September 14, 2021

Larry Swedroe of Buckingham Strategic Wealth -Evidence-Based Investing and Sustainability

1 hour 16 minutes

In today’s episode, Rusty talks with Larry Swedroe, the director of research for Buckingham Strategic Wealth.

Larry finished his MBA in Finance and Investment from NYU. Larry stays connected to the financial industry by spearheading research for Buckingham and the BAM Alliance, but he’s also a prolific writer who has authored or co-authored 16 books. His mission is to explain investing theories to investors in an accessible and straightforward way.

Larry talks with Rusty about evidence-based investing, the effects of sustainability on investing, and diversifying portfolios with risky assets.

"You should invest in as many unique sources of risk as you can identify that meet all of the criteria that I established—those five criteria of persistence, robustness, pervasiveness, implementability, and intuitive rationale. Everything we do is based upon not my opinion, but the evidence has to meet those criteria" ~ @LarrySwedroe

Main Takeaways

Evidence-based investing is always the winning strategy. Focusing on the risk you can handle and ignoring stock picking and market timing can help you beat the market.

Larry’sMy three rules of investing — are: give advice based on evidence, identify risk factors, and examine the robustness of the market.

The five criteria for examining risk —are persistence, robustness, pervasiveness, implementability, and intuitive rationale.

Sustainable companies get better ratings, which then eventually helps them increase their cash flows and drive their valuations up. Investors are now seeing this trend, too, and their actions as investors can impact how companies implement their objectives.

Risky assets should have similar risk-adjusted returns. Portfolios must be diverse and should consider including alternative investments.

Blockchain technology is truly innovating the finance world, but the key advice for investors is to assess and accept the changing regulations and the massive illiquidity it might face.

Links

Larry Swedroe on Twitter

Larry Swedroe on LinkedIn

Garryowen (from the film They Died with Their Boots On featuring Errol Flynn)

Buckingham Strategic Wealth

Reducing the Risk of Black Swans by Larry Swedroe

Warren Buffett Lost $132 Million On Financial Weapons Of Mass Destruction

Wall Street Journal

Continental Can Company

Kimberly Clark

Baruch Lev

A note on the relationship between Fama-French risk factors and innovations of ICAPM state variables

Morningstar

Appirio

Parametric Portfolio Association

Levi Strauss

Cliffwater

Stoneridge

Ray Dalio

Harvard University

Yale University

SEC

Bernard Baruch’s 10 Trading Rules

Connect with our hosts

Rusty Vanneman

Robyn Murray

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