-Klinger guardrails
  • 02:16 Bill Bengen’s floor and ceiling spending rules vs other dynamic withdrawal rules
  • 04:42 Safe withdrawal rates for capital preservation vs depletion for different inflation regimes
  • 06:15 Median portfolio value for an average retiree at the end of his retirement
  • 08:00 The risk of leaving too much money unspent in retirement
  • 13:02 Bill Bengen’s opinion on the CAPE based withdrawal rate created by Karsten Jeske

Episode 14: Q&A with Bill Bengen – The 4% rule of thumb as a safe withdrawal rate in retirement

Our guest on the podcast today is William Bengen, the famous author of the 1994 paper called “Determining withdrawal rates using historical data”, who first discovered the 4% rule of thumb, which has now become the core safe withdrawal rates planning tool for the financial independence retire early movement.

Bill has been a prolific researcher of retirement planning and is the former owner of Bengen Financial Services, an independent registered investment advisor that he launched in 1989. He received his Bachelor of Science degree in aeronautics and astronautics from MIT. Bill retired from his financial planning practice in 2013 but continues to conduct research on retirement planning and withdrawal rates.

In the first part of our interview with Bill Bengen we discuss about the following topics:

  • 0:00 Intro about William Bengen, the famous author of the 4% rule of thumb discovered in 1994
  • 01:50 What made Bill Bengen study safe withdrawal rates in the first place
  • 03:46 How the 4% rule might change in the future to serve retirement spending needs
  • 05:45 How inflation might affect the traditional 4% rule and how to adapt to during inflationary times
  • 07:25 The importance of risk management – How to handle inflation vs sequence of return risk
  • 09:35 The problem investors are facing when most asset classes offer poor prospective returns
  • 11:00 Reducing sequence of return risk using trend following and the CAPE ratio
  • 12:55 How trend following might boost safe withdrawal rates for an all equity portfolio
  • 14:28 How to actively manage your portfolio using tactical asset allocation
  • 16:07 How to invest aggressively in accumulation phase to build capital
  • 17:04 Adjusting safe withdrawal rates based on Bengen’s study “Asset Allocation for a lifetime”
  • 18:22 The safe withdrawal rates that would work in worst case scenario for perpetuity
  • 19:25 Why Bill Bengen revisited his initial 4% rule upgrading safe withdrawal rate to 4.7% for today
  • 20:30 The lowest stocks allocation you should have in retirement for the long term
  • 22:00 How to choose the right time to retire in terms of inflation and stock market valuations
  • 22:49 How to adjust your portfolio given that you pay a high insurance premium for holding cash
  • 24:20 What Bill Bengen thinks of TINA (there is no alternative) in a low interest rates environment
  • 25:00 Should a young man still be aggressive in his savings phase despite high equity valuations?
  • 26:18 How to invest a lump sum of 100,000 EUR today if you are a middle aged man
  • 28:42 Why Bill Bengen believes we might have a better buying opportunity in the future

Episode 13: Q&A with Dr. Wade Pfau, Phd, CFA – Retirement spending strategy for managing sequence of returns risk

In today’s conversation with Professor Dr. Wade Pfau (https://retirementresearcher.com/) we discuss about the retirement spending strategy for managing sequence of returns risk. Wade D. Pfau, Ph.D., CFA, RICP®, is the program director of the Retirement Income Certified Professional® designation and a Professor of Retirement Income at The American College of Financial Services in King of Prussia, PA, as well as a co-director of the college’s Center for Retirement Income.

As well, he is a Principal and Director for McLean Asset Management. He holds a doctorate in economics from Princeton University and has published more than sixty peer-reviewed research articles in a wide variety of academic and practitioner journals. He hosts the Retirement Researcher website, and is a contributor to Forbes, Advisor Perspectives, Journal of Financial Planning, and an Expert Panelist for the Wall Street Journal.

The main topics of our interview with Dr. Wade Pfau, CFA are the following:

  • 0:00 Dr. Wade Pfau’s retirement income research background
  • 0:50 Bill Bengen’s latest quote on valuation based tactical asset allocation
  • 03:55 Wade Pfau’s view on inflation and how to invest a lump sum of 100,000 EUR today
  • 07:16 Sequence of return risk for young investors receiving an inheritance
  • 08:55 Maximum time horizon for using a bond tent without losing too much purchasing power
  • 11:10 Common retirement mistakes made by retirees and how to define retirement success
  • 14:20 The 4 approaches to managing sequence of returns risk in retirement
  • 17:43 Safety first principle vs safe withdrawal rates: income vs probability based approach
  • 21:03 Bucket strategy – Alternatives for annuities and reverse mortgages
  • 25:23 Downsizing home equity in a country like Romania with a very high home ownership rate
  • 26:40 The rationale for selling your pension fund to invest in Bitcoin and behavioral biases
  • 28:00 Default static asset allocation for traditional vs early retirees and median portfolio value
  • 33:39 Investing in riskier assets vs levering a market cap weighted portfolio to take more risk
  • 34:51 Why overall sequence of returns risk is higher when investing in riskier assets
  • 36:11 Default safe withdrawal rate that should be incorporated into financial planning
  • 39:45 Wade Pfau’s preferred choice for a safe withdrawal rate to be used in retirement
  • 42:10 Valuation based safe withdrawal rate vs Bengen’s floor and ceiling variable spending rule
  • 44:49 Reducing retirement risk using a rising equity glidepath vs. the risks of a secular bear market
  • 46:49 U shaped glidepaths in late part of the accumulation stage and target date funds in US
  • 49:44 Is it a mistake to reduce equity allocation when markets are expensive?
  • 51:50 Main retirement risks of following dividend growth investing approach
  • 54:10 The sustainability of emerging markets pensions systems and better alternatives we have
  • 55:50 Real estate investing: Earning cashflow for managing sequence of returns risk in retirement
  • 57:28 Using gold as a hedge against sequence of returns risk for improving safe withdrawal rates
  • 58:23 When a young investor should start de-risking his portfolio
  • 59:30 Strategy for alleviating sequence of returns risk in late accumulation and early retirement
  • 01:02:07 How to handle emotional biases during retirement when we have no buffer assets
  • 01:04:36 Why Wade Pfau supports the 30-70 equity glidepath when using Monte Carlo simulations
  • 01:09:30 Wade Pfau’s final advice for those starting to plan for their financial retirement

Episode 12: Q&A with Karsten “Big ERN” Jeske, CFA – Dividend yield shield & rental income: Cashflow in retirement

We continue Investing Podcast episodes with the third part of our exclusive interview with Karsten Jeske, Phd, CFA. In today’s conversation with Big ERN from Early Retirement Now we discuss about cashflow in retirement: the role of dividend yielding stocks, rental income and more.

The main topics of this episode are the following:

  • 0:00 Accumulation/Decumulation Combined Glide Path
  • 02:55 Optimal Glidepath from a risk parity All Weather to an all equity portfolio
  • 09:25 Cashflow in retirement: Big ERN’s views on the deleveraging process and bad bear markets
  • 14:00 Leveraged vs unleveraged real estate investing and rental income in retirement
  • 18:00 Dividend growth investing: Why dividends cannot be a replacement for safe withdrawal rates
  • 23:18 Dividend aristocrats: Survivorship bias for stable dividend payers
  • 27:34 Dividend Yield Shield: Why dividends are not passive income (Only total return matters)
  • 30:35 If dividends are irrelevant in investing, may earnings yield be a yield shield?
  • 35:30 Supplemental income (side hustle) to alleviate sequence of return risk in early retirement
  • 38:06 Big ERN’s view on cash cushion as an insurance during retirement
  • 39:55 Correlation between someone’s active income or net worth and current asset allocation
  • 46:32 Asset Allocation for someone coasting to retirement with a substantial nest egg and no savings
  • 51:20 Monthly vs Yearly contributions: How frequently we add/take money out of our portfolio
  • 54:33 Early Retirement Now Lessons: Big ERN’s famous last words

Episode 11: Q&A with Karsten “Big ERN” Jeske, CFA – Rising Equity Glide Paths: Early Retirement Now

We continue Investing Podcast episodes with the second part of our exclusive interview with Karsten Jeske, Phd, CFA. In today’s conversation with Big ERN from Early Retirement Now we discuss about how to alleviate sequence of return risk using rising equity glide paths in retirement.

The main topics of this episode are the following:

  • 0:00 Safety first principle vs SWR: “The Yin and Yang of retirement income philosophies” – Wade Pfau
  • 07:30 Equity Glide Paths in Retirement vs Static Asset Allocation: Wade Pfau’s 30-70 equity glide path
  • 12:23 Should we start the reversal assuming a 60-100 equity glide path reaches the peak?
  • 16:22 Time vs valuation based triggers: “Reducing Retirement Risk with a rising equity glidepath” – Pfau
  • 21:26 Bellman Principle of optimality: How to respond to stochastic returns & reoptimize the glide path
  • 26:17 How a bond tent protected your nest egg during deflationary vs inflationary times & alternatives
  • 36:20 Big ERN’s views on other precious metals such as silver, platinum or “Digital Gold” (Bitcoin)
  • 42:30 Early Retirement example: Accumulation/Decumulation Glide Path vs Forced Bond Liquidation

Episode 10: Q&A with Karsten “Big ERN” Jeske, CFA – Sequence of return risk & safe withdrawal rates

My guest today is Karsten Jeske also known by the nickname Big Ern. Karsten has an undergraduate degree in Business from the University of Bielefeld in Germany and a Master Degree and Doctorate in economics from the University of Minnesota. He is also a CFA charterholder and an early retiree who became FIRE in 2018 at the age of 44 after a long career in academia, government and Corporate America.

He previously taught economics at Emory University in Atlanta and worked at the Federal Reserve Bank of Atlanta and Bank of New York Mellon Asset Management in San Francisco. He uses his new-found time to travel with his family and write for his blog Early Retirement Now on all topics related to finance and especially the financial challenges of early retirement. In today’s conversation with Big ERN we discuss safe withdrawal rates, sequence of return risk and much more.

In the first part of our interview with Karsten Jeske aka Big ERN we discuss about the following topics:

  • 0:00 Intro: Big ERN’s financial background as a PhD and CFA charterholder
  • 01:45 Why retirement spending is harder than saving for retirement
  • 03:40 How we should adjust safe withdrawal rates for early retirees depending on investing horizon
  • 06:52 The 4% rule and CPI adjustments: Can low prospective returns be offset by low future inflation?
  • 11:11 Flexible withdrawal rule and the risk of running out of money/purchasing power in retirement
  • 14:41 The failsafe rate for an all equity portfolio and optimal equity allocation in retirement
  • 21:15 CAPE based SWR as a flexible spending rule during retirement with low volatility of withdrawals
  • 29:56 How to implement a valuation based withdrawal rate when you don’t invest in only one market
  • 36:44 How you can live a good life with sequence of return risk in an equity centric portfolio
  • 40:00 Market Timing and Risk Management: Optimal safe withdrawal rate for the momentum strategy
  • 46:50 Asset Allocation and CAPE: Combining valuation based SWR with dynamic asset allocation
  • 52:02 Why longer time horizons offer higher success rates for capital preservation in retirement
  • 55:52 CAPE based asset allocation: Should we filter out expensive markets to serve retirement needs?

Episode 9: Q&A with Marta – Financial Freedom Journey

Our guest in this episode of our Investing Podcast is Marta, a designer from UK living in London and born in Poland, running a youtube channel named “All The Honeys” where she discusses about personal finance and her FIRE journey.

In this episode I’m talking with Marta from All The Honeys about her journey to financial freedom, social status, life goals, relationships, regrets, savings and investing.

Episode 8: Q&A with Jack Vogel – Financial planning, valuation models and dual momentum investing strategies

Our guest in this episode of our Investing Podcast is once again Jack Vogel from Alpha Architect, one of the great experts in value investing and momentum trend following strategies. Our conversation is very useful for retail investors who want to learn more about financial planning.

We discuss with Jack about the current market environment, the increase of inflation across the globe, the value factor effect within individual countries, valuation models for expected returns and standard deviation, as well as dual momentum strategy, proposed by Gary Antonacci in his book.

The main topics of our interview with Jack Vogel from Alpha Architect are the following:

  • 0:00 Q&A with Jack Vogel from Alpha Architect on value investing and momentum strategies
  • 00:40 Stock market volatility, the rise of inflation and interest rates movement
  • 02:00 How does inflation affect corporate earnings and stock valuations
  • 04:40 Stocks as an inflation hedge and correlation between real equity returns and inflation
  • 07:20 Best performing asset classes during inflationary times and sequencing the market cycle
  • 09:25 Discounted cash flows of value vs technological stocks in inflationary times
  • 11:16 Valuation models for expected returns and standard deviation
  • 12:30 Research Affiliates valuation model for estimating returns within the efficient market frontier
  • 20:09 Efficient Markets risk and reward trade-off and tracking error regret of picking the highest expected return asset
  • 22:12 Investing in the cheapest countries based on CAPE vs a global value index fund
  • 26:35 The value factor effect within countries empirical data
  • 33:17 Research Affiliates data on current/historical CAPE and fair value indicator for countries
  • 38:19 A simple financial model for retail investors to estimate scenario outputs based on given assumptions
  • 41:41 How to protect your portfolio from tail risks/fat tails in equity investing
  • 44:02 Credit Suisse Global Investment Return Yearbook expected returns
  • 51:16 Rebound in equity prices after a stock market decline
  • 56:23 The current earnings yield for stocks vs the level of indebtedness of the economy
  • 58:26 The reason Jack Vogel likes trend following
  • 01:00:35 Dual Momentum Investing Model described by Gary Antonacci in his book
  • 01:04:28 The right role for a long term trend following system in a portfolio of stocks and bonds
  • 01:06:16 The right time to start de-risking your investing portfolio
  • 01:07:31 Book recommendations for investors looking for long term discipline
  • 01:11:18 The best strategy for a retail investor

Episode 7: Q&A with Paul Merriman – How to plan your retirement as a young investor

Our guest in this episode is the famous US financial educator, Paul Merriman, which has more than 50 years of experience in investing and wealth management. He has founded Merriman fee-only advisory firm in 1983, advising clients on matters like investment planning, taxes, estate planning, insurance and risk management based on academic research and objective data rather than emotions and forecasts.

Those of you who have already read my beginner’s guide in investing should remember that I’ve also recommended Paul Merriman’s Sound Investing Podcast for Every Stage in Life, as a great educational resource for young investors. Paul has also recently published a new eBook named “We’re talking millions – 12 ways to supercharge your retirement”, which you may find available to read for free in PDF format by clicking on the following link: https://paulmerriman.com/signup/

The main topics of our interview with Paul Merriman are the following:

  • 0:00 “We’re talking millions – 12 ways to supercharge your retirement” book written by Paul Merriman
  • 04:20 Saving vs spending as a young person and the FIRE movement vs YOLO (you only live once)
  • 08:30 Robert Kiyosaki’s method: How dangerous is it to use leverage to reach your financial goals?
  • 12:00 The question every young investor has: When is the best time to invest?
  • 17:00 Dollar cost averaging vs lump sum investing vs market timing/buying the dip strategy
  • 22:50 Higher value at risk (VaR) and lower expected returns for market timing strategy
  • 27:46 Emotional biases in Buy and hold vs time series momentum trend following strategies
  • 30:04 Should a young investor be all in equities?
  • 33:53 Long term treasury bonds outperforming large cap growth stocks for 40 years
  • 36:18 Lowest fees ETFs vs higher TER: Should we approach costs on a relative or absolute basis?
  • 41:28 A simple strategy of investing in a global index fund vs a more complex one with higher returns
  • 45:40 Ultimate Buy and Hold Portfolio, Factor Tilts and Overweighting of Undervalued Regions
  • 50:15 Should we invest in uncorrelated assets like gold if they don’t have a positive expected return?
  • 01:01:00 Rebalancing rules to reduce risk in investing: Purely discretionary vs rebalancing tables
  • 01:04:12 When do we know we have enough to retire from working?
  • 01:12:12 When dollar cost averaging might underperform lump sum investing for a 10 years period
  • 01:23:40 Why people are afraid of investing because they consider the stock market being a gamble
  • 01:28:48 How Paul Merriman met the father of index investing John Bogle

Episode 6: Q&A with Meb Faber – Tactical Asset Allocation, Global Value and Momentum Trend Following

Our guest in this episode is Meb Faber (https://mebfaber.com/), the co-founder and chief investment officer of Cambria Investment Management. He also runs the youtube channel “The Meb Faber Show” where he hosts a weekly podcast.

Meb has also written several books on investing matters such as “Global Value” or “Global Asset Allocation” as well as well documented articles like “A quantitative approach to tactical asset allocation”, advocating for a value approach in investing doubled by a momentum and trend following strategy.

The main topics of our interview with Meb Faber are the following:

  • 0:00 The current investment environment and a young investor’s perspective on stock market valuations
  • 04:19 How to invest a lump sum of 100,000 EUR as a young investor vs dollar cost averaging
  • 08:54 Short volatility strategy from a value investor’s perspective
  • 12:37 Long-short market neutral strategy and shorting of expensive stocks
  • 16:23 Mebane Faber’s current asset allocation in this market environment
  • 22:09 Tilting our investing portfolio towards emerging markets and value equities
  • 28:20 The volatility and skewness of cheap individual countries portfolio based on CAPE
  • 32:32 Cambria’s Global Value ETF using a composite of cyclically adjusted price ratios
  • 36:00 Top down vs bottom up investing perspective within cheaper/undervalued regions
  • 38:12 Trinity Portfolio and the findings of the paper “A quantitative approach to tactical asset allocation”
  • 45:00 The biggest disadvantage of a time series momentum strategy based on SMA200
  • 47:55 How to allocate the safe part of your portfolio in a low returns investing environment
  • 51:35 The Trinity study on safe withdrawal rates and asset allocation during retirement
  • 55:20 Portfolio inflation hedge besides equities and valuation perspective for the long term
  • 58:33 The one and only instrument Mebane Faber would invest over the next decade

Episode 5: Q&A with Larry SwedroeDividend investing strategies and passive income in retirement

In the second part of our interview with legendary capital markets expert Larry Swedroe, we discuss about dividend investing strategies and passive income in retirement. Larry has a lot of expertise in retirement planning, such as managing sequence of returns risk and safe withdrawal rates.

We also discuss about the dichotomy between strategic and tactical asset allocation, the concept of utility of wealth curve and how individual investors can overcome behavioral issues and avoid engaging into stock picking. Larry disapproves financial educators from Romania who recommend buying the dip strategy or tactical asset allocation and advocates for portfolio rebalancing instead.

In this podcast episode with Larry Swedroe we discuss about the following topics:

  • 0:00 The dichotomy between strategic and tactical asset allocation
  • 07:49 Stock market valuations and US growth stocks in bubble territory
  • 13:25 Rules based buying the dips strategy and portfolio rebalancing table
  • 17:19 Spread between value and growth stocks and practical ways of investing in emerging markets
  • 20:25 Are value stocks safer buying in a margin of safety or riskier offering a value premium?
  • 26:10 Investing play money in individual stocks and fundamental indicators for stock picking
  • 30:30 What would Mr. Larry Swedroe do differently in investing if he were to start over again
  • 31:35 Dividend Investing Strategies, Bucharest Stock Exchange Dividend Yield & Passive Income
  • 39:28 Dividend Growth Investing Strategies, Quality and Profitability Factor
  • 40:49 Why dividends are not income and ow to avoid checking the value of your portfolio so often
  • 44:30 Should you account income risk in your own risk aversion model
  • 47:47 The concept of utility of wealth curve and how to avoid being greedy in capital markets
  • 53:03 Larry Swedroe’s famous last words: The role of education in investing and life

Episode 4: Q&A with former hedge fund manager Lars Kroijer – Investing demystified

Our guest in this episode is Lars Kroijer, a former hedge fund manager who established market-neutral hedge fund Holte Capital in 2002 and he also worked for a value-focused hedge fund based in New York and the investment division of Lazard Asset Management in New York. While at graduate school he held internships with the private equity firm Schroder Ventures and management consulting firm McKinsey.

Lars Kroijer is also the author of “Investing Demystified” book and youtube video series where he advocates for simplicity. He graduated Magna cum Laude from Harvard University with a degree in economics and received a MBA from Harvard Business School. Lars is a Danish national living in London and is active in the UK personal finance community Monevator.com.

In this podcast episode with Lars Kroijer we discuss about the following topics:

  • 0:00 The most common 3 mistakes investors often make
  • 01:18 Japanification of global equity markets and managing tail risks
  • 03:16 Investing Demystified book and simple asset allocation for retail investors
  • 07:12 Inflation hedges besides equities for your portfolio
  • 08:58 Diversification across independent systematic risk factors
  • 11:48 US stocks in bubble territory and tilt towards undervalued regions like emerging markets
  • 15:54 Emerging markets equities market cap weighted vs smart beta long only factor tilted ETFs
  • 18:08 Increased market volatility and overinvesting in equities during drawdowns
  • 20:20 When and why to hire a financial planner
  • 22:50 A quantitative approach to tactical asset allocation and simple rules based market timing
  • 24:30 Why not to overinvest in property and why leverage and concentration risk are not a free lunch
  • 28:28 When to adjust your strategic asset allocation and de-risk your investment portfolio

Episode 3: Q&A with Larry Swedroe – The incredible shrinking alpha and factor based investing

Our guest in this episode is the famous author and researcher Larry Swedroe. Larry is chief research officer at financial advisory firm Buckingham Wealth Partners, which he joined in 1996. In his role, Larry is responsible for reviewing academic research on financial and investing matters.

Larry Swedroe has written numerous books on investing and finance, the most recent being the second edition of The Incredible Shrinking Alpha, which he co authored with Andrew Berkin. Larry began his career as a risk manager at Citicorp, received his bachelor degree in finance from Baruch College in New York and his MBA in finance and investment from New York University.

In this podcast episode with Larry Swedroe we discuss about the following topics:

  • 0:00 Introduction – Capital Markets Expert Larry Swedroe
  • 01:26 Lack of financial education
  • 03:26 Recency bias, Bitcoin and Tesla
  • 05:11 Investment gurus, charlatans and “pornography”
  • 06:25 Correlation between trading, stock picking and poverty
  • 13:15 Active vs passive management, seeking alpha in investing
  • 23:30 Diversification as the only free lunch in investing
  • 30:15 Global market cap weighted index funds and size premium
  • 32:38 Retail investors (dumb money) owning lottery stocks
  • 40:21 Reducing the risks of black swans
  • 44:00 Risk Parity and All Weather Portfolio
  • 47:28 Stock market valuations and efficient market theory
  • 54:26 How to build a portfolio in accumulation phase with a target return
  • 57:45 Rules based market timing strategy

Episode 2: Q&A with Rick Ferri, CFA – Reaching your financial goals with passive investing

In this episode I have discussed with Rick Ferri, CFA, one of the most famous experts in financial analysis and advice for do-it yourself investors. Mr. Ferri is a former US marine corps officer and fighter pilot, who started his investment career in 1989 as a stockbroker on Wall Street.

Now he is helping individual investors like you and me to customize their portfolios and reach their financial goals, based on their needs and the low-cost investment principles. He is also the host of “Bogleheads on investing” podcast. It is a great honor to have him with us in our investing podcast.

In this podcast episode with Rick Ferri we discuss about the following topics:

  • 0:00 Intro about Rick Ferri, CFA, the host of “Bogleheads on investing” podcast
  • 03:03 Why young people speculate in individual stocks or the price of Bitcoin
  • 07:55 Why “naive” index funds investing outperforms most professional money managers
  • 10:58 Why experience, superior information and trading skills are worthless
  • 14:40 Should teenagers use leverage in financial markets?
  • 17:09 Leverage in real estate for residential apartments
  • 20:25 Complexity vs Simplicity – What should a successful index fund investor choose from?
  • 25:31 Sticking to the plan for reaching your financial goals
  • 31:02 How to build wealth as an investor
  • 34:54 Current market valuations and investor’s odds for getting a positive equity risk premium
  • 40:47 Small Cap Value UCITS ETFs and small cap blend premium
  • 46:26 Layers of protection in the financial markets, rebalancing and buying the dip strategy
  • 49:03 Tax efficiency for portfolio rebalancing
  • 53:23 Static vs dynamic asset allocation
  • 58:20 Age, risk tolerance and client’s needs
  • 01:00:16 Chasing higher returns in an efficient market
  • 01:13:59 REITs, Gold and Bitcoin
  • 01:22:35 Adjustable safe withdrawal rates and managing sequence of returns for retirement
  • 01:30:35 The role of financial fiduciary advisors today
  • 01:39:36 How Rick Ferri met John Bogle, the father of index investing
  • 01:40:15 The transition from military career to finance and investing
  • 01:46:07 How to build a long term investing mindset

Episode 1: Q&A with Jack Vogel from Alpha Architect – Investing demystified

I have discussed with Jack Vogel regarding the valuations of the capital markets, interest rates, diversification across asset classes (stocks, real estate, bonds, commodities, cryptocurrencies, managed futures, smart beta ETFs), lump sum investing vs dollar cost averaging, risk premiums across regions, portfolio and risk management, value investing and buying the dip.