Don and Tom dismantle the “passive bubble” trope, walk through Morningstar’s active/passive scorecard (great one-year anecdotes vs brutal long-run stats), and recap the steady shift of investor dollars toward indexing. A caller tries to drag the show into politics via data independence (BLS/Fed), prompting a level-headed reminder that markets price reality over rhetoric. The TSP’s revamped I Fund gets kudos for finally adding emerging markets (with a nudge to pair it with value tilts outside TSP). Two meaty segments cover long-term care: costs, weak benefits on traditional policies, when hybrids can make sense, and why many households effectively self-insure or rely on Medicaid as the backstop. Another caller asks about Die With Zero; verdict: great mindset—if your plan already covers worst-case needs.

0:05 Holiday opener, calls invite, “passive is a bubble?” setup

2:06 Is price discovery “broken” if money flows to index funds?

2:40 Active still >50% of U.S. fund assets; global passive ≈20% AUM

4:22 Morningstar barometer: 42% of active beat in 1-yr… so 58% didn’t

6:36 Long-run stats: 3-yr 17.7%, 5-yr 8.2%, 10-yr 2.5%, 15–20-yr ≈~1% of active beat

8:32 Flows: from 1 in 20 dollars passive (’97) to 1 in 2 today; costs matter

10:58 Caller (Sammamish): data independence, politics, rates, inflation risk; market effects vs reality

16:19 Inbox: TSP update—I Fund now includes EM; still thin on value/small tilts

18:32 Why add small/value (incl. intl); performance pops don’t change the case

22:26 Caller (LTC): traditional vs hybrid; math on premiums, caps, Medicaid backstop

26:37 Basic quote math: ~$1,900/yr at 60 for ~$150k cap; lump-sum hybrids trade-offs

29:10 Caller (Maya, Los Altos): Die With Zero—great if plan covers tail risks; most retirees can’t

34:38 Caller (Americus, GA): Mutual of Omaha pitch; self-insure debate; taxes/deductions misconceptions

38:55 Wrap: how to send questions; where to get advice

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Don and Tom mark Labor Day weekend with a lively discussion of the so-called September Effect—Wall Street’s superstition about historically negative returns in September. They remind listeners that short-term market timing is a losing strategy and that knowing (not guessing) your risk tolerance and asset allocation matters most. The conversation ranges from Florida’s endless summer and biblical rains to ETF overload, collective investment trusts, tax quirks, and the futility of dodging volatility. Along the way, there’s humor about Costco, fertilizer, wrong numbers, and shameless plugs for Don’s LitReading podcast.

0:04 Labor Day banter, Florida heat, biblical rains, Asheville trip

2:12 September Effect explained—history and hype

4:41 Why you should know, not do, with your portfolio

6:15 Average September returns since 1928 and investor psychology

8:28 Market timing pitfalls and missing best days

10:28 Costco’s Jim Sinegal quote and life’s sugar vs. manure metaphor

12:29 Bogle wisdom: don’t peek at your portfolio

14:05 Listener correction: senior deduction phase-out details

19:14 Don plugs LitReading’s return with an O. Henry story

20:34 ETF explosion—4,300 funds in U.S., 12,000 worldwide

26:15 How to eliminate bad ETFs (fees, leverage, active management)

29:11 Don tests a new GPS analogy ad for Appella Wealth

31:12 Listener question on state tax burdens (California vs. Washington)

34:05 Call-in about 401(k) funds converting to CITs

37:19 CIT regulations, reporting, and transparency explained

39:39 Apple vs. Spotify podcast listener demographics

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Tom kicks off with a check-in on bond market returns, reminding listeners that bonds are about stability, not yield-chasing. He’s joined by advisor Roxy Butner, who helps answer listener questions about fixed-allocation vs. target-date funds, how much international exposure is enough, Ameriprise “CL” fund share classes with high fees, and whether hybrid long-term care annuity products are worth considering. Together they emphasize cost awareness, simplicity, and aligning investments with real-life needs instead of sales-driven products.

0:04 Intro and bond returns update (BND, DFIGX, SWSBX)

2:30 Why bonds belong in portfolios despite modest returns

2:47 Mailbag intro with Roxy Butner

3:13 Shelly asks about fixed-allocation vs target-date funds

5:34 Balanced vs LifeStrategy funds and international exposure

7:01 Frank asks about U.S. vs international allocation split

8:23 AVGE, DFAW, and “overthinking” the international percentage

10:39 Decades of U.S. vs international performance

11:15 Angie asks about Ameriprise “CL” fund share classes

13:32 Expense ratios and fiduciary concerns

14:54 Comparing low-cost index alternatives

15:18 Ford asks about hybrid LTC annuity products

17:30 Income planning first vs peeling off money for LTC

18:34 Real-life client experiences with LTC riders

20:33 Policy complexity, surrender decisions, and care costs

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Don fields listener questions from Asheville in this Friday Q&A edition. Topics include calculating investment returns with XIRR versus simple time-weighted methods, rebalancing U.S. vs. international allocations in a Vanguard portfolio, whether children can have multiple custodial accounts (and why 529s may be better), AVGE versus VT and why factor tilts matter long-term, and a skeptical look at Frank Vasquez’s Risk Parity Radio strategy that leans on commodities and “golden ratio” portfolio construction.

1:03 How to calculate investment returns (XIRR vs. time-weighted)

4:19 Portfolio allocation: VTI + VT + BND vs. simpler mix

7:10 Custodial UTMA accounts vs. 529s

9:24 AVGE vs. VT: expense ratios, factor tilts, long-term logic

15:06 Frank Vasquez and Risk Parity Radio critique

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This episode of Talking Real Money digs into recency bias—our human tendency to expect the future to look like the recent past—and how it’s quietly reshaping retirement portfolios. Don and Tom examine rising stock allocations in 401(k)s and target-date funds, even among older investors, and why this performance-chasing is dangerous. They highlight the risks of target-date fund managers pandering to investors, the importance of rebalancing, and the need to stick to long-term allocation plans based on risk tolerance, not market trends. Listener questions cover immediate annuities, 529-to-Roth transfer rules, and whether paying an advisor’s 1% fee is worth it compared with DIY investing.

0:04 Recency bias explained and why it drives poor investment decisions

1:05 Stock allocations hitting record levels in 401(k)s across all age groups

2:48 Risk of higher stock exposure for investors in their 60s

3:33 Target-date funds increasing equity exposure and chasing performance

5:00 Example of an investor going from 60/40 to 90% stocks

7:00 Post-2008 shifts: investors moved into bonds when they should’ve been buying stocks

7:26 Importance of rebalancing twice a year to avoid creeping U.S./large-cap overweight

9:00 Why boring diversification still works long-term

11:26 How to check your target-date fund allocation on Morningstar

12:41 Active vs. index target-date funds: Vanguard vs. T. Rowe/Nuveen

14:03 Listener Q: Fixed immediate annuity trade-offs (“wizards of odds”)

17:49 Why insurers win: payout math vs. life expectancy

18:59 Why Don & Tom dislike most annuities but tolerate immediate annuities in some cases

20:52 DIY alternative: 5% bond/CD ladder vs. annuity payout

21:25 What if you get 6%? Extending sustainable income to 23 years

21:37 Listener Q: Rules for rolling 529 funds into a Roth IRA

23:00 Key 529 limits: 15-year account age, 5-year holding period, $35k lifetime cap

23:14 Listener Q: DIY investing vs. hiring an advisor at 1% AUM

24:22 Why a good advisor’s value is about more than returns—taxes, withdrawals, estate planning

25:42 Vanguard’s Advisor Alpha and why behavior coaching adds value

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Tom Cock takes the reins while Don visits family, leading a live call-in show that covers liquidity risks in private investments and university endowments, skepticism over deferred income annuities, housing sale costs, Vanguard ETF gaps, the importance of diversification beyond the S&P 500, and why long-term investing discipline beats reacting to short-term volatility. Callers ask about annuities, real estate commissions, balanced ETFs, 100% stock allocations, and Wellington vs. total market strategies, with Tom stressing global diversification, risk awareness, and building portfolios for real life rather than chasing products or peer pressure.

0:04 Tom hosts solo, Don away visiting his mom

0:51 Liquidity lessons from elite college endowments and alternatives

2:56 Why liquidity matters for retirement and emergencies

6:21 Caller Rich: $2M assets, pension, Social Security, annuity concerns, Tom warns against deferred income annuities

11:46 Caller Will: real estate commissions after lawsuits, Tom says budget ~10% of sale price

15:09 Tom warns about too-good-to-be-true “8% guarantees”

16:26 Caller Catherine: asks why Vanguard lacks a balanced ETF; Tom suggests DIY mix or wait for rollout

21:40 Tom stresses ignoring TikTok “advice” and staying the course; examples of small-cap rebounds

25:31 Global small/value stocks outperform S&P this year—own them all

26:49 Caller Joe: 100% S&P 500 allocation in retirement accounts; Tom warns about concentration, suggests global diversification

32:56 Caller Alan: Wellington Fund vs. more equities; Tom favors index funds and broader global exposure

37:28 Risk quiz, portfolio planning, and building for your own needs vs. peer influence

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Tom Cock hosts this week’s Talking Real Money solo while Don visits his mom. He reflects on Appella Wealth’s annual client event, where clients talked more about travel, grandkids, and weather than money—showing that the firm’s real value is helping people worry less about markets and more about life. Tom takes listener calls covering whether to renew CDs or move into bond funds, the high costs of closed-end muni funds, portfolio planning with Roth IRAs and target-date funds, estate planning with mutual fund capital gains, and frustrations with annuities. Throughout, Tom stresses planning, simplicity, ignoring noise, and putting money in its proper place.

0:04 Don out visiting his mom, Tom hosts solo

0:48 Market news and Appella Wealth annual client event recap

2:36 What clients really talk about: travel, family, weather—not money

3:25 Why clients worry less about markets when planning is in place

5:59 The importance of advisors (or DIY) in managing rebalancing, taxes, RMDs

7:09 Caller Bill (MN): Renew $200k CDs at 4% vs move into bond fund

11:25 Caller Jim (TX): High-fee muni closed-end funds, whether to sell

13:20 Caller Tom (VA): Planning Roth IRA allocations, target-date funds at Fidelity

18:53 Caller Gene (MD): $8M estate, big mutual fund gains, reducing taxes for heirs

28:12 Caller Bernadette (WA): Regrets annuity with USAA, options for moving it

31:18 Tom’s guidance: why annuities disappoint and fiduciary help matters

32:41 How to “put money in its place” if you’re a DIY investor

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Don and Tom revisit their long-standing skepticism of Yieldstreet after CNBC’s investigation reveals major investor losses. They highlight how promises of high returns and low risk almost always end in disaster, connecting this lesson back to their 2022 warnings. The episode underscores the dangers of “magical” investments, the myth of passive income, and why retirement accounts should avoid private assets. Listener questions focus on Roth vs. pre-tax strategy, bracket management, and conversion rules—showing the complexity of tax planning when wealth accumulates.

0:04 Why “too good to be true” investments always fail eventually

1:08 Yieldstreet problems exposed—CNBC investigation findings

2:26 Losses and watch-list numbers from their portfolio

3:48 Investors chasing 20% returns and Adam Neumann connection

5:01 Private investments pitched as “smoother sailing”

6:14 Throwback to 2022 TRM episode warning about Yieldstreet

7:38 False promises of 8% “distributions” and return of capital

9:10 FBI and SEC probes; fees, liquidity issues, and risks

10:33 Why magical investments work… until they don’t

12:22 Don’s “Financial Fysics” rule: only 3 ways to make money

14:24 Private credit in 401(k)s—why Don hates the idea

15:36 Listener Q: Roth conversion strategy before retirement

17:17 Five-year rule confusion and conversion clarifications

18:52 Why splitting Roth and pre-tax can make sense

20:09 Listener Q: Roth vs. pre-tax for high earners in California

22:08 The need for predictive tax planning with large balances

22:26 Wealth requires planning, not winging it

24:12 Wrapping up—Yieldstreet’s lesson and Roth themes

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This question heavy episode of Talking Real Money dives into six listener questions ranging from umbrella insurance and portfolio rebalancing to small-cap value allocation, AI’s role in financial planning, and advisory fees. Don critiques umbrella policies as overpriced peace-of-mind products, gives practical strategies for balancing across multiple accounts, stresses the value of both U.S. and international small-cap value, discusses the disruptive potential of AI in advice (with a cameo from “Kath”), and explains fiduciary fees, taxes, and client experience at a fee-only firm like Appella.

0:04 Big Q&A episode intro and listener reminder about submitting questions

1:14 Listener note on Mr. Bates vs. the Post Office documentary

2:49 Ivan asks about when to buy umbrella insurance

6:23 How to send in questions and live call-in info

6:41 Listener asks about rebalancing across 401k, Roth, taxable, and HSA

10:02 Jeff asks about U.S. vs. international small-cap value ETFs and missing T-shirts

12:34 Mike from Colorado describes using ChatGPT for Roth conversion and withdrawal planning; Don and Kath discuss AI’s impact on financial advice and SEC regulation

20:46 Ed from North Carolina asks about fiduciary fees, IRA penalties, and the new client experience at Appella

23:27 Advisor meeting cadence and availability explained

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Why has the stock market been so persistently resilient despite crises like COVID, wars, and inflation? Don and Tom explore whether the current generation of investors is simply too inexperienced to remember real bear markets—and what that means for the future. They reflect on market history, including the 2000–2009 “lost decade,” and warn against overconfidence and overconcentration in U.S. large caps. The episode covers lessons from diversification, the value of bonds, the illusion of wealth during bull markets, and listener questions about rebalancing strategies, tax-efficient withdrawals, and international fund choices. They wrap up with a hilarious movie segment and a plea to get financial plans in order as fall approaches.

0:04 Why has the market been so resilient for nearly 20 years?

1:01 Buy-the-dip culture vs. true bear market experience

2:20 Recalling the 2007–09 crash and its emotional aftermath

3:15 Younger investors haven’t seen long-term pain—yet

4:07 A history of “new paradigm” optimism before brutal downturns

5:30 Rising 401k balances vs. uncomfortable overconfidence

5:46 Buying the dip… or being the dip?

7:21 The savior during lost decades: diversification

8:45 “Winter is coming”—how to prepare like a Northerner

9:34 The return of bonds and rechecking your allocations

10:20 Hidden risks of U.S. stock concentration

11:14 Take 20%–50% off your portfolio mentally—it’s not all yours

11:44 Listener questions: mic technique and financial reality check

13:24 The movie theater saga: terrible options and funny reviews

17:00 Listener Q: Calendar rebalancing vs. opportunistic rebalancing

18:50 Listener Q: Selling winners vs. minimizing capital gains

20:10 Listener Q: Comparing AVDE, AVNM, and Dimensional ETFs

24:58 Tax-loss harvesting with Avantis and Dimensional

26:24 Amazon’s latest 3%-fresh movie disaster

28:12 Time to get your financial life in order—fall is coming

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