MI238: A Guide to a Winning Investment Strategy w/ Larry Swedroe
Rebecca Hotsko chats with Larry Swedroe. In this episode, they discuss Larry’s book “The Only Guide to a Winning Investment Strategy You’ll Ever Need”, why passive investing and diversification is key to a “Winning Investing Strategy”, why active strategies such as active management, stock picking and market timing are “losing strategies”, the shocking percentage of stocks that actually outperform the market, do markets value stocks correctly, why Warren Buffett’s outperformance can be explained by factors, how investors can improve their long run returns through factor investing, the 5 rules factors must meet to invest in them, how long you have to hold these investments to earn the expected premium, why all factor ETFs are not created equal and which are best to invest in, and so much more! Larry Swedroe is head of financial and economic research office for Buckingham Wealth Partners, a Registered Investment Advisor firm in St. Louis, Mo. Previously, Larry was vice chairman of Prudential Home Mortgage. Larry holds an MBA in finance and investment from NYU, and a bachelor’s degree in finance from Baruch College.To help inform investors about the passive investment approach, he was among the first authors to publish a book that explained passive investing in layman’s terms — The Only Guide to a Winning Investment Strategy You'll Ever Need (1998 and 2005). He has also authored over 18 more books. He also writes for AdvisorPerspectives.com, AlphaArchitect.com, and TheEvidenceBasedInvestor.com.
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Show Notes
IN THIS EPISODE, YOU’LL LEARN:
- 06:00 - The key to a winning investment strategy.
- 12:02 - What percentage of stocks actually outperform the market?
- 14:08 - Why active strategies such as active management, stock picking and market timing are “losing strategies”?
- 24:01 - Do markets value stocks correctly?
- 28:09 - Disentangling market efficiency with the concept of current valuation.
- 33:54 - How Warren Buffett’s outperformance can be explained by factors.
- 38:45 - How investors can improve their long run returns through factor investing.
- 39:12 - The 5 rules factors must meet to invest in them.
- 60:12 - Larry’s guide on how to think about allocating your portfolio between investing in US equities vs International equities vs Emerging Market equities.
- 67:18 - Why all factor ETFs are not created equal and which are best to invest in?
- 67:18 - The 3 characteristics to look for when comparing factor ETFs.
- 01:10:18 - How long you have to hold these investments to earn the expected premium?
- And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- Check out Larry’s Book: The Only Guide to a Winning Investment Strategy You'll Ever Need.
- Check out Larry’s Book: Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals.
- Check out Larry’s Book: Investment Mistakes Even Smart Investors Make and How to Avoid Them.
- Check out Larry’s Book: Your Complete Guide To Factor-Based Investing.
- Check out Larry’s Book: The Incredible Shrinking Alpha: How to be a successful investor without picking winners.
- Check out: Buckingham Wealth Partners.
- Check out Larry’s writings: Alpha Architect.
- Related Episode: High Returns From Low Risk Investing w/ Pim Van Vliet - MI221.
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