For this episode of the Rational Reminder Podcast, we review our year by playing back and discussing a collection of the most impactful moments of the show from 2020. This has been a drastic year filled with many learnings for us all, and in today’s show, we cover topics of happiness, decision making, dealing with uncertainty, and the connection that financial planning and investing have to all of this. We collect some amazing gems of wisdom from guests like Annie Duke, Ken French, Michael Kitces, Patricia Lovett-Reid, and a whole lot more, whittling down an original list of over one hundred of this year’s finest moments to a collection of just 45. The show starts out exploring themes of the connection between wealth and happiness, keeping cool in stressful times, and the transformations that crises kickstart. From there, we talk about the importance of models and systems for informing investing and behaviour in general, and the idea that unexpected outcomes swamp expected ones in the short term. We also look at what market history has to say about staying in your seat rather than market timing when things look bleak. Next up, we cover themes of the value of a flexible approach to retirement spending, how families should think about financial planning, whether 60/40 portfolios are dead, and why stock market returns in the U.S. are higher under Democratic presidents. Moving onto the subject of decision making, we explore some of our guests’ thoughts on evaluating decisions, outcomes bias and the role of luck, and more. We also consider the topic of human capital, how it relates to investing, and what we should really be spending our time on. The subject of the convergence of brokerage firms and financial advisors then leads to a great exploration of the role of financial advisors. We wrap up with some extra special perspectives on how optimal financial planning should be geared around the person that you want to be rather than maximizing wealth for the sake of it. Tune in today for an amazing overview of the year and to hear all the ways we have changed and grown thanks to our incredible guests.

 

Key Points From This Episode:

• Looking back on the year: Pandemic adjustments and how this podcast has grown. [0:00:15]
• Shoutouts and Cameron’s method of putting past clips together for today’s show. [0:06:20]
• Brian Portnoy and Andrew Hallam on wealth and happiness. [0:09:15]
• Dealing with stress and volatility with Dr. Moira Somers and Dave Goetsch. [0:13:48]
• Craig Alexander on market volatility and Jim Stanford on crisis and revolution. [0:18:27]
• Dave Goetsch and Greg Zuckerman on the benefit of models and systems. [0:23:11]
• The role of unexpected returns in outcomes and how to deal with this. [0:27:04]
• Small and value stocks relative to the market with Dr. William Bernstein. [0:33:09]
• Ken French and Cliff Asness on whether ‘this time is different’. [0:35:29]
• Enduring tracking error with Cliff Asness and Andrew Hallam. [0:38:37]
• Cliff Asness on whether 60/40 is dead and Lubos Pastor on why stock market returns in the US are higher under Democratic presidents. [0:41:00]
• Changing your risk portfolio when the market is dropping with Ken French. [0:45:25]
• Market timing versus awareness of investing history with Mark Hebner and Dr. Bernstein. [0:48:20]
• Wade Pfau on how expected returns fit into financial planning and the ‘safety first’ approach. [0:52:15]
• Moshe Milevsky on retirement spending and Pattie Lovett Reid on addressing one’s financial situation. [0:56:13]
• Annie Duke, Ken French, and Victor Ricciardi on making and evaluating decisions. [1:00:05]
• Greg Zuckerman on the role of luck in decisions leading to positive outcomes. [1:08:15]
• Forecasting as a way of knowing the range of outcomes with Craig Alexander. [1:11:15]
• Moshe Milevsky and Dr. Bernstein on human capital, financial planning, investing and asset allocation. [1:13:34]
• Josh Brown on what to spend your time on and Fred Vettesse on when to start saving. [01:16:28]
• Michael Kitces on the convergence of brokerage firms and financial advisors. [01:19:20]
• Dennis Mosey Williams and Ken French on financial advice for gaining wealth and being content. [01:20:57]
• Allison Schrager on the role of financial advisors for mitigating systematic risk. [01:25:00]
• Mark Hebner on the role of financial advisors for explaining a range of outcomes. [01:26:38]
• Scott Rieckens and Dennis Mosey Williams on what finding happiness means. [01:30:03]