John De Goey, Senior Investment Advisor and Portfolio Manager at Wellington-Altus Private Wealth joined us for this episode to discuss dangers of complacency arising from the industy's optimism bias, as well as numerous others, threaten to derail the best laid plans of investment and financial planning and the finances of everyday investors. Our conversation covers a range of topics, including John's career in finance, his latest book "Bullshift: How Optimism Bias Threatens Your Finances," and the importance of addressing biases in investing. We also discuss the challenges of introducing new ideas in the financial services industry, the importance of realistic financial planning assumptions, and the need to reassess one's investment strategy regularly. Among the ideas we emphasized here, was the importance of being 'prepared' for potential changes in the market, such as inflation, and building a more balanced portfolio that can withstand unexpected gyrations. Please enjoy our conversation, and thank you for tuning in.

HIGHLIGHTS

John De Goey's career path [00:01:37] John De Goey moved to finance after studying public administration, has written books and articles to help consumers understand the industry and have better relationships with advisors.

[00:09:04] Advisors can provide value through behavioral coaching, which helps investors remain grounded and stay invested while being realistic.

[00:19:58] Lower expected returns and longer life expectancies may require more savings and a longer working life to achieve desired retirement lifestyle.

[00:26:00] 40-year bull market in bonds ended in 2022, rates to stay high, need to reassess investing strategies, widely anticipated recession.

[00:40:21] Invest in products with reasonable, risk-adjusted returns and non-correlated weekly returns to maintain optimism for the long run.

[00:45:14] Be prepared with two strategies, each less than 5% exposure; consider 15% allocation to alternatives, plan carefully to avoid large losses.

[01:06:30] CAPE is not good for timing markets; past experience doesn't dictate future outcomes; risk of not paying attention to valuations.

[01:13:18] Central banks need to fight inflation to pivot; pain must be manufactured before pivot is possible.

[01:18:09] Investors may be taking on more risk than they think due to optimism bias and need to reassess, prepare for potential issues, and reflect on their portfolio.

[01:20:41] Advisors must recognize and reflect on their own biases to give better advice.

Where to find John De Goey:

John De Goey on Linkedin

John De Goey at Wellington-Altus Private Wealth

Get the book:

Bullshift: How Optimism Bias Threatens Your Finances

Where to find the RYA Crew:

Rodrigo Gordillo on Linkedin

ReSolve Asset Management

Pierre Daillie on Linkedin

https://AdvisorAnalyst.com