The Long View

Our guest on this week’s episode of The Long View podcast is nationally renowned retirement researcher Dr. Michael Finke. Michael is Professor of Wealth Management and Frank M. Engle Distinguished Chair in Economic Security at The American College of Financial Services. He joined the College in June 2016 having served since 2006 as a professor and PhD coordinator in the department of personal financial planning at Texas Tech University. From 1999 through 2006, he served as the Director of Graduate Studies at the University of Missouri. Michael has published more than 50 peer review articles with a focus on the value of financial advice, financial planning regulation, investments and individual investor behavior. He was named to the 2012 Investment Advisor IA 25 list and the 2013 and 2014 Investment News Power 20. His research conducted with Wade Pfau, questioning the 4% rule was published in the Journal of Financial Planning and won the 2014 Montgomery-Warschauer award for the most influential article in the publication. He had previously won the award with Thomas Langdon in 2013. He was also selected to present his research on financial literacy and aging at the 2015 MIT Center for Finance and Policy Conference.BackgroundMichael Finke, PhD, CFP bio Finke CV 2013 Investment Advisor IA 25 profile 2013 Investment news Power 20 profileMontgomery-Warshauer AwardWithdrawal Rates“The 4% Rule is Not Safe in a Low-Yield World” by Michael Finke, Ph.D., CFP; Wade D. Pfau Ph.D., CFP; David M. Blanchett CFP, CFA; Journal of Financial Planning; June 2013“Determining Withdrawal Rates Using Historical Data” by William ​Bengen; Journal of Financial Planning; October 1994 “Low Bond Yields and Safe Portfolio Withdrawal Rates” by David Blanchett, CFP, CFA; Michael Finke, Ph.D., CFP, and Wade Pfau, Ph.D., CFP; Morningstar Investment Management; January 2013“Reduce Retirement Costs with Deferred Income Annuities Purchased before Retirement” by Michael Finke, Ph.D., CFP and Wade Pfau, Ph.D., CFP; Journal of Financial Planning; July 2015 “Why Advisors Should Use Deferred-Income Annuities” by Michael Finke, Ph.D., CFP; Advisor Perspectives; November 2015“Retirement Income for Life; Here’s a New Way to Get It” by Michael Finke, Ph.D., CFP; Bottom-line Personal; July 2016“Lifetime Income Solutions as a Qualified Default Investment Alternative (QDIA) Focus on Decumulation and Rollover”; Written Testimony of Michael Finke, Chief Academic Officer, The American College of Financial Services; 2018 ERISA Advisory Council, August 2018 Health and Cognitive Decline“Old Age and the Decline in Financial Literacy” presented by Michael Finke at the MIT Center for Finance & Policy; September 2015 “Health and Retirement Study”; National Institute on Aging, Social Security Administration; University of Michigan’s Institute for Social Research “Managing Long-term Care Spending Risks in Retirement” by Michael Finke Ph.D., CFP and Wade Pfau Ph.D., CFP; 2017 “Old Age and the Decline in Financial Literacy” by Michael Finke, Ph.D., CFP, John Howe, Sandra Huston; Management Science; August 2011 “Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations” by Hannes Schwandt; American Economic Journal; October 2018>Retiree Spending“Spending, Relationship Quality, and Life Satisfaction in Retirement” by Michael Finke, Nhat Ho, Sandra J. Huston; 2018 Academic Research Colloquium for Financial Planning & Related Disciplines; September 2017 “Spending in Retirement: Determining the Consumption Gap” by Chris Browning, Ph.D., Tao Guo, Ph.D., Yuanshan Cheng, and Michael Finke, Ph.D., CFP; Journal of Financial Planning “Estimating the True Cost of Retirement” by David Blanchett, CFP, CFA; Morningstar Investment Management; 2013Asset Allocation in Retirement“An Old Friend: The Stock Market's Shiller P/E” by Cliff Asness; AQR; November 2012 Daily Treasury U.S. Real Yield Curve Rates; U.S. Department of the Treasury “Reducing Retirement Income Risk with a Rising Equity Glide-Path” by Wade Pfau and Michael Kitces; SSRN; September 2013 “The Effect of Advanced Age and Equity Value on Risk Preferences” by David Blanchett, Michael Finke, and Michael Guillemette; Journal of Behavioral Finance; January 2018 Equity risk premium data; website of professor Aswath Damodaran; Stern School of Business at New York University Other“The Impact of the Broker-Dealer Fiduciary Standard on Financial Advice” by Michael Finke, Ph.D., CFP, and Thomas P. Langdon, J.D., LL.M., CFP, CFA; Journal of Financial Planning; July 2012 Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest today on the podcast is Judith Ward, senior financial planner and a vice president of T. Rowe Associates. In her role at T. Rowe, Ward provides guidance on personal finance and retirement-related issues and is responsible for developing a broad range of financial-planning products and services. Additionally, she provides T. Rowe Price perspectives to individuals, institutions, and the media and contributes to T. Rowe Price publications. She has been with T. Rowe Price since 1983 and is a CFP certificant. BackgroundJudith Ward bio Related LinksPaying for College 2019 Parents, Kids & Money Survey How Much Cash Should You Have on Hand? Are Your Retirement Savings on Track? Retirement Savings Guidelines Aiming for a 15% Savings Goal Retirement Savings And Spending 4: Behaviors And Attitudes Toward Retirement T. Rowe Price Retirement Target-Date Fund Series Report Evaluating Roth and Pretax Retirement Savings Options Roth or Traditional IRA: Which Should You Choose? Five Ways to Avoid Drowning in Student Loan Debt 4 Reasons to Save for Retirement in a Taxable Account Using Health Savings Accounts Wisely Delaying Retirement But Not Your Retirement Dreams Retiring in a Volatile Market Dismal Decade Offers Cautionary Lessons for Retirees Should Your Withdrawals Mirror Your RMDs? 5 Great Uses for Your Required Minimum Distribution Helping Your Clients Decide When to Take Social Security Benefits Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest this week is David Blanchett, head of retirement research for Morningstar Investment Management. In his role at Morningstar, Blanchett works to enhance the Investment Management group's consulting and investment services and conducts research primarily in the areas of financial planning, tax planning, annuities, and retirement. He's also adjunct professor of wealth management at The American College of Financial Services.Blanchett's research has been published in a variety of academic and industry journals, such as the Financial Analysts Journal, the Journal of Financial Planning, The Journal of Portfolio Management, The Journal of Retirement, and The Journal of Wealth Management. His research won the Journal of Financial Planning's 2007 Financial Frontiers Award, the Retirement Income Industry Association's 2012 Thought Leadership Award, the Journal of Financial Planning's 2014 and 2015 Montgomery-Warschauer Awards, and the Financial Analysts Journal's 2015 Graham & Dodd Scroll Award.BackgroundDavid Blanchett's bioDavid Blanchett's research archiveQuantifying the Value of AdviceAlpha, Beta, and Now ... GammaThe Value of a Gamma-Efficient PortfolioVanguard Advisor's AlphaCapital Sigma: The Advisor AdvantageReducing Wealth Volatility: The Value of Financial Advice as Measured by ZetaRetirementAnnuities are Likely Coming to Your 401(k). Should You Use Them?A Safe Harbor for Annuities Could Help Retirement SaversSave More Today: Improving Retirement Savings Rates With Carrots, Advice, and NudgesNudge, by Richard Thaler and Cass SunsteinBehavioral Nudges for Goals-Based Financial PlanningYou Can't Fix What You Can't Measure, Aron Szapiro on The Long View podcastI Don't Think the System Needs Nudges. I Think the System Needs Dynamite, William Bernstein on The Long View podcastMan Bites Dog! Congress Is Writing Retirement Legislation!Retiree Survey: Nearly All Say They Are Happy Though Many Are Financially InsecureEstimating the True Cost of RetirementExploring the Retirement Consumption Puzzle75 Must-Know Statistics About Long-Term Care: 2018 EditionThe 4% Rule Is Not Safe in a Low-Yield WorldSimple Formulas to Implement Complex Withdrawal StrategiesReducing Retirement Risk With a Rising Equity Glide-PathRevisiting the Optimal Distribution Glide PathAnnuitized Income and Optimal Asset AllocationShould Annuities Be Purchased From Tax-Sheltered Assets?The Home as a Risky AssetCareful With That Company StockAbout the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver.About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas.To Share Feedback or a Guest Idea: Write us at [email protected](Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decisions.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest this week is Dan Ivascyn. Dan is group chief investment officer of PIMCO, where he leads the firm's income, credit hedge fund, and mortgage opportunistic strategies and sits on its executive and investment committees. Dan is perhaps best known as the longtime manager of the PIMCO Income Fund, where he's produced one of the best records of any bond manager since taking the helm in 2007. In 2013, Morningstar named Dan our Fixed Income Manager of the Year. Dan has been in the investment business for nearly three decades. He joined PIMCO in 1998, following stints at Bear Stearns, T. Rowe Price, and Fidelity Investments. Related links: Dan Ivascyn bio PIMCO Income Fund 2013 Fund Manager of the Year Award PIMCO Secular Outlook Income Fund Update: “Positioning for the Long Term” Income Fund Update: “Favoring a Responsible Approach Over Yield Chasing” Bloomberg: “The Unstoppable Surge in Negative Yields Reaches $17 Trillion” Residential Mortgage-backed Security Alfred Murata bio Joshua Anderson bio “PIMCO in the post-Gross Era” by Eric Jacobson, Morningstar Richard Thaler bio Bill Gross bio About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at [email protected] (Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decisions.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on the podcast today is Allan Roth, one of the pre-eminent hourly financial advisors in the United States. After a career in corporate finance and as a consultant for McKinsey and Company, Roth started the holistic financial advisory firm Wealth Logic in 2003. Wealth Logic focuses on financial planning and ultra-low-cost simplified investing; his firm's motto is "Dare to be Dull." In addition to working directly with clients, Roth is a prolific writer: He's the author of How a Second Grader Beats Wall Street, which was published in 2009 with the second edition in 2011, and he's also a regular contributor to Financial Planning magazine, Advisor Perspectives, ETF.com, and AARP. Background Information • Allan Roth bio • How a Second Grader Beats Wall Street • Allan Roth's archive for Financial Planning • Allan Roth’s archive for Advisor Perspectives • Allan Roth's archive for ETF.com • Allan Roth's blog on AARP.org Advice Business/Choosing an Advisor • "Save $52,000 on Financial Advice," by William Baldwin (Forbes, May 10, 2016) • Vanguard Personal Advisor Services • "The CFP Board 'Inexcusably' Protects Certificants," by Allan Roth (Financial Planning, Aug. 2, 2019) • "Does the CFP Board Choose Advertising Over Enforcement?" by Allan Roth (Financial Planning, Sept. 24, 2018) • "Looking for a Financial Planner? The Go-To Website Often Omits Red Flags," by Jason Zweig and Andrea Fuller (The Wall Street Journal, July 30, 2019) • "CFP Board to Create Tax Force to 'Strengthen and Modernize' Enforcement," by Brian Anderson (401(k) Specialist, July 31, 2019) • "CFP Board Responds to The Wall Street Journal" (cfp.net, July 29, 2019) • "How to Choose a Financial Planner," by Allan Roth (AARP Magazine) • Finra BrokerCheck Asset Allocation • "William Bernstein: If You've Won the Game, Stop Playing" (The Long View podcast, May 7, 2019) •"How to Set Your Asset Allocation," by Allan Roth (The Wall Street Journal, Dec. 2, 2016) • "The Risk of Taking a Risk-Profile Questionnaire," by Allan Roth (CBS News.com, Aug. 21, 2009) • "Financial Advisor Exposes His Own Portfolio," by Allan Roth (AARP.org, June 15, 2015) • "Mind the Gap 2019" by Russ Kinnel (Morningstar.com, Aug. 15, 2019) Investment Selection and Portfolio Management • "Why CDs Can Still Be Better Than Bonds by Allan Roth," by Allan Roth (CBS News.com, Aug. 20, 2013) • "Municipal Bonds and the Industry's Dirty Little Secret," by Allan Roth (CBSNews.com, June 20, 2010) • "4 Reasons Not to Load Up on Muni Bonds," by Allan Roth (aarp.org, July 14, 2015) • "At Last, a Tool Muni Investors Sorely Needed," by Allan Roth (CBSNews.com, July 8, 2014) • Municipal Bond Price Discovery Tool • "A Seer on Banks Raises a Furor on Bonds," by Nelson D. Schwartz (New York Times, Feb. 10, 2011) • "Low-Risk Inflation Protection from Uncle Sam," by Allan Roth (aarp.org, Feb. 24, 2017) •"When Will Smart Beta Be Smart?" by Allan Roth (ETF.com, July 9, 2019) • "Boosting Returns with Rebalancing" by Allan Roth (ETF.com, March 19, 2018) • "Give Due Care to Your Cost Basis Elections," by Christine Benz (Morningstar.com, Feb. 27, 2013) • "Advanced Strategies for Investment Taxation" by Allan Roth (Advisor Perspectives, May 6, 2019) • Smart Beta (Research Affiliates) • "How Can Smart Beta Go Horribly Wrong" by Rob Arnott, Noah Bech, Vitali Kalesnik, John West (Research Affiliates, Feb. 2016) • "The Arithmetic of Active Management," by William Sharpe (Financial Analysts Journal, January-February 1991) • "Fidelity Zero vs. Vanguard: Which Index Fund Is Better?" by Allan Roth (Financial Planning, Aug. 14, 2018) • "At Vanguard, Customer Complaints Rise Along with Assets," by John Waggoner, (InvestmentNews, Feb. 16, 2017) Retirement Planning • "Is the 4% Rule Still Safe for Retirement Planning?" by Allan Roth (Financial Planning, May 8, 2019) • “Estimating the True Cost of Retirement” by David Blanchett (Retirement Insight and Trends, June 30, 2015) • "Why So Critical of Annuities?" by Allan Roth (CBSNews.com, Sept. 17, 2009) • "My 3 Most-Often Recommended Annuities," by Allan Roth, aarp.org, Dec. 20, 2016 • "Reducing Retirement Risk with a Rising Equity Glide Path," by Michael E. Kitces and Wade D. Pfau (Journal of Financial Planning) Influences • Prospect Theory • Predictably Irrational by Dan Ariely • "What I, and Millions of Others, Owe Jack Bogle" by Allan Roth (Financial Planning, Jan. 16, 2019) • A Random Walk Down Wall Street by Burton Malkiel • Bogle on Mutual Funds by John C. Bogle About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com

Our guest on the podcast this week is Rupal Bhansali, Ariel's chief investment officer of international and global equities. She manages Ariel International and Ariel Global and also oversees Ariel's global-equity research team. Bhansali has nearly three decades' worth of experience. Prior to joining Ariel, she managed international-equity portfolios and served in leadership positions at MacKay Shields and Oppenheimer Capital. She also has experience in the hedge fund world, including a stint at Soros Fund Management. Background Information Rupal Bhansali bio Morningstar Analyst Report for Ariel International Morningstar Analyst Report for Ariel Global "10 Questions With Rupal Bhansali" Investment philosophy Approach to global markets Approach to risk management Non-Consensus Investing: Being Right When Everyone Else Is Wrong Other Topics Referenced in This Episode "Banking Collapse of 2008: Three Weeks That Changed the World" Quantitative easing definition Regulation Fair Disclosure Channel check definition Government Pension Investment Fund Sovereign wealth fund definition "A $30 Billion Exodus Puts Hedge Funds for the Masses to the Test" Investors Still Pouring Money Into Passive Funds **About the Podcast:** *The Long View* is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at [email protected] (Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decisions.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on the podcast today is Rob Arnott. Arnott is partner and chairman of the board of Research Affiliates, a firm he established in 2002, following stints at First Quadrant and Salomon Brothers. He also runs several prominent mutual funds, including PIMCO All Asset. In addition to these duties, Arnott is an accomplished thought leader, having published more than 100 articles in professional journals. Among other plaudits for his work, he has received seven Graham and Dodd Scrolls, awarded by the CFA Institute to the top financial analyst journal articles of the year. An innovator, Arnott popularized the concept of fundamental indexation, which some refer to as smart beta. Background Information Rob Arnott bio Research Affiliates website Research Affiliates smart-beta interactive tool Research Affiliates asset-allocation interactive tool Financial Analysts Journal website PIMCO All Asset PAAIX "Fundamental Indexation," by Robert D. Arnott, Jason Hsu, and Philip Moore (2005, Financial Analysts Journal) Related Links Research Affiliates Forecasts Value strategy High-dividend strategy Emerging-markets equity Low-volatility strategy Research Affiliates Research "Are Valuations Now Irrelevant?" by Rob Arnott (2019 Research Affiliates Advisor Symposium) "If Factor Returns are Predictable, Why Is There an Investor Return Gap?" by Jason Hsu (November 2015, Research Affiliates) "Buy High and Sell Low With Index Funds!" by Rob Arnott, Vitali Kalesnik, and Lillian Wu (June 2018, Research Affiliates) "Too Big to Succeed," by Rob Arnott (June 2010, Research Affiliates) "The Incredible Shrinking Factor Return," by Rob Arnott, Vitali Kalesnik, and Lillian Wu (April 2017, Research Affiliates) "How Can 'Smart Beta' Go Terribly Wrong?" by Rob Arnott, Noah Beck, Vitali Kalesnik, and John West (February 2016, Research Affiliates) "To Win With 'Smart Beta' Ask if the Price Is Right," by Rob Arnott, Noah Beck, and Vitali Kalesnik (June 2016, Research Affiliates) "Rob Arnott: 'I Want the Quant Community to Get Its Act Together," by Alex Steger (Feb. 28, 2019, Citywire) "What Risk Matters? A Call for Papers!" by Rob Arnott (September/October 2003, Financial Analysts Journal) "Who Is on the Other Side of the Trade?" by Jason Hsu (December 2013, Research Affiliates) Other Research Referenced "Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk," by William F. Sharpe (September 1964, The Journal of Finance) "Mind the Gap 2019," by Russel Kinnel (Aug. 15, 2019, Morningstar) "Alpha and the Paradox of Skill," by Michael J. Mauboussin and Dan Callahan (July 15, 2013, Credit Suisse) About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at [email protected] (Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decisions.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on the podcast today is Mark Miller, a nationally recognized expert on trends in retirement and aging. Miller's work considers retirement holistically, including healthcare and Medicare, Social Security, retirement investing, midlife careers, and housing. Miller is a regular contributor to Morningstar.com, and he also writes about retirement matters for Reuters, The New York Times, and WealthManagement.com. In addition, Miller has written several books, including The Hard Times Guide to Retirement Security and his most recent book, Jolt: Stories of Trauma and Transformation. Background Information Mark Miller bio RetirementRevised newsletter RetirementRevised podcast Books by Mark Miller RetirementRevised Guides Mark Miller archive on Morningstar.com Related Links State of Retirement Preparedness in U.S. U.S. Retirement Savings: Statistics and Facts (Statista) "How Much Income Do Retirees Actually Have? Evaluating the Evidence from Five National Datasets," by Alicia H. Munnell and Geoffrey T. Sanzenbacher (November 2018, Center for Retirement Research working paper) "How Retirement Readiness Varies by Gender and Family Status: A Retirement Savings Shortfall Assessment of Gen Xers," by Jack VanDerhei (Jan. 17, 2019, Employee Benefit Research Institute) "Retirement Savings Shortfalls: Evidence from EBRI's 2019 Retirement Security Projection Model," by Jack VanDerhei (March 7, 2019, EBRI) Perspectives on Retirement Readiness in the United States (May 13, 2016, SEC's Office of the Investor Advocate) 2019 Retirement Confidence Survey (EBRI) "Is There Really a Retirement Crisis?," Aron Szapiro and Christine Benz (May 7, 2019, Morningstar.com) "Retirement Prospects for the Millennials: What Is the Early Prognosis?," by Richard W. Johnson, Karen E. Smith, Damir Cosic, and Claire Xiaozhi Wang (November 2017, Center for Retirement Research working paper) "Retiring Earlier Than Planned: What Matters Most?," by Alicia H. Munnell, Matthew S. Rutledge, and Geoffrey T. Sanzenbacher (February 2019, Center for Retirement Research working paper) The State of Work for Older Adults "Working Longer: Older Americans' Attitudes on Work and Retirement," by Jennifer Benz, Matt Sedensky, Trevor Tompson, and Jennifer Agiesta (2013, The Associated Press-NORC Center for Public Affairs Research) "Surprising Reasons Boomers Are Working Longer," by Martha Deevy (Dec. 26, 2012, NextAvenue) "More Older Americans Are Working, and Working More, Than They Used To," by Drew DeSilver (June 20, 2016, Pew Research Fact Tank) "Why Working Till Whenever Is a Risky Retirement Strategy," by Mark Miller (May 16, 2019, The New York Times) "Should Working Longer Be a Part of Your Retirement Plan?" Mark Miller and Christine Benz (July 30, 2019, Morningstar.com) "Finding the Bright Side in a Graying U.S. Workforce," by Mark Miller (Jan. 17, 2019, RetirementRevised) "How Does Delayed Retirement Affect Mortality and Health?," by Alice Zulkarnain and Matthew S. Rutledge (October 2018, Center for Retirement Research working paper) Fixing Retirement at an Individual Level "How to Blend Work and Retirement," by Mark Miller (Sept. 2, 2018, RetirementRevised) "Treat Your Work As a Retirement Asset," by Mark Miller (June 25, 2019, Morningstar.com) "The Uptick in Annuities," by Mark Miller (May 28, 2019, Morningstar.com) "How to Bridge a Retirement Shortfall," by Christine Benz (Jan. 28, 2019, Morningstar.com) "How Life Expectancy Affects Retirement Planning," by Mark Miller (Feb. 19, 2019, Morningstar.com) "Women Need Better Advice, Earlier Planning," by Christopher Robbins (June 17, 2016, Financial Advisor) "How Much Can I Spend in Retirement? A Guide to Investment-Based Retirement Income Strategies," by Wade D. Pfau (June 30, 2018, Retirement Insight and Trends) "Estimating the True Cost of Retirement," by David Blanchett (June 30, 2015, Retirement Insight and Trends) "Inflation-Linked SPIAs Are a Bad Deal," by David Blanchett (May 20, 2019, Advisor Perspectives) Social Security "Is It Time to Raise Social Security's Retirement Age?," by Mark Miller (March 14, 2019, RetirementRevised) Social Security Calculators Social Security Solutions Healthcare for Retirees "Retirement Healthcare Costs: Let's Get Real," by Mark Miller (July 16, 2019, Morningstar.com) "Retirement Healthcare Costs: Strategies for Meeting the Challenge," by Mark Miller (Aug. 6, 2019, Morningstar.com) "5 Key Retiree Healthcare Trends," Mark Miller and Christine Benz (Nov. 12, 2018, Morningstar.com) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on this week's installment of The Long View is noted portfolio manager Bill Nygren. Nygren joined Chicago-based Harris Associates as an analyst in 1983 and later served as the firm's director of research. He has managed Oakmark Select OAKLX since 1996 and Oakmark Fund OAKMX since 2000 and has comanaged Oakmark Global Select OAKWX since 2006. In addition to these duties, Nygren serves as Harris' chief investment officer for U.S. equities. For his investing achievements, Morningstar recognized Nygren as its Domestic-Stock Manager of the Year in 2001, and his funds remain highly rated by Morningstar's manager research analysts. A frequent and insightful commentator on investing and markets, Nygren's shareholder letters are a must-read on the Street and beyond. In this far-ranging conversation, he discusses how his team's competitive edge has evolved, how traditional value metrics won't cut it in today's evolving economy, and the lasting lessons of the financial crisis. Background Information Bill Nygren bio Bill Nygren's Commentary and Shareholder Letters Oakmark's Philosophy and Process Morningstar Analyst Report for Oakmark Fund Morningstar Analyst Report for Oakmark Select Morningstar Analyst Report for Oakmark Global Select "Morningstar Fund Managers of the Year 2001," by Russ Kinnel (Jan. 4, 2002, Morningstar.com) Related Links How Stock-Picking Has Changed and What Defines Value "Value Investors Are Vexed," by Ben Johnson (April 10, 2019, Morningstar.com) "Value Stocks Haven't Traded This Low Since the Dot-Com Bubble," by Justina Lee (July 23, 2019, Bloomberg) Generally Accepted Accounting Principles (GAAP) Shiller P/E Ratio Portfolio/Risk Management "Do Concentrated Funds Outperform?" Alex Bryan and Christine Benz (May 8, 2019, Morningstar.com) "The World Cup and Investing," by Win Murray (July 16, 2018, Oakmark.com) Portfolio and Holdings Oakmark Fund portfolio, June 30, 2019 Oakmark Select portfolio, June 30, 2019 Oakmark Global Select portfolio, June 30, 2019 "Bank of America Plans to Boost Dividend 20%, Increase Pace of Stock Buybacks" (July 17, 2019, Marketwatch) "Famed Value Investor Bill Nygren on His New Stock Picks" (April 25, 2019, CNBC) "Value Investor Bill Nygren Gets Bullish on Tech" (Feb. 25, 2019, CNBC) "Value Investor Bill Nygren Likes Netflix, Saying It Won't Lose Subscribers on Price Hike" (Jan. 15, 2019, CNBC) "Nygren: A Lot of Value Still Out There" (May 28, 2009, Morningstar) About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at [email protected] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on today's podcast is Jonathan Clements, the founder and editor of the website HumbleDollar. Clements has been a prolific and influential writer over his several-decade career. Prior to starting HumbleDollar, he was the longtime money and investing columnist for The Wall Street Journal, where he wrote more than 1,000 columns. After he left The Journal, Clements spent six years heading up investor education at Citi Personal Wealth Management. He has also authored seven investment books and a novel, including the Jonathan Clements Money Guide, How to Think about Money, and From Here to Financial Happiness. Background Information Jonathan Clements bio HumbleDollar Books by Jonathan Clements Related Links Frugality and Setting Financial Goals FIRE Movement Wikipedia entry HumbleDollar's Spending Guide HumbleDollar's Saving Guide "Can Money Buy Happiness?" by Andrew Blackman (Nov. 10, 2014, The Wall Street Journal) The Role of Advisors in Improving Outcomes Michael Kitces on "The Long View" podcast Great Debates on HumbleDollar's site "Hire an Advisor?" by Jonathan Clements (HumbleDollar) Bogleheads.org Whether Investors Undermine Their Results With Bad Behavior DALBAR's Quantitative Analysis of Investor Behavior "Taking Us for Fools," by Jonathan Clements (Dec. 1, 2018, HumbleDollar) "Maybe Investors Aren't Stupid After All," by Jonathan Clements (March 31, 2004, The Wall Street Journal) "Just How Dumb Are Investors?" by Jason Zweig (May 9, 2014, The Wall Street Journal) "A Warning to the Advisory Profession: DALBAR's Math is Wrong" by Wade D. Pfau (May 6, 2017, Advisor Perspectives) "Mind the Gap 2018" by Russel Kinnel (Aug. 21, 2018, Morningstar.com) Retirement Decumulation "Reducing Retirement Risk with a Rising Equity Glide Path" by Wade D. Pfau and Michael Kitces (Journal of Financial Planning) "Initial Conditions and Optimal Retirement Glide Paths" by David M. Blanchett (Journal of Financial Planning) "Cut Stocks or Add to Them? A Key Decision for Your Retirement Plan" by Christine Benz (July 25, 2019, Morningstar.com) HumbleDollar's Retirement Guide "Immediate Fixed" (HumbleDollar blog post) Asset Allocation and Investing HumbleDollar's Investing Guide "Our Humble Opinion: Asset Allocation" (HumbleDollar blog post) "Market Portfolio" (HumbleDollar blog post) "Investors Have Fewer Reasons Than Ever for Home Bias" by Ben Johnson (June 7, 2019, Morningstar.com) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guests for the latest installment of "The Long View," Maria Bruno and Joel Dickson, are both veterans of investment behemoth Vanguard. Bruno is the head of U.S. wealth planning research at Vanguard, leading a team responsible for conducting research and analysis on a wide range of retirement, wealth planning, and portfolio construction topics. She also contributes to the oversight of the investment philosophy, methodology, and wealth management strategies supporting Vanguard's advisory products and services. Bruno is a Certified Financial Planner, and she's a fount of wisdom on many subjects, but especially retirement planning. Dickson has worn many hats at Vanguard during his long career there. In his current position as Vanguard's global head of advice methodology, he oversees all investment methodology development for Vanguard's advice programs whose end consumers are individual investors. The transcript for this podcast can be found here. Background Information Maria Bruno bio Joel Dickson bio "The Planner and the Geek" podcast series Vanguard Research and Commentary Archive How Retirement Savers Can Play Catch-Up "It's the 'how much?' But then also how do you actually direct those savings?" (1:30-2:56) "It's such an idiosyncratic or individual sort of consideration from a planning standpoint; there are plenty of people that have little wealth but high income." Whether traditional tax-deferred accounts are automatically better than Roth for people playing catch-up on retirement savings. (2:57-5:53) "It's a little bit simpler when you're younger and accumulating." How basic savings and investing habits, combined with plan defaults, make the accumulation period much simpler than decumulation. (5:54-8:24) 'Off-Label Uses': Ways Supersavers Can Maximize Their Investments Aftertax 401(k): What it is and how heavy savers can take advantage of it. (10:41-12:55) After-Tax 401(k), Bogleheads Wiki entry "Should You Make Aftertax Contributions to Your 401(k)?" Morningstar.com article "Aftertax 401(k) vs. Taxable Account? Evaluating Options for High-Income Savers," Morningstar.com article "Heavy Savers, Meet the Mega-Backdoor Roth," Morningstar.com article Backdoor Roth IRA: How it works, who should consider, and potential pitfalls to be aware of. (12:56-16:34) "IRA Insights: The Benefits of a Backdoor Roth," Vanguard research "Backdoor IRAs: What You Need to Know," Morningstar.com article "There's more and more focus on minimizing income taxes during one's life than there is about avoiding estate taxes." Using a 529 as an additional tax-advantaged savings vehicle. (16:35-21:26) Navigating College Savings episode from The Planner and The Geek podcast Decumulation "How do I meet my goals today but then also make sure that I'm protecting myself down the road?" Why setting spending rates can be so tricky. (21:27-24:26) "Determining Withdrawal Rates Using Historical Data," research paper by William Bengen William Bengen bio "How to Put a Dynamic Retirement Spending Strategy in Place," Vanguard research "Spending Trends Boost Safe Withdrawal Rate for Retirees," Morningstar.com video "The 4 Percent Rule Is Not Safe in a Low-Yield World," research paper by Michael Finke, David Blanchett, and Wade Pfau "We're telling people to, on average, oversave and underspend." Balancing longevity, sequence risk with spending and quality of life. (24:27-28:35) "Is There an Upside to Sequence of Return Risk?" Morningstar.com video Exploring the Retirement Consumption Puzzle, research paper by David Blanchett "At the end of the day you still kind of get to the same end result." How bucket portfolios may not look very different from traditionally allocated retirement portfolios. (28:36-31:30) "The Bucket Approach to Retirement Portfolio Allocation," Morningstar.com article "Retirees could be overexposed to equity risk." Whether retirees aren't derisking their portfolios. (31:31-32:41) "Best Practices for Portfolio Rebalancing," Vanguard research paper "Generations: Key Drivers of Investor Behavior," Vanguard research paper "The rules of thumb just don't work as well." Why managing taxes during retirement is necessarily an individualized process. (32:42-36:24) "Spending from a Portfolio: Implications of Withdrawal Order for Taxable Investors," Vanguard research paper "Here you're actually looking at strategies that could accelerate income taxes." How the post-retirement/pre-RMD years are a prime time to control future tax bills. (36:25-39:41) • "An IRA Conversion Sweet Spot," Morningstar.com video • "Age Is Just a Number: Start Thinking About RMDs Now," Vanguard blog post • "Strategies for Annual Roth Conversions," Vanguard research • "But What If I Don't Want My RMD?," Vanguard research • "What to Do With RMDs You Don't Need," Morningstar.com article Building Portfolios "You have human capital risk at the same time you have investment risk." How investors should think holistically about risk when building their portfolios. (39:42-44:3

Our guest this week on "The Long View" is Sheryl Garrett. Garrett is a legendary figure in financial-planning circles, having pioneered the concept of offering hourly financial-planning guidance. She's founder of the Garrett Planning Network, a national network of hourly, fee-only financial planners that she started in 2000. Garrett has authored, co-authored, or served as technical editor on many books, including Garrett's Guide to Financial Planning, Just Give Me the Answer$, and the Personal Finance Workbook for Dummies. She has worked with the U.S. House Committee on Financial Services regarding predatory lending regulation, financial literacy, and Social Security reform. She has also received numerous awards in the realm of financial planning during her career. Most recently, InvestmentNews named Garrett as its 2019 Icon. Background Information Sheryl Garrett bio Garrett Planning Network Books by Sheryl Garrett Garrett's Guide to Financial Planning: How to Capture the Middle Market and Increase Your Profits by Sheryl Garrett Just Give Me the Answer$: Expert Advisors Address Your Most Pressing Financial Questions by Sheryl Garrett and Marie Swift Personal Finance Workbook for Dummies by Sheryl Garrett U.S. House of Representatives Committee on Financial Services; hearing dated Wednesday, April 20, 2005; testimony of Sheryl Garrett, CFP InvestmentNews Icons and Innovators: Sheryl Garrett Advice Best Practices "How would I want to receive advice?" How Garrett came to build an hourly, fee-only planning practice that eventually spawned a network of advisors. (1:03-3:58) "The industry thought I was nuts." Why Garrett opted for an hourly fee-for-advice model. (3:59-7:53) Advice Models "The issue is bigger between the financial advisor's ears than it is between the client's ears." How to get clients over paying for advice out of pocket. (7:54-14:16) "I see financial planning as a job and I see ongoing investment advice as a different job." How the advice model--and manner of charging fees--should adapt to clients' evolving needs over time. (14:17-22:30) Rick Ferri bio First Ascent Asset Management Subscription-based vs. hourly advice: What's the better model? (22:31-25:51) XY Planning Network Working With Clients Hourly advice is most successful (and cost-effective) when the client participates. (25:52-32:54) Temperament matters: What people should look for in a financial planner or advisor. (32:55-43:12) Garrett Planning Network's "Financial Advisor Interview Questionnaire" The National Association of Personal Financial Advisors (NAPFA) Planning Business "They look at me as their financial advisor." Are hourly financial planners constantly in customer-acquisition mode and might that attract those who are better at sales than planning? (43:13-46:06) Commoditization: Given the popularity of planning and advice, could financial planning go the way of the Chartered Financial Analyst designation? (46:07-48:46) Chartered Financial Analyst designation Certified Financial Planner designation Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on this week's installment of "The Long View" podcast is James Montier. Montier is a member of the asset-allocation team at Grantham, Mayo, Van Otterloo & Co. Before joining GMO in 2009, he was co-head of global strategy at Societe Generale. A prolific and incisive writer, Montier has authored several books, including Behavioural Investing: A Practitioner's Guide to Applying Behavioural Finance; Value Investing: Tools and Techniques for Intelligent Investment; and The Little Book of Behavioral Investing. He's also a regular contributor to GMO's library of white papers and research studies on topics ranging from productivity, strategic asset allocation, contrarianism, and more. In addition to his duties at GMO, Montier is also a visiting fellow at the University of Durham and a fellow of the Royal Society of Arts. Background Grantham, Mayo, Van Otterloo & Co. Behavioural Investing: A Practitioner's Guide to Applying Behavioural Finance by James Montier Value Investing: Tools and Techniques for Intelligent Investment by James Montier The Little Book of Behavioral Investing: How Not to Be Your Own Worst Enemy by James Montier GMO's research library Montier's articles in GMO's research library Montier's Role at GMO "My role is essentially to be difficult, and it turns out I'm quite good at that." Montier describes his role at GMO and how his contributions to the firm are measured. (1:10-3:11) Ben Inker bio Fostering Debate at GMO "We have never had a house view." Why debate and constructive devil's advocacy is welcome at GMO. (3:12-4:31) "Investing is one of those fields where there is almost constant evidence that we are all wrong." How to foster humility and a diversity of views. (4:32-7:38) Debating Jeremy Grantham on mean reversion: Montier gives an example of an issue the team has debated recently--how long it takes for markets to revert to their long-term averages. (7:39-9:36) Jeremy Grantham bio "This Time Seems Very, Very Different" by Jeremy Grantham (GMO Quarterly Letter, 1Q 2017) "The S&P 500: Just Say No" by Matt Kadnar and James Montier (Aug. 15, 2017) Forecasting and Portfolio Construction How the debate over mean reversion informs GMO's asset-class forecasts. (9:37-10:09) GMO 7-Year Asset Class Forecast (May 2019) Corporate concentration and low interest rates: How GMO is reconsidering these variables and their impact on the asset-class forecasts it makes. (10:10-11:38) "The Idolatry of Interest Rates, Part II: Financial Heresy and Potential Utility in an ERP Framework" by James Montier and Ben Inker (Aug. 11, 2015) How GMO incorporates its asset-class forecasts into the multi-asset strategies it manages. (11:39-12:37) GMO Benchmark-Free Allocation III GBMFX The appeal of a "robust" forecast that's meant to help portfolios withstand various potential outcomes. (12:38-14:15) "Our portfolios look a little freakish." Montier explains why GMO is U.S.-stock-phobic and, conversely, why the firm is finding value in alternatives. (14:16-18:04) GMO Benchmark-Free Allocation II Fund's asset allocation Sir John Templeton: "If you want to have a better performance than the crowd, you must do things differently from the crowd." Career risk: Where individual investors hold an edge over institutions. (18:05-18:55) "Career Risk Is Likely to Always Dominate Investing" by Jeremy Grantham (Dec. 24, 2014, Finanz and Wirtschaft) Alternatives Montier defines "alternatives." Different ways of owning standard risks--depression risk, inflation risk, and liquidity. (18:56-21:49) "The General Theory of Employment, Interest, and Money" by John Maynard Keynes Montier presents two examples of alternative strategies that GMO employs--merger arbitrage and put-selling--to own standard risks in different ways. (21:50-25:49) Merger-arbitrage definition Put-selling definition "Is This Purgatory, or Is It Hell?" by Ben Inker (GMO Quarterly Letter, 3Q 2014) "We should size them such that they cannot hurt the overall fund should we get something wrong." How GMO sizes its positions in alternative strategies. (25:50-27:33) GMO Systematic Global Macro Trust Alpha, beta, and decay: How GMO assesses an alternative strategy's vulnerability to being arbitraged away. (27:34-29:57) GMO's Bearish U.S. Equity Forecast "How do I get paid for owning this asset?" Key inputs to GMO's U.S. equity forecast--multiple, margin, yield, and growth. (29:58-32:08) "Back to Basics: Six Questions to Consider Before Investing" by Ben Inker (Nov. 8, 2010) "A behavioral self-defense mechanism." How GMO's approach to forecasting helps to structure its thinking and anchors decision-making. (32:09-34:54) "It's really valuation where we've been most wrong." Where GMO's U.S. equity forecast erred in recent years. (34:55-36:01) "We have to wear that. We have to own it." Montier on steps that GMO has taken to introspect on its forecasting error and how that expresses itself in the way it makes decisions and manages money. (36:02-39:45) Planning A

Our guest today on The Long View podcast is Rick Ferri. Ferri is an hourly fee-only investment consultant at Ferri Investment Solutions; he's also a CFA charterholder. Prior to starting his new firm in April 2019, he was the founder and head of investing at a $1.5 billion advisory firm that specialized in low-fee asset management using index funds and exchange-traded funds. Prior to that, he worked for a brokerage firm, where he was an early adopter of inexpensive index products for client portfolios. Ferri is a Marine Corps officer and retired fighter pilot. Ferri has written several books on low-fee investing, including All About Asset Allocation, The ETF Book, All About Index Funds, and The Power of Passive Investing. He has also authored numerous investment-related articles and research papers, including a research paper on index investing that won S&P Dow Jones Indices' third-annual SPIVA Award. Introduction and Background Rick Ferri's bio Ferri's philosophy Ferri Investment Solutions Ferri's books Ferri's Forbes column "Bogleheads on Investing" podcast hosted by Rick Ferri "Ferri: 3 Keys to a Successful Investment Strategy," Morningstar.com video "The conversation about asset allocation comes later, and the conversation about investments comes after that." Ferri discusses how his definition of value-add has changed over the past 10-15 years. (0:55-3:24) "I've been through the whole gantlet." Transitioning from broker to Registered Investment Advisor. (3:25-5:14) On clients who have needs that go beyond investment management. (5:15-5:56) "You get the work done, you pay for the work." Why Ferri's new advisory practice charges clients by the hour, not by their assets under management. (5:57-9:44) "Rick Ferri, Back in Business, Drops Bomb on AUM Model," ThinkAdvisor article "Move Over 1% Advisor Fee: Change Is Here," Ferri's blog post on Forbes "Advisors talk about how they add value behaviorally; I think a lot of that is created by the advisor and not so much by the client." The role of advisors in managing client behavior. (9:45-11:12) Asset Allocation "Ferri: 3-Fund Portfolio the Simplest Way to Best Return," Morningstar.com video Ferri's Core-4 Portfolios "There are no average investors." How investors of the same age can vary widely in their appetite for equity risk. (11:13-15:03) "Those are the things that are going to add value to a client's portfolio." Focusing on keeping taxes and investment costs down, not trying to play factors. (15:03-18:21) "There seem to be a lot of factor renters, rather than factor owners." Ferri is skeptical that factor investing will outperform in the future. (18:23-20:44) Factor investing defined Dr. Wesley Gray interview on factor investing, "Bogleheads on Investing" podcast "I don't use anything that doesn't have an expected real return." Why Ferri sticks with plain-vanilla asset classes. (20:45-21:56) How to go about making return assumptions for the major asset classes. (21:57-24:14) "It depends on how much money the client has." A total bond market index as a one-stop option for fixed-income exposure. (24:15-27:20) International bonds as a core asset class. (27:21-28:46) "Global Fixed Income: Considerations for U.S. Investors," Vanguard research paper "Six Advisors on Investing in International Bonds," OregonLive article "I don't think they're pivotal." REITs as a direct allocation. (28:47-31:45) "REITs and Your Portfolio," Ferri's Forbes blog post Decumulation "The software doesn't seem to be very good at this." Decumulation is inherently more complicated and customized than accumulation. (31:46-34:19) "There seem to be better ways of doing it than the classic way in which we've been taught." On whether the traditional declining equity glide path makes sense. (34:20-39:28) Indexing and the Legacy of Jack Bogle "It's been around forever." Direct indexing: the wave of the future? (39:29-42:09) "Could Direct Indexing Help Your Portfolio?" Forbes blog post by Simon Moore "I don't see it as big of a threat as other people do." Should investors be worried about concentration in very few ETFs, and do index funds and ETFs own too much of the market? (42:10-44:07) "I was having a real moral dilemma." How influential Jack Bogle was in shaping Ferri's career path. (44:08-46:08) "The Worth of a Man: A Tribute to John C. Bogle," Forbes blog post Ferri's interview with Bogle, "Bogleheads on Investing" podcast "Vanguard Founder Jack Bogle Passes Away," Morningstar.com article Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on this week's episode of the Long View is none other than Josh Brown, CEO of Ritholtz Wealth Management. Brown's story is unique and inspiring. He began his career as a broker but grew disillusioned with the industry's skewed incentives and practices, eventually pursuing a career as an independent Registered Investment Advisor. Along the way, Brown managed to author an acclaimed book, Backstage Wall Street, and build an enormous following around his blog, "The Reformed Broker," as well as his twitter handle, @reformedbroker. Now he oversees Ritholtz's day-to-day operations in addition to his other duties, which include serving as a regular contributor on CNBC, as a member of fintech firm BrightScope's advisory board, and most recently as a technical advisor on the Showtime hedge fund drama Billions. Introduction and Background Ritholtz Wealth Management Josh Brown bio The Reformed Broker Josh Brown @reformedbroker Backstage Wall Street: An Insider’s Guide to Knowing Who to Trust, Who to Run From, and How to Maximize Your Investments by Josh Brown BrightScope Brown's appearance on Showtime's Billions Origin Story "A personal crisis." Josh describes the epiphany he had in leaving the brokerage industry for the advice business after 10 years (1:20-3:41). "It worked immediately." How the Reformed Broker blog was born and led to a chance meeting with Barry Ritholtz, which gave rise to an RIA (3:42-5:21). Barry Ritholtz bio Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz "How I Met Barry" by Josh Brown, The Reformed Broker blog The Advice Business "If they haven’t figured it out by now, they probably don’t want to." Observations on how the advice business has changed (5:22-7:29). "Understanding Mutual Fund Classes" by Finra SEC Regulation Best Interest Definition of a nontraded REIT "Brokerages in name only." Why wirehouse clients aren't necessarily being ill-served by the system (7:30-8:09). Morgan Stanley First Quarter 2019 Earnings Results James P. Gorman, chairman and CEO of Morgan Stanley Lending: The key difference between a fee-based account at a Wall Street wirehouse and a fee-based account at a traditional RIA (8:10-10:34). "The Rise of Rich Man's Subprime" by Josh Brown, Fortune magazine Securities-based lending, explained How to Provide Financial Advice Telling the client "no." The difference between pushing product and offering advice (10:35-12:16). "When Fund Companies Pay to Play, So Do You" by Leslie Norton, Barron's "It's recreation; it's not a necessity." Helping clients to scratch an itch without putting their financial plans at risk (12:17-14:53). "Financial planning is the highest calling within our profession." Ensuring clients get past the firm's public persona and truly buy into its plan and approach (14:54-16:46). An ensemble approach to delivering advice to clients: The anti "eat what you kill." (16:47-18:58). Michael Batnick bio Michael Batnick's "The Irrelevant Investor" blog Ben Carlson bio Ben Carlson's "A Wealth of Common Sense" blog Blair duQuesnay bio Blair duQuesnay's "The Belle Curve" blog "Consider Firing Your Male Broker" by Blair duQuesnay, The New York Times op-ed How to Build an Advice Firm "Barry and I don't spread out a map like Napoleon and start sticking thumb-tacks in it." How Brown thinks about strategically expanding the firm (19:04-20:45). "If somebody comes to us in a rush, it's probably a bad situation, and we don't want anything to do with it." The advisor recruitment and weeding-out process (20:46-24:23). Kris Venne bio Bill Sweet bio Portfolio Construction and Asset Allocation "You're going to lose money. It's gonna happen. There's no way around it." The firm's approach to allocating assets and setting client expectations (24:24-27:33). Tactical asset allocation's role in their process: "We don't believe in investment alpha using tactical." (27:34-29:33) Sequence-of-return risk "What if you had a tactical model that almost never did anything?" How they built their tactical-asset-allocation overlay to help manage client behavior (29:34-33:13). "I hope it underperforms, because most of our clients' money is not invested in tactical." (33:14-35:03) "Every client is different, but their needs are not." Implementing a scalable asset allocation (35:04-37:08). "You want to be wrong in such a way that it's not going to be catastrophic for the end client." How Ritholtz sets capital-markets expectations (37:09-38:41). Managing Client Assets How Ritholtz approaches assets that clients bring in with them: "You've got a human being with their own issues." (38:42-40:58) Mark Tibergien bio "The longer I'm doing this, the more stuff I want to take out, not add." Brown explains why they err on the side of excluding various types of investments from client portfolios (40:59-42:33). "Our clients are here because they want us." Brown says fee pressure hasn't been an issue for the firm (42:34-44:22). W

This week's guest on The Long View is financial advisor Harold Evensky, who Morningstar managing director Don Phillips has often called the "dean of financial planning." Evensky is chairman of Evensky & Katz/Foldes Financial, and he's a retired professor of personal financial planning at Texas Tech University. Evensky has been extremely active in the planning community during his career. He's the past chairman of the International CFP Council, the CFP Board of Directors, the CFP Council on Examinations, and the Board of Appeals. Evensky is a frequent public speaker and has authored several books, including The New Wealth Management. During the course of this conversation, he weighed in on the SEC's newly approved Regulation Best Interest, calling it an "unmitigated disaster." He also discussed asset allocation leading up to and in retirement, his firm's application of a core/satellite approach, and different business models for financial advice. Show Notes and References Background (0:18-0:57) • Harold Evensky bio • Evensky & Katz/Foldes Financial • Personal Financial Planning Department, Texas Tech University • Financial Planning Standards Board Council (formerly known as "International CFP Council") • CFP Board of Directors (formerly "Board of Governors") • CFP Council on Examinations (formerly "Board of Examiners") • The New Wealth Management: The Financial Advisor's Guide to Managing and Investing Client Assets (CFA Institute Investment Series Book 28) by Harold Evensky • Books by Harold Evensky Evensky explains why his practice opted to charge clients a percentage of assets under advisement instead of an annual retainer: "An unmitigated disaster." (0:58-2:51) How Evensky and his fellow practitioners spend their time: "It's all built around the planning." (2:52-4:02) On the firm's receptiveness to younger clients with less assets to advise: "Absolutely yes." (4:03-4:40) The future: Comprehensive, modular financial planning. (4:41-6:49) On the commodification of financial advice: "To the general public … it pretty much looks like the same service." (6:50-7:37) On robo-advice: "Our conclusion was ... it's dangerous." (7:38-11:15) • "The Efficacy of Publicly Available Retirement Planning Tools" by Taft Dorman, Barry S. Mulholland, Qianwen Bi, and Harold Evensky (Oct. 9, 2018). Helping clients navigate turbulence: "Our goal is to call the client before they call us." (11:16-12:15) The critical importance of communicating with clients: "Brokers and, much to my surprise, trust officers … hide under their desks." (12:16-13:02) Where risk tolerance and client-specific circumstances come to the fore and human capital and age take a back seat: "Everything calls for a customized mix." (13:03-15:25) • Human Capital "That's horribly inefficient." How Evensky came to embrace the simplicity of the core-and-satellite approach to portfolio construction. (15:26-19:27) Evensky's construct for "explore" positions: "It can be most anything." (19:28-20:37) Value's dry spell: "The basic concept of the value premium remains viable." (20:38-22:19) • Dimensional Fund Advisors Permanent impermanence: How Evensky and his colleagues grapple with investing ephemera. (22:20-23:58) Global diversification: "We've always believed in an international exposure." (23:59-25:45) • Home-bias definition • Market capitalization of listed companies in current prices Risk tolerance and return needs drive strategic asset-allocation decisions: "Our maximum equity allocation is 80%." (25:46-27:53) "Rebalancing is an immensely powerful tool, painful though it is in the short-term." (27:54-30:44) Human capital's influence on the planning process: Car salesman versus tenured professor. (30:45-32:42) Ramping up equity exposure through retirement: "Intellectually I think it's very sound research; but from a behavioral standpoint I don’t think it's realistic." (32:43-34:24) • "Reducing Retirement Risk With a Rising Equity Glide Path" by Wade D. Pfau and Michael Kitces (Sept. 12, 2013) . The simple two-bucket approach: "My experience is the relatively small opportunity costs (associated with the bucketing approach) are way outweighed by the behavioral benefits." (34:25-38:24) • Testimony of Deena Katz, CFP, on "Boomer Bust? Securing Retirement in a Volatile Economy" before the Senate Special Subcommittee on Aging, Feb. 25, 2009 (see Page 7 for "paycheck syndrome"). Time- and goals-based bucketing: "A great deal of appeal but they don't make any sense." (38:25-39:19) How the complexion of retirement has changed: People will have to work longer. (39:20-41:32) "Where's the protection of the investor?" Evensky takes a dim view of the SEC's just-finalized Regulation Best Interest measure. (41:33-43:34) • "A New Rule Won’t Make Your Broker an Angel" by Jason Zweig, The Wall Street Journal, May 31, 2019. Competency standards: Professionalism subsumes competency. (43:35-46:57) About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christi

Is there a retirement crisis in the United States, and what role does the government have in improving the system? What's the current status of a fiduciary standard for financial advice? Aron Szapiro, Morningstar's director of policy research and our guest for The Long View podcast, obsesses over these topics. In his role, he and his team conduct research on various matters of public policy and formulate views on policy proposals under consideration by Congress and regulatory bodies. Szapiro has testified before Congress, and he has an inside view of how Washington works: Before venturing into the private sector, he was a senior analyst in the U.S. Government Accountability Office, and he also worked for the New Jersey state legislature. In this wide-ranging interview, Szapiro defines Morningstar's approach to policy research and homes in on some of the policy matters dominating our discourse today: whether financial advisors should be held to a fiduciary standard, how the U.S. retirement system might be improved, and whether meaningful retirement legislation can make it through partisan gridlock in Washington. This conversation was recorded on April 30, 2019. Since then, the House passed the SECURE Act (on May 23); that legislation has provisions related to annuities in 401(k) plans, multiple employer plans, and required minimum distributions. As of June 11, 2019, the provisions have not passed the Senate. And the Securities and Exchange Commission approved a final version of Regulation Best Interest, which aims to hold broker/dealers to a higher standard of care than was previously required. Show Notes and References Background and Professional Development Szapiro's trajectory into policy research: "It was this arcane language that I wanted to understand." (1:15-2:39) • 10 Millennials Making Their Mark on Washington and Beyond Policy Research What policy means at Morningstar and for investors: "Policy really drives and dictates a lot of what ends up happening to investors." (2:40-4:55) How his team avoids conflicts with Morningstar's business interests: "What would be best for investors and what evidence do we have to support that position?" (4:56-6:25) How his team works to ground policy recommendations in the data: "What we don't do is we don't try to make values-based arguments." (6:26-8:25) On whether investors are shaping the investment landscape more than policymakers are: "It's in government's long-term interest to make sure we have a system that protects and empowers people to save and make some decisions." (8:26-10:35) Policy Matters Today The state of fiduciary regulation for financial advisors: "It's sort of a mess." (10:36-14:53) Morningstar's Take on the SEC's Proposed Conflict of Interest Rules The SEC's Best-Interest Proposal: What Morningstar Told Regulators DOL Sets Date to Propose New Fiduciary Rule States' role in creating policies that affect investors: "I hope these things build toward a federal solution." (14:54-16:58) New Jersey Proceeds With Adoption of a Uniform Fiduciary Standard Nevada's Draft Regulations for a Uniform Fiduciary Standard What will drive substantive change in Washington with respect to the investment and retirement landscape: "It's a very slow-moving ship." (16:59-19:51) The State of the U.S. Retirement System Retirement preparedness in the U.S.: "There are a lot of people who have been left behind by the fragmented system that we have." (19:52-22:48) How to measure retirement adequacy: "People should be able to sustain their standard of living that they had during their working lives in retirement." (22:49-24:13) Whether today's retirees are running out of money, and how we would know. "You don't want to do policy by anecdote." (24:14-26:38) Rand Corporation Retirement and Retirement Benefits Research 2019 Retirement Confidence Survey (EBRI) On the bifurcation in retirement-plan quality between big and small employers. "Small employers are busy keeping the lights on." (26:39-29:22) SECURE Act (passed by the U.S. House of Representatives on May 23, 2019) Retirement Enhancement and Savings Act of 2018 Solutions for Small-Company Retirement Plans Legislation That Aims to Help Workers Save On whether the Thrift Savings Plan for federal workers should be available to more workers. "It's great as a model that others can aspire to." (29:23-31:50) About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager res

Our guest on this week's podcast is Michael Kitces. Michael is a partner and the director of wealth management for Pinnacle Advisory Group, a Columbia, Maryland-based wealth management firm that advises on about $1.8 billion of assets. In addition, he is a co-founder of the XY Planning Network. As the host of the Financial Advisor Success podcast and the publisher of the popular financial planning industry blog Nerd's Eye View, Michael has established himself as one of the most prolific and insightful commentators on the financial advice business. A fixture on the speaking circuit and in the media, Michael often addresses key trends and innovations in the way advisors serve their clients; our interview with him focused on the future of the financial advice business. Show Notes and References Background and Professional Development Michael’s formative years: “The only thing I really think I figured out by the end of college was … that I didn’t want to do psychology, theater, or medicine” (0:59-2:51) Michael’s bio Pinnacle Advisory Group XY Planning Network Financial Advisor Success podcast Nerd’s Eye View blog Dad’s old life insurance policy: How a wedding gift led Michael down a path to a career in the financial services industry (2:52-4:21) Michael’s background and entry-path into finance “He was just a really different guy than everybody else”: Michael’s recounts his breakthrough realization that he wanted to be a financial planner (4:22-6:07) · Certified financial planner designation How Michael used his pre-med training to overcome a crisis of confidence that he didn’t know what he was doing: “I probably shouldn’t be giving them advice; I’m going to hurt someone” (6:08-7:31) Hippocratic oath Going deep to differentiate: “I’m going to get really good at these annuity benefit riders” (7:32-8:45) Leveraging a Mini-Specialization to Gain Experience and Get More Client Referrals” by Michael Kitces (Aug. 16, 2018; Nerd’s Eye View blog) Variable universal life insurance—a short explainer The Advisor’s Guide to Annuities (5th Edition) by Michael E. Kitces and John L. Olsen Behavioral Finance in Practice Where behavioral finance falls short: Practicality (8:46-11:40) Recency bias: A brief explainer Persuasion: Using psychology and coaching to help clients overcome their biases (11:41-13:01) “Why Evolutionary Psychology May Be Better Than Behavioral Finance Research to Understand Financial Behaviors” by Dr. Derek Tharp, lead researcher for Kitces.com (Jan. 16, 2019; Nerd’s Eye View blog) Influence: Science and Practice (5th Edition) by Robert Cialdini Advice that Sticks by Dr. Moira Somers “Most of us just don’t want to say that about ourselves”: Clients don’t hire us to save them from themselves, but to get on a better path and save time (13:02-16:37) “Do Clients Really Value Getting Help Managing Their Behavior Gap?”; transcript of episode 5 of “Kitces and Carl” video series “Zoom the camera out a little bit”: The key to helping clients through difficult times is being available, clearly communicating, and setting context (16:38-18:18) “There’s very little research at all about what you’re actually supposed to do about this stuff” (18:19-19:56) Financial Advice: Evolution and Great Leaps “Disturbingly like clockwork”: Technology’s role in propelling financial-advice from stock-brokering to the mutual-fund era to asset-allocation models (19:57-22:14) “How May Day Remade Wall Street” by Jason Zweig (May 1, 2015; Wall Street Journal; Total Return Blog) “So Easy a Baby Could Do It” E-trade commercial Computers disrupted the stock-broker model and the internet disrupted the mutual-fund model. Michael on why he thinks software will disrupt the fee-based asset-allocation model (22:15-24:06) An S&P 500 index fund just for you: “Technology is going to allow us to completely disintermediate not just mutual funds but most of the ETF complex as well” (24:07-25:36) “Indexing 2.0: How Declining Transaction Costs and Robo-Indexing Could Disintermediate Index Mutual Funds and ETFs” by Michael Kitces (May 28, 2014; Nerd’s Eye View blog) “Global Fund Flows Report” by Morningstar The Future of Advice “If we can do that with medicine and we can do this with clothing, we can do this with at least large portion of financial advice as well”: Michael on delivering advice virtually (25:37-30:25) “How Video Conferencing Can Put the Face-to-Face (Back) into Distance Financial Planning Client Relationships” by Michael Kitces (July 27, 2015; Nerd’s Eye View blog) “(Saying) ‘Oh no one’s ever going to want to work with an advisor virtually; it’s all in person’ … is like clothing stores insisting that Amazon was no threat to them 20 years ago” (30:26-32:56) “The Future of Financial Planning in the Digital Age,” a presentation by Michael Kitces to FPA Georgia (May 24, 2017) “Is Digital Search About to Replace Referrals for Finding a Good Financial Advisor” by Michael Kitces (June 3, 2013; Nerd’s Eye View blog) Technology leaps like robo-advice

Our guest for this week's installment of The Long View podcast sits at the busy intersection of healthcare and financial planning. Carolyn McClanahan was a practicing physician for a number of years, but after a frustrating search for a financial planner for her and her husband, she decided to study financial planning and earned the CFP designation. In 2004, she founded financial planning firm Life Planning Partners, and serves as the firm's director of financial planning. She also co-founded Whealthcare, a software program that identifies and troubleshoots age-related financial risks. Carolyn strongly believes that individuals and financial advisors should think proactively about the implications of aging for healthcare and financial planning. She is also sought-after as a public speaker and a media expert on matters of aging, healthcare, and personal finances. Show Notes The quest for real advice: How a "math nerd" found her way to medicine and eventually sought financial advice (1:12-3:32) Frustrated: How disappointing experiences with financial advisors spurred Carolyn to pursue a career in financial planning (3:33-4:56) "It worked beautifully": Why Carolyn decided to charge flat fees for her planning services instead of taking a percentage of client's assets (4:57-6:50) "It's a lot harder": Carolyn explains why the flat-fee model isn't more commonplace, how they determine the right fee for each client, and why it makes economic sense (6:51-8:44) An "ensemble model": How Carolyn built her practice and how she hones her focus (8:45-13:01) A piece, not the whole pie: The role investments play in a client's financial plan (and how to avoid expectation gaps) (13:02-14:43) The healthcare spending conundrum: "We spend so much money on end-stage healthcare that really doesn't help anybody." (14:44-17:39) Heal thyself: "We're going to start seeing lawsuits from employees…about employers not being good purchasers of (health) insurance" (17:40-19:35) Primary care as a public service: Carolyn's ideal healthcare system puts community health centers at its core (and removes primary care from insurance coverage) (19:36-22:35) How to address the big-four "aging planning" issues: When to stop driving, when to move, when to get help with financial decisions, when to get help with healthcare decisions (22:36-26:02) How to take the keys away: Addressing the issue of aging parents who shouldn't be driving anymore (26:03-28:08) Bringing the family together: "90% of fraud and abuse is done by people close to you" (28:09-30:36) "It's been a beautiful thing to use": How Carolyn employs "engagement standards" to align expectations and ensure clients commit to the plan (30:37-32:42) Cognitive decline: "A client's biggest risk to their financial security is actually themselves" (32:43-34:33) How to plan for healthcare spends: Live healthy, work as long as you can, reflect on how you use healthcare (34:34-37:52) Whealthcare: A programmatic attempt to project and plan for healthcare costs (37:53-39:02) A construct for long-term care planning: "People who are very healthy are going to have a longer long-term care need; people with dementia have an average long-term care need; if you're very unhealthy you don't have to worry about long-term care." (39:03-42:10) Paying for long-term care: Carolyn suggests setting aside a "bucket" of money to self-fund long-term care, which avoids problems with acceptance into nursing facilities and complexity of long-term care insurance (42:11-45:20) "There's more to money than just the numbers": Why hybrid long-term care insurance isn't usually a good answer, but sometimes piece of mind makes up for its opportunity costs (45:21-47:45) How to avoid cognitive decline: It's not all hereditary, so learn as much as possible and live a healthy lifestyle (47:46-50:31) Other ways to anticipate and manage cognitive decline: How a checklist helped a client determine he was suffering a series of mini-strokes (50:32-53:29) References Caroyln McLanahan bio Whealthcare National Association of Personal Financial Advisors (NAPFA) Employee Benefit Research Institute Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest in this special bonus episode of The Long View podcast is Tim Buckley, chairman and CEO of the Vanguard Group, which manages over $5 trillion in assets globally. Tim took the helm at Vanguard in January 2018, succeeding Bill McNabb. Tim is a longtime Vanguard veteran, having joined the firm in 1991. Before assuming his current role, he served as Vanguard’s chief investment officer, head of its retail investor group, as well as its chief information officer. In this mini episode, which was recorded live at the 31st annual Morningstar Investment Conference in Chicago, we discuss the significance of Vanguard's recent Morningstar Award for Investing Excellence, which the firm received for exemplary stewardship. Tim also addressed how Vanguard attempts to balance growth with delivering good outcomes to clients, its capital allocation philosophy and key initiatives, the future of advice, the trend toward "free" funds, as well as the firm's recent forays into sustainable investing, among other topics. Show Notes “It’s the core of Vanguard”: What stewardship and investor-centricity has meant to the firm (0:28-1:20) Defining “client”: How Vanguard balances off the objectives of its different lines of business (1:21-2:51) Incredible scale can’t be taken for granted: Is it enough to just be a fund company? (2:52-4:15) Gazing into our crystal ball: What Vanguard looks like in 10 years and how that compares to today (4:16-5:30) Goal-setting: How Vanguard defines success and how that informs the way they run the business (5:31-6:40) The future of advice: “I can’t imagine anything but the price (for advice) coming down” (6:41-7:24) Embrace technology and personalize: Tim’s counsel to advisors who are trying to adapt to falling advice fees (7:25-8:43) “There’s no one even close to us”: What matters in a “freemium” world is the cost of the whole portfolio (8:44-10:12) Pathways to growth: The future of ESG funds and factor investing and how Vanguard tries to position these strategies to advisors and other markets (10:13-12:40) “All the money flowing to index funds--it’s not because active doesn’t work. It’s because high-cost active doesn’t work” (12:41-14:31) “You can have your cake and eat it, too, in the active ESG approach”: How to succeed with ESG investing (14:32-16:22) Best practices: How Vanguard settled on its approach to ESG investing (16:23-17:02) “We’ve looked”: Vanguard’s approach to capital investment and answering the build-vs.-buy question (17:03-18:26) “Vanguard is defined by its structure, and we’re going to keep it”: Tim on why Vanguard will never de-mutualize (18:27-19:20) References Tim Buckley, chairman and CEO, The Vanguard Group 2019 Morningstar Awards for Investing Excellence: Nominees for Exemplary Stewardship Winners of the 2019 Morningstar Awards for Investing Excellence Vanguard founder John “Jack” Bogle Vanguard’s mutual ownership structure, explained Vanguard funds snapshot page Analyst-rated Vanguard Funds Analyst-rated Vanguard ETFs “Investing Crosses the Rubicon: Free Index Funds” “Vanguard: Competitors’ Pricing Behavior is Inconsistent” “2018 Morningstar Fee Study Finds that Prices Continue to Decline” “Vanguard: Cost of Advice Could Fall Further” Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest for this week's installment of The Long View podcast is Morgan Housel. Morgan is a partner at the Collaborative Fund, a venture capital firm that makes investments in firms that in its words are "at the intersection of for-profit and for-good." A former columnist at The Motley Fool and The Wall Street Journal, Morgan has become one of the most prolific and insightful writers on the investment decision-making process, as evidenced by his impressive body of work on the Collaborative Fund website's blog. Morgan joined us in this live recording of The Long View from the 31st annual Morningstar Investment Conference in Chicago. Our interview covered a lot of ground, from how Morgan found his way into the finance world, to the role he plays at Collaborative Fund, to a host of other personal and behavioral finance topics that draw on his work. Show Notes The accidental writer: Morgan's background and how he came to write about financial topics (0:55-3:04) "The ability to write a check is no longer a competitive advantage": What Collaborative Fund does, why Morgan was drawn to it, and the role content plays in its strategy (3:05-5:05) Authorial license: "It's really important to write what … you yourself would find interesting" (5:06-5:58) Transparency and impact: "We're looking for companies whose ability to do good is their competitive economic advantage" (5:59-8:21) Public vs. private investing: "If I made a Venn diagram of public and privates, the overlap is much greater than I ever thought it would be" (8:22-9:19) Theory vs. practice: How private-market "lock-ups" can make sense for individual investors but are still inappropriate for the vast majority (9:20-10:24) The future of public-private investing: "There's some liquidity in private markets but it’s not very efficient" (10:25-11:16) Be honest with yourself: Don't try to fight behavioral biases which can't be eliminated anyway; work around them (11:17-13:13) "That's what works for me": How Morgan reckons with his own behavioral biases (13:14-13:44) Financial advisors' job one? Don't allow events or emotions to interrupt compounding (13:45-15:52) History and psychology: "The most important intersection in investing" (15:53-18:24) Scarred, not complacent: Investors are still licking their wounds from the global financial crisis (18:25-20:12) You can't shake investors out of their experiences; it takes a new generation to come along (20-13-21:17) "There’s no other industry in the world where the rewards are as big as in finance": How big paydays can distract focus from everyday work (21:18-23:42) How fee arrangements can impact portfolio managers' risk and reward calculations (23:43-24:26) Avoiding confirmation bias and bringing in diverse perspectives: "Find someone who you admire their thought process in one aspect of thinking … but you disagree with them about something else" (24:27-26:10) A crank whose views Morgan respects--"Jake" on financial Twitter (@econompic) (26:11-26:45) "No one hires a luck manager": Morgan explains how investors tend to account for risk, but not luck, in their decisions (26:46-29:17) "Investing isn't the study of finance. Investing is the study of how people behave with money." Morgan explains why he doesn't read investing books (29:18-30:03) How people deal with uncertainty and opportunity: The importance of content aggregators and of ditching bad books (30:04-31:14) Perishable: Morgan's favorite non-investing book of the last few years is about how much things can change, on average, in everyday life (31:15-33:03) "You're not proven until you've survived a calamity": Why it’s so hard to distinguish skill from luck (33:04-35:16) Good advice (that Morgan doesn't follow himself): Carry a little bit of debt to hone your focus (35:17-36:56) "You have to pay the fee": How thinking of volatility as an ongoing price for the opportunity to grow capital can help investors put risk in the right context (36:57-38:56) Are investors giving up on investment skill? Yes, but that’s probably OK (38:57-40:41) The importance of financial planning: Telling clients the truth (i.e., that they're not on a path to a secure, comfortable retirement, not matter how much they want to believe otherwise) (40:42-43:09) On Jack Bogle: "The biggest undercover philanthropist of all time." (43:10-44:48) What matters is how well you behave: The psychology of investing (44:49-45:41) References The Collaborative Fund blog Morgan Housel’s collected works Morgan Housel, bio “You Played Yourself” by Morgan Housel (Apr. 24, 2019) “You Have to Live it to Believe It” by Morgan Housel (Apr. 9, 2019) “Useful and Overlooked Skills” by Morgan Housel (May 1, 2019) Jake (@econompic) and Econompic Patrick O’Shaughnessy, “The Investor’s Field Guide” Abnormal Returns “The Big Change: America Transforms Itself 1900-1950” by Frederick Lewis Allen Books recommended by Charlie Munger “Origins of Greed and Fear” by Morgan Housel (Jan. 31, 2019) George Soros “A Man in the Mi

Our guest for this week's installment of The Long View podcast is Morningstar managing director Don Phillips. Don was Morningstar's first mutual fund analyst and eventually became CEO of the firm; he established Morningstar's independent voice and mentored scores of analysts. He also helped develop many of the tools that investors today take for granted, such as the Morningstar Style Box and the Morningstar Rating for stocks (also known as the star rating). Throughout his career Don has worked to enact positive change in the fund industry, speaking out on issues such as misleading advertising and high-fee funds as well as the need for better shareholder disclosures. In this broad-ranging interview, Don discusses his path from a paper boy investor in Templeton Growth Fund to a job analyzing mutual funds at Chicago startup Morningstar in the mid-1980s. He also opines on the industry's evolution from the opaque, sales-driven culture that he encountered 30-plus years ago to its current emphasis on transparency and very low costs. Early influences • The paper-boy years: Don’s early investing influences (1:40) • The magic of mutual funds: “Sir John Templeton is my personal money manager” (2:45) • “I had gotten married”: How an aspiring literature professor became Morningstar’s first mutual-fund analyst (4:00) Building Fund Research • “Dark days”: What it was like in the fund industry of the 1980s (5:20) • Democratizing data: When the freshest fund stats were nine months old (7:10) • Getting them to answer the phone: How Morningstar’s fund database was built (8:30) • “Putnam wouldn’t talk to us”: How pull demand (i.e., a reporter’s background notes) changed that (9:45) • “My first job was to read 777 mutual fund prospectuses” (11:20) • Don’s “el-train” indoctrination to investing (12:10) • “Not interested (click)”: Opening doors in the early days (13:00) • “It’s who you surround yourself with”: How to build a team (14:20) • “Their funds are better than some, not as good as others…”: Morningstar’s approach to serving the financial journalists that called on it (16:10) • “They found us”: Connecting with our audiences, finding our voice (17:00) Analyzing Funds, Finding Our Voice • “Let’s add a gold fund”: Behind the development of the Morningstar Style Box (18:00) • “You had to be an insider to know that Windsor was a value fund and Janus was a growth fund”: Turning the tables on fund-company marketers (19:05) • “Lies, Damn Lies, and Fund Advertisements”: Facing down a fund company’s libel suit (21:45) Achieving Better Outcomes • Low-cost trend means “better and better deals for the investor” but beware unintended consequences (23:00) • It’s not the only thing: “You can have a low-cost portfolio that’s wildly inappropriate for an investor that leads to a disastrous outcome” (25:00) • “We’re all in the behavior-modification business”: Helping people chart a path to their goals (26:40) • “I would have closed the (Vanguard) Growth Index Fund”: How the experience you create for investors determines your success in the fund industry (36:30) • Avoiding the “arms-dealer mentality”: How fund companies can ensure investors have better experiences (39:30) • “The best thing I can do for my clients…is to go on vacation”: On the wisdom of investing without tinkering, and the hazards of information overload (41:00) Active vs. Passive Investing (and Remembering Jack Bogle) • “Passive is getting more active every day”: Finding ways to evaluate algorithms and indexes (28:00) • “Jack is very much with us today”: Remembering Jack Bogle and his impact on investors and Morningstar (29:10) • “You can’t get away from arithmetic”: If cost is the enemy then investors probably aren’t overdoing it in fleeing active funds for passive (31:30) • “To me it’s not an either/or battle”: Don on the mix of active and passive funds in his personal portfolio (32:50) • Personalization as the new active: “The art of investing is matching investment to investor” (35:00) The Future of Funds, Advice, and Research • Imagining the fund industry in 10 years (and its similarity to the music business’s radical transformation): “It may be that the mutual fund is like the old LP” (42:20) • “Investors have a right to know” the ESG consequences of where their money is going (45:00) • “Digitizing process”: Using big data to assess the investment process (46:10) • “When you’re reading literature, you’re seeing the world through different eyes”: The importance of diversity to decision-making and life (47:30) • “Put it on a little piece of paper and put it in a drawer”: How investment committees can avoid knee-jerk reactions and make better decisions (48:30) • “The art of investing is the match between investment and investor”: New frontiers in fund research (52:00) • “There is fee pressure, but there’s also a lot of satisfaction”: How the advice industry evolves amid automation and declining prices (56:30) • “Fiduciary standards in general are hard to enact”: The intenti

Our guest this week is noted author and advisor, William Bernstein. Bill’s background and entree to finance is unique—a neurologist by training, Bill self-taught himself the principles of investing and asset allocation, eventually parlaying that knowledge into a successful financial advisory practice and a series of influential, critically acclaimed books such as "The Intelligent Asset Allocator." In this conversation, we explore Bill’s background and how it shaped his development and thinking as an investor and how he applies those lessons in working with clients who are trying to meet goals like a comfortable, secure retirement. “I had to figure out how to save and invest on my own”: Bill’s crash course into investing and constructing a portfolio (1:29) “I had to figure out how to save and invest on my own”: Bill’s crash course into investing and constructing a portfolio (1:29) • “I had to figure out how to save and invest on my own”: Bill’s crash course into investing and constructing a portfolio (1:29) • Separating the wheat from the chaff: How Bill decides what investing research matters and what doesn’t (4:30) • Top of the list: Books that profoundly influenced Bill’s investment philosophy and approach (5:45) • “The overwhelming science of investing does not speak well of active management”: Bill on why empirical data ought to settle most questions (and why active-share doesn’t hold up to scrutiny) (7:02) • “You approach it with extreme caution”: Bill explains why investors should be skeptical of most factors they encounter in the “factor zoo”, save a few (9:27) • A question that’s giving Bill pause: Is value too crowded a trade? (10:33) • Is low-volatility the most attractive factor from a behavioral standpoint? Bill worries it’s gotten too expensive. (12:02) • Fingers (and toes) crossed: Bill thinks value is cheap enough to stick with (12:55) • “Really, not very much”: Bill on how his approach to asset allocation has evolved over time (13:43) • “The riskiness of stocks is not an intrinsic characteristic of stocks; it’s more a characteristic of the investor”: Why stocks’ volatility doesn’t fluster younger investors, but freaks out older investors (14:38) • On how we tend to overrate our risk tolerance: “The difference between being able to see (losses) in a spreadsheet and actually manage (through losses) in real time is the difference between crashing an airplane in a flight simulator and in the real world” (15:38) • “If you’ve won the game, stop playing”: How to shake older investors out of their complacency with equity risk and recency bias (16:53) • “The very best physicians are consumed by self-doubt”: How a high ratio of “rumination-to-celebration” can help investors constructively reckon with shortcomings in their approach and improve (19:26) • Getting it wrong and therefore right: Bill explains how advisors can use their own fallibility and uncertainty to fortify their relationship with clients (versus scaring them to death) (21:12) • An argument with Jack Bogle: How a debate with the Vanguard founder about foreign-stock investing became an object lesson in how reality intrudes on theory (and how that informs Bill’s approach to managing clients) (22:56) • “You don’t appreciate it until bad things happen”: On whether the rally in riskier bonds has changed Bill’s tune on limiting fixed-income investments to short-term, high-grade fare (24:25) • “Investment is a process that transfers wealth to people that have a strategy and can execute it from those who don’t and can’t” (26:22) • “A reasonable hypothesis, but it got tested” (and failed): Bill on the argument for active bond investing (27:02) • Earthquakes and execrable returns: Why the best investing and economic gains have been realized in English-speaking countries. (Hint: It’s the law.) (27:48) • Emerging-markets stocks: Why they’re only a bargain when they’re cheap relative to their own history and developed markets (and still might not be inexpensive even in that case) (30:23) • Potential hazards: “The US markets are significantly overvalued relative to the rest of the world” (31:36) • “You’d have your head handed to you”: On the impermanence of investment measures, why it’s dangerous to extrapolate, and the implications for investors (32:54) • “When I think about my tombstone, ‘investment adviser’ is not one of the things I want to see up there” (34:00) • “We’re extremely choosy in who we take on. So we have a very enjoyable practice as a result of that” (35:49) • On retirement preparedness: “A slow-moving and fairly impressive disaster” (37:13) • “I don’t think the system needs nudges. I think the system needs dynamite”: Steps to radically redefine the retirement system (39:20) • “It would be nice if we had a system where people didn’t have to save quite so much, because that’s an unattainable goal for probably 80% of the population” (40:41) • The skunk-in-the-suburb analogy: We’re evolved to avoid the snake or the tiger, not