The Rational Reminder Podcast

In our second episode of 2025, Ben, Mark, and Dan continue to work through the listener questions we received in our 2024 AMA. We begin with home country biases and how to continue to grow your money from an already diversified portfolio before comparing the benefits of stock trading strategies and EFT portfolio strategies. Then, we discuss the impact of volatile blockchains on the wider securities market, whether you need to adjust your investment strategy when new tariffs are imposed, the ins and outs of terminal wealth management, the benefits of focusing on a total market index, and the personal finance perspective of renting versus buying in Canada. To end, we explore the best practices for increasing risk exposure, take a closer look at FIRE (financial impendence, retire early), assess investing behavioural biases and misconceptions that still pose a threat to even literate investors, and learn about how the Rational Reminder podcast is changing the lives of our listeners. Key Points From This Episode:   (0:01:59) Whether owning a home affects your home country bias and financial asset portfolio. (0:02:43) The correlation between the economic risks of housing and the local stock market. (0:07:21) How to keep growing your money if you already have a diversified portfolio. (0:14:16) When to split your portfolio, and stock trading strategy versus EFT portfolio strategy. (0:22:20) The impact of Bitcoin and volatile blockchains on the wider securities market. (0:24:46) Adapting your investment strategy after the introduction or increase of trading tariffs.  (0:26:20) Maxing out tax-free savings accounts for non-incorporated high-income professionals. (0:33:22) Switching to a total market index to avoid index funds that overvalue the market. (0:37:48) Renting versus buying in Canada, from a personal finance perspective. (0:42:39) The best practices for increasing risk exposure.  (0:51:19) Unpacking FIRE – financial independence, retire early.  (0:56:05) Balancing allocations between traditional retirement savings vehicles and real estate. (1:00:56) Investing behavioural biases and misconceptions that harm even literate investors.  (1:09:24) Whether bonds actually exist, and everything we’ve changed our minds about in 2024. (1:19:21) Shaping worldviews, on-demand information, and other highlights from your reviews.    Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — [email protected] Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP  Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/  Peter Mladina on LinkedIn — https://www.linkedin.com/in/peter-mladina-177194125/  Benjamin Felix Quote on X — https://x.com/benjaminwfelix/status/1760356591000301739  Robb Engen — https://boomerandecho.com/robb-engen/  Renaissance Technologies — https://www.rentec.com/Home.action?index=true  Long Blockchain Corp — https://cryptohead.io/acquisitions/long-blockchain/  Nick Maggiulli on X — https://x.com/dollarsanddata  Canadian Couch Potato Podcast — https://canadiancouchpotato.com/podcast/  Bitcoin Uncensored — https://www.podchaser.com/podcasts/bitcoin-uncensored-463350   Episode 335 - What About Warren Buffett — https://rationalreminder.ca/podcast/335  Episode 332: Randolph Cohen & Michael Green — https://rationalreminder.ca/podcast/332   Papers From Today’s Episode:    'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice' — https://dx.doi.org/10.2139/ssrn.4590406 ‘Action Bias among Elite Soccer Goalkeepers: The Case of Penalty Kicks’ — https://www.researchgate.net/publication/222676583_Action_Bias_among_Elite_Soccer_Goalkeepers_The_Case_of_Penalty_Kicks

In today’s episode, we unpack how rigorous research translates into actionable strategies for wealth management. Ben and Mark are joined by Peter Mladina, Executive Director of Portfolio Research at Northern Trust Wealth Management and professor at UCLA. With an impressive body of published work and practical innovations like his goals-based asset allocation software, Peter offers a unique perspective on bridging the gap between theory and practice. The conversation delves into foundational topics like asset allocation and factor models, with a special focus on practical applications of research in wealth management. Peter shares insights from his research, including intriguing findings on factor investing and joint tests of market efficiency. From real estate investment trusts to the nuances of the Intertemporal Capital Asset Pricing Model (ICAPM), the discussion covers how these concepts can directly inform financial planning and portfolio construction. Tune in to explore the intersection of academic insight and everyday financial decision-making! Key Points From This Episode:   (0:00:17) Introducing Peter Mladina and his wealth management research. (0:04:00) Theoretical and practical shortcomings of Markowitz's Modern Portfolio Theory (MPT). (0:05:24) How the Capital Asset Pricing Model (CAPM) resolves MPT’s shortcomings, and how the Intertemporal CAPM (ICAPM) resolves the CAPM and MPT’s shortcomings. (0:10:16) Key distinctions between an optimal ICAPM portfolio and an optimal CAPM portfolio. (0:15:33) Allocating between liability hedge assets and risky assets, and when it’s sensible for individual investors to try to fully hedge consumption liabilities. (0:20:14) The role of Monte Carlo simulation and human capital in building ICAPM portfolios. (0:24:15) Steps for practitioners starting with ICAPM and how to advise their clients. (0:37:18) Insights from Peter’s papers on factor models: why common risk factors should explain returns across most asset classes. (0:40:11) The value of looking at asset classes through a factor lens. (0:41:54) Main factors Peter uses in his research and observations on the zoo of factors. (0:46:23) Takeaways from Peter’s paper on real estate (and why he doesn’t like it that much). (0:56:45) Unpacking hedge fund returns and factor models and Yale’s endowment performance. (01:02:44) Peter’s research on traded portfolios and jointly testing factor models and manager performance. (01:07:14) How Peter defines success, both professionally and personally.   Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — [email protected] Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP Peter Mladina on LinkedIn — https://www.linkedin.com/in/peter-mladina-177194125/ Peter Mladina on SSRN — https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=890472 Northern Trust — https://www.northerntrust.com/ Episode 169: John Cochrane — https://rationalreminder.ca/podcast/169   Papers From Today’s Episode:  ‘Real Estate Betas and the Implications for Asset Allocation’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3134732 ‘An ICAPM Framework for Asset Allocation’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4319731 ‘An ICAPM for Goals-Based Investing’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4943241 'Portfolios for Long-Term Investors' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3790823 ‘Yale's Endowment Returns: Manager Skill or Risk Exposure?’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2959074

As the year draws to a close, the Rational Reminder Podcast team delivers an engaging year-end special with a unique twist. Rather than curating clips from previous episodes, Ben Felix, Dan Bortolotti, and Mark McGrath dive into an AMA-style episode, answering listener-submitted questions. They share reflections on lessons learned, highlight impactful community discussions, and provide thoughtful takes on investing strategies, personal growth, and financial planning. They discuss their evolving views on human capital integration, portfolio diversification, and the importance of behavioural finance in long-term planning. They also revisit key themes from earlier episodes and offer heartfelt thank-yous to their team and audience for a remarkable year. Join us for a mix of practical insights, entertaining banter, and a glimpse into what’s ahead for the Rational Reminder Podcast. Don’t miss this memorable year-end wrap-up! Key Points From This Episode:   (0:00:00) Episode format and a thank you to the PWL Capital team, producers, and audience. (0:05:14) Influential community discussions and their insights on efficient ETF design. (0:10:14) Hear the reason behind Ben's decision to shave his head for so long. (0:13:51) How to integrate human capital into useful financial planning and strategy. (0:19:33) They share their thoughts on the evolving definition of success in life and work. (0:23:33) Their top finance and investment book recommendations for retail investors. (0:28:50) Uncover the nuances of assessing a value premium within an ETF. (0:30:46) How real-life events shaped their approach to providing guidance and financial advice. (0:37:18) Return stacking and a comparison of Dimensional's and Avantis' vector portfolios. (0:41:05) Risks of bonds, bills, and credit and why past returns do not guarantee future results. (0:48:27) Explore the complexities of tax-efficient ETFs and Thrift Savings Plan (TSP) options. (0:56:50) Balancing long-term investment assumptions with short-term market dynamics. (1:03:23) We debate the U.S. market's valuation and the implications for asset allocation. (1:10:15) Hard financial lessons from Ben, Mark, and Dan's investment journeys.  (1:16:29) Unpack the pros and cons of life insurance, infinite banking, and whole life insurance. (1:28:35) Aftershow: reviews, Marks's beard, a final thank you, and more.   Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — [email protected] Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/ Canadian Couch Potato — https://canadiancouchpotato.com/ The Podcast Consultant — https://thepodcastconsultant.com/ Morgan Housel — https://www.morganhousel.com Dimensional Fund Advisors — https://dimensional.com/ Avantis — https://avantisfi.com/ Dan Solin — https://danielsolin.com/ Global X — https://globalxetfs.com/ Episode 138: Factor Investing in Fixed Income — https://rationalreminder.ca/podcast/138 Episode 163: Dave Plecha — https://rationalreminder.ca/podcast/163 Episode 198: Gerard O’Reilly — https://rationalreminder.ca/podcast/198 Episode 316: Andrew Chen — https://rationalreminder.ca/podcast/316 Episode 332: Randolph Cohen & Michael Green — https://rationalreminder.ca/podcast/332   Books From Today’s Episode:   Are You a Stock or a Bond? — https://amazon.com/Are-You-Stock-Bond-Financial/dp/0133115291 Reboot Your Portfolio — https://amazon.com/Reboot-Your-Portfolio-Successful-Investing-ebook/dp/B09P4G9LR7 Wealthier — https://amazon.com/Wealthier-Investing-Field-Guide-Millennials-ebook/dp/B0CX2VD1CW The Psychology of Money — https://amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681 Thinking, Fast and Slow — https://amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555 A Random Walk Down Wall Street — https://amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338/ Winning the Loser's Game — https://amazon.com/Winning-Losers-Game-Strategies-Successful/dp/1264258461/ Wealth Planning Strategies for Canadians 2024 — https://amazon.ca/Wealth-Planning-Strategies-Canadians-2024/dp/166871504X Becoming Your Own Banker — https://amazon.com/Becoming-Your-Own-Banker-Infinite/dp/B001NZO1DS   —    Papers From Today’s Episode:    'Who Are the Value and Growth Investors?' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12473 'Portfolios for Long-Term Investors' — https://academic.oup.com/rof/article/26/1/1/6484661 'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice' — https://dx.doi.org/10.2139/ssrn.4590406

What shapes investor beliefs and behaviours? Steve Utkus, a leading expert in investor behaviour and former Global Head of Investor and Retirement Research at Vanguard, brings decades of groundbreaking insights to this episode. Drawing on exclusive access to Vanguard’s anonymized client data and investor surveys, Steve uncovers the intricate links between what people believe and how they invest. In the first half, he reveals surprising findings from his research into investor beliefs and portfolio decisions. The second half dives into the impact of financial advisors, both human and robotic, on improving investor outcomes. Steve’s reflections, enriched by years of collaboration with academic leaders and personal conversations with Vanguard founder Jack Bogle, offer a rare window into the world of data-driven financial research. Join us today for this fascinating conversation as we unpack fresh perspectives on investor behaviour and the evolving role of financial advice! Key Points From This Episode:   (0:00:20) The importance of understanding investor belief, Steve’s unique approach to studying it, and the benefits of using survey data. (0:08:37) Understanding the effects of individual beliefs on portfolio equity shares. (0:13:40) How equity sensitivity varies with things like trading frequency and how observed sensitivity compares with predictions of an asset pricing model. (0:17:27) The variation of beliefs across different groups and the strong effect of being a pessimist, optimist, or having a middle-of-the-road perspective. (0:21:29) Investor cash flow expectations, how it affects stock return expectations, and how it aligns with models of equilibrium. (0:24:35) The impact of stock market disaster expectations on future stock returns and the effect of COVID-19 on investor expectations. (0:33:37) ESG investing motives, portfolio impact, and the role of financial returns. (0:38:35) Unpacking the impact of robo-advisors on previously DIY investors and who benefits. (0:45:21) Pros and cons of human financial advisors: the needs they satisfy over robo-advisors. (0:53:12) How unadvised investors' needs differ from those who get financial advice. (0:54:04) What determines how much value investors place on financial advice and how they think about the trade-offs between fees and the value of advice. (01:00:00) Reasons traditionally-advised people give for not switching to robo-advising. (01:03:15) Having a relationship with a good advisor: how it impacts investor behaviour through poor market performance periods, and the importance of frequent quality communication. (01:13:07) The key attributes of a high-retention advisor and what they should be focusing on. (01:19:02) Success, retirement, timing, and knowing when to leave, according to Steve.   Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — [email protected] Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP Steve Utkus on LinkedIn — https://www.linkedin.com/in/steveutkus/ Episode 278: Juhani Linnainmaa — https://rationalreminder.ca/podcast/278   Books From Today’s Episode: Bogle on Mutual Funds — https://www.amazon.com/Bogle-Mutual-Funds-Perspectives-Intelligent/dp/111908833X   Papers From Today’s Episode:  ‘Political Cycles and Stock Returns’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2920401 Scott Cederburg Paper — ‘The Diversification and Welfare Effects of Robo-advising’ — https://www.sciencedirect.com/science/article/abs/pii/S0304405X24000928 ‘Who Benefits from Robo-advising? Evidence from Machine Learning’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3552671 ‘Human Financial Advice in the Age of Automation’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4301514 ‘The Misguided Beliefs of Financial Advisors’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3101426