The Long View

By Morningstar

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 Jan 20, 2020

Description

Expand your investing horizons and look to the long term. Join hosts Christine Benz and Jeff Ptak as they talk to influential leaders in investing, advice, and personal finance about a wide-range of topics, such as asset allocation and balancing risk and return.

Episode Date
Fran Kinniry: Applying the Vanguard Approach to Private Equity
00:55:45

(A note to listeners: We recorded this interview before the recent sell-off began, and that is why it's not discussed. We'll address the recent downturn in future installments of The Long View. Please enjoy this episode and thanks again for listening.)

Our guest this week is Fran Kinniry. He is a principal in the Vanguard Investment Strategy Group, which develops Vanguard's investment philosophy, methodology, and portfolio construction strategies. Kinniry has been a leading researcher on topics like capital markets, portfolio design, and investment strategy. He was recently tapped by Vanguard to lead the firm's initiative to offer private equity investment management to certain institutional and high-net-worth clients. Before joining Vanguard in 1997, Kinniry was a partner and senior portfolio manager for institutional asset manager Executive Investment Advisors, and before that he was the portfolio manager for H. Katz Capital. Kinniry is a CFA charterholder and earned his Master of Business Administration and bachelor's degree from Drexel University.

Background and Research
Fran Kinniry bio

HarbourVest

"Vanguard and HarbourVest Announce Private Equity Partnership." The Vanguard Group, Feb. 5, 2020.

"The Role of Private Equity in a Nonprofit Portfolio." The Vanguard Group, Nov. 15, 2019.

Vanguard research library

"Vanguard Advisor's Alpha," by Donald Bennyhoff and Fran Kinniry, Vanguard Research, July 2018.

John C. Bogle: A Look Back at the Life of Vanguard's Founder

Apr 01, 2020
A Conversation With the Sequoia Fund’s Managers
00:50:42

(A note to listeners: We recorded this interview before the recent sell-off took began, explaining why it’s not discussed. We’ll address the recent downturn in future installments of The Long View. Please enjoy this episode and thanks again for listening.)

Our guests this week are Arman Kline and Trevor Magyar of investment management boutique, Ruane, Cunniff & Goldfarb, or RCG for short. Arman and Trevor sit on the five-person investment committee at RCG that oversees management of all client assets, including those held in the Sequoia Fund. This year, the Sequoia fund will celebrate its 50th anniversary as a mutual fund. From its July 15, 1970, inception through Jan. 31, 2020, the fund gained 13.6% per year, topping the S&P 500 index by 240 basis points annually. Arman joined RCG in 2002, following a stint as an equity analyst at Merrill Lynch. He graduated from Colby College. Trevor began at the firm in 2007, following an early career in investment banking, private equity, and hedge funds. He's a graduate of Princeton University and received his MBA from Harvard University.

General

Ruane, Cunniff & Goldfarb (RCG)
RCG investment committee and team bios
Sequoia Fund 2019 Annual Report
Sequoia Fund Q4 2019 Investor Letter
Sequoia Fund shareholder communications
Morningstar analysis of Sequoia Fund; Aug. 8, 2019
Sequoia Fund portfolio analytics

Stocks Referenced

Rolls Royce PLC ADR RYCEY
Mastercard MA
CarMax KMX
Carvana CVNA
Wayfair W
Amazon.com AMZN
Zalando SE ZLDSF
Zooplus AG ZLPSF
Vivendi SA VIVEF
Alphabet GOOGL
Berkshire Hathaway BRK.A

Mar 25, 2020
Mohamed El-Erian: 'We Did Not Prepare for Something As Severe As What We’re Facing’
00:34:40

Our guest today is Dr. Mohamed El-Erian. Dr. El-Erian is Chief Economic Advisor at Allianz, the parent of PIMCO, where he formerly served as chief executive and co-chief investment officer, and President-Elect of Queens’ College, Cambridge University. He first joined PIMCO in 1999 and was a senior member of PIMCO’s portfolio management and investment strategy group. He rejoined the company at the end of 2007 after serving for two years as president and CEO of Harvard Management Company. 

Before coming to PIMCO, Dr. El-Erian was a managing director at Salomon Smith Barney/Citigroup in London and before that spent 15 years at the International Monetary Fund in Washington, D.C., where he served as Deputy Director. Dr. El-Erian has served on numerous boards and committees, including a stint as Chair of President Obama’s Global Development Council from Dec. 2012 to Jan. 2017. 

A much sought-after author, columnist, and speaker, Dr. El-Erian has published two best-selling and critically acclaimed books, When Markets Collide and The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse. He also was named to _Foreign Policy _magazine's list of “Top 100 Global Thinkers” four years in a row, among other accolades.

Dr. El-Erian holds a master’s degree and doctorate in economics from Oxford University and received his undergraduate degree from Cambridge University.

Background
Dr. Mohamed El-Erian bio
Dr. El-Erian’s commentary
Dr. El-Erian’s tv and radio interviews
The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse, by Mohamed El-Erian, January 2016. 
When Markets Collide, by Mohamed El-Erian, June 2008. 
• “The FP Top 100 Global Thinkers," Foreign Policy, Nov. 26, 2012. 
• Dr. El-Erian’s Twitter handle @elerianm  

Dr. El-Erian’s Recent Comments on COVID-19

• “The Coming Coronavirus Recession: And the Uncharted Territory Beyond," Foreign Affairs, Mar. 17, 2020. 

• “The Federal Reserve Takes its Crisis Management Game Up Several Notches,” Yahoo Finance, Mar. 17, 2020, 

• “It Will Get Better But After We Feel Even More Unsettled,” Yahoo Finance, Mar. 13, 2020. 

• “Six Things Investors Should Remember Amid Extreme Stock Market Volatility,” Yahoo Finance; Mar. 8, 2020. 

• “El-Erian: We Shouldn’t Bail Out Every Industry Halted by Coronavirus Crisis,” CNBC, Mar. 19, 2020. 

• “El-Erian: Fed Should Have Been More ‘Laser-Focused’ on Market Failures,” CNBC, Mar. 16, 2020. 

• “El-Erian on Markets: ‘It’s Getting Less Scary Than It Has Been for a While," CNBC, Mar. 13, 2020. 

• “El-Erian: U.S. Stock Market Could End Up Dropping 20%-30% Before Bottom Is Finally Reached," CNBC, Mar. 9, 2020.

Shownotes (Note: We will add the interview transcript soon.)

Introduction
• Introducing Dr. El-Erian and bio (0:21)

High Level Macro
• The market and economic backdrop have changed drastically in what seems like no time. You’ve been prescient in foreseeing some of the impacts. But what has surprised you thus far? (1:48)
• We’ve heard you say that financial “sudden stops” are more addressable than economic “sudden stops”. Can you explain the difference between financial/economic “sudden stops," why the latter is harder to deal with, and how that relates to our current situation? (2:58)

Policy Response
• Public health concerns are trumping economic realities at the moment. For instance, entire states are being told to shelter in place. This is economically devastating. Do you think this is prudent policy without a stimulus package or backstop of some kind? (5:13)
• You’ve argued that interest-rate cuts and broad fiscal stimulus shouldn’t be emphasized during this initial phase of the crisis. That we should instead focus on containment and building immunity to COVID-19. That seems surprising considering the scores of those who have been abruptly laid off or seen business dry up. What are they supposed to do without a massive, immediate stimulus? (7:02)
• Can we talk about the impacts that you foresee for the private and public sectors and what you view as the correct policy response for addressing each? Let’s take them one by one: (9:29)
- The suddenly unemployed
- The small business owner
- The lender
- The airline and hospitality sectors
- The state or municipality

Capital Markets
• Turning to capital markets, we’ve obviously seen stocks enter a steep sell-off. But the bond market has also broken down. Can you describe for some of our listeners--who might not be as familiar with the inner workings or dynamics of the bond market--what has happened there, why, and what will stem it? (11:29)
• The Fed stepped in to backstop money market funds in recent days. Have you seen signs that is succeeding in stabilizing corporate funding markets like the commercial paper market? (15:05)
• What will be point of equilibrium at which fiscal and monetary policy relief overtakes fear to stabilize markets and the economy? (16:57)

Aftermath
• You wrote that one of the lasting consequences of novel coronavirus will be accelerating deglobalization and deregionalization. Global supply-chain management and trade interconnection has been the dominant trend in recent decades. Why would we retreat from that, and how will that be felt in the real economy and daily life? (19:12)
• To this point, while COVID-19 has been deemed a global pandemic, its impacts have been mostly northern hemispheric. What do you think the implications of the virus spreading to the southern hemisphere over the balance of this year will be on trade, markets, etc.? (21:18)

Outlook
• About a week ago you said you expected the stock market to decline 30% from its highs. At that time it was down around 19%, and we’ve seen the market fall another 10 percentage points since then, putting it down almost 30% from the high. Have you revised your view or do you feel the sell-off has largely played itself out? (23:40)
• Most of our listeners are individual investors or advisors who diversify their assets widely across asset classes and styles, often using index funds and ETFs. Do you think this episode warrants a re-think of how they’ve approached asset allocation and investment selection? (27:03)

Closing
• Closing, disclosures, and outro (32:03)

(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 decision.)

Mar 23, 2020
Chuck Bath: The Evolution of a Value Investor
00:45:49

Editor's Note: The following interview with Chuck Bath, comanager of Diamond Hill Large Cap, was recorded on March 4, 2020. As such, it doesn't incorporate recent market volatility, and the manager's views and positions may have changed since the recording.

Our guest on the podcast is Chuck Bath, a portfolio manager who has logged a tremendous record over nearly 40 years. Since 2002, Bath has been manager of Diamond Hill Large Cap, a $6 billion fund that earns a Morningstar Analyst Rating of Gold. He is assistant portfolio manager for Bronze-rated Diamond Hill Long-Short.

Prior to joining Diamond Hill, he steered Nationwide Fund to outstanding returns during 17 years at the helm. An accountant by training, Bath uses a patient value-oriented approach, seeking out companies with above-average returns on capital that are trading below his estimates of intrinsic value.

Background
Chuck Bath bio

Diamond Hill Large Cap DHLAX

Diamond Hill Long-Short DIAMX 

Diamond Hill blog

"Diamond Hill: Accounting for Taste," by Lawrence Strauss, Barron's, Dec. 12, 2015. 
 

Strategy and Portfolio 

"Permanent Change Versus Long-Term Fundamentals," by Chuck Bath, March 10, 2020. 

Diamond Hill Intrinsic Value Estimator

Security Analysis, by Benjamin Graham and David Dodd. 

Warren Buffett on Durable Competitive Advantage, April 21, 2018. 

"Valuing U.S. Equities: A Historical Perspective," by Chuck Bath, Austin Hawley, and Nate Palmer, as presented at the CFA Institute Financial Analysts Seminar in Chicago, Sept. 26, 2014. 

International Business Machines

Microsoft

Walmart

Amazon.com

Abbott Laboratories

Procter & Gamble

Eastman Chemical

Alphabet

"State AGs, Justice Department Discuss Google Antitrust Probe," by Diane Bartz, Reuters, Feb. 4, 2020.

Chevron

Norfolk Southern

Parker Hannifin

Peter Lynch

Jeffrey Vinik

John Neff

Robert Sanborn

Citigroup

Charles Schwab Corp

"The Charles Schwab-TD Ameritrade Merger Shocked Wall Street. Why It Had to Happen," by Lisa Beilfuss and Daren Fonda, Barron's, Dec. 16, 2019. 


Organization/Succession

"Diamond Hill Announces Addition of Austin Hawley as Co-Portfolio Manager on Large-Cap Strategy," Dec. 18, 2017. 

"Channeling His Inner Buffett," by Marla Brill, Financial Advisor, Dec. 2, 2019. 

Mar 18, 2020
Lawrence Hamtil: The Virtues of Sin (Stocks)
00:51:29

Our guest this week is Lawrence Hamtil. Lawrence is a principal at Fortune Financial Advisors, an independent Registered Investment Advisor firm he co-founded in 2008. He provides financial advice and investment management services to the firm’s high-net-worth clients. Lawrence came to our attention on social media, where he can be found on twitter at @lhamtil. A prolific researcher and excellent writer, Lawrence frequently publishes investments research and commentary on Fortune Financial’s blog. His research has covered a lot of ground, but a few topics have gained him a following, including his work on the role of sectors and industries in explaining stocks returns; the low-volatility phenomenon; sin stocks; equal-weighted portfolios; and more. Lawrence is a graduate of Rockhurst University..

Background and Influences

Lawrence Hamtil bio 

Fortune Financial advisor blog 

Lawrence Hamtil’s twitter account @lhamtil 

“Contrarian Investment Ideas” by David Dreman; May 18, 1998

“Common Stocks and Uncommon Profits” by Phil Fisher; Jan. 1, 1960 

Value Investing and Inflation

“Who Killed Value?” by William Bernstein; Efficient Frontier blog

“How Inflation Makes the Value Factor a Sector Bet” by Lawrence Hamtil; Fortune Financial blog; May 14, 2019

Equal-Weighting and Inflation

“The Inflation Advantage of Equal Weight” by Lawrence Hamtil; Fortune Financial blog; Aug. 28, 2018  

Sectors and Industries: Importance to Stock Returns

“Hedge Fund Contagion and Liquidity Shocks” by Nicole Boyson, Christof Stahel, and Rene Stulz; Journal of Finance, Volume 55, No. 5. October 2010.

Financial Advisor Conflicts

“Breaking Down 50 Years of Industry Data” by Lawrence Hamtil; Fortune Financial blog; Jan. 17, 2020 

“Is Risk a Function of Sector or Size?” by Lawrence Hamtil; Fortune Financial blog; Jan. 22, 2019 

“Is Risk a Function of Sector or Size? Part II” by Lawrence Hamtil; Fortune Financial blog; July 24, 2019 

“The Perils of Sector Bias” by Lawrence Hamtil; Fortune Financial blog; Oct. 29, 2018

“The Compelling Case for Mid Cap Stocks” by Lawrence Hamtil; Fortune Financial blog; June 27, 2019 

“Compendium of Posts on Investing in Emerging Markets” by Lawrence Hamtil; Fortune Financial blog; Aug. 15, 2019  

Low-Volatility Factor

“Compendium of Low Volatility Articles” by Lawrence Hamtil; Fortune Financial blog; July 22, 2019 

Andrew Miller’s Twitter account @millerak42  

Sin Stocks

“Casino Stocks and the Missing Sin Premium” by Lawrence Hamtil; Fortune Financial blog; Feb. 18, 2019 

“Virtue Is Its Own Reward: Or, One Man’s Ceiling Is Another Man’s Floor” by Cliff Asness; AQR; May 18, 2017

Mar 11, 2020
Nicole Boyson: How to Spot Financial Advisor Conflicts of Interest
00:59:35

Our guest this week is  Nicole Boyson. Boyson is the Patrick F. and Helen C. Walsh Research Professor at Northeastern University's D’Amore-McKim School of Business, where she teaches and conducts research in the areas of investments and corporate finance. Professor Boyson has authored numerous publications and referee journals, with a focus on regulatory arbitrage, hedge fund management, and hedge fund activism. She also recently published a provocative working paper on financial advisor conflicts of interest entitled, "The Worst of Both Worlds? Dual-Registered Investment Advisers." A certified public accountant, Professor Boyson serves on the Editorial Board of the Financial Analysts Journal. She received her bachelor's degree from Kent State University, her MBA from Case Western Reserve University, and her Ph.D. in Finance from Ohio State University. Professor Boyson is active on social media, where she can be found on Twitter at @nikir1.

Background and Influences

Nicole Boyson’s home page

Nicole Boyson’s Twitter profile @nikir1

Josh Brown’s Twitter profile @reformedbroker

Wes Gray’s Twitter profile @alphaarchitect

Max Schatzow’s Twitter profile @advisercounsel

Investment Company Institute (ICI) Fact Books  

Published Research: Hedge Fund Activism

“Corporate Governance and Hedge Fund Activism” by Nicole Boyson and Robert Mooradian; Review of Derivates Research, volume 14, no. 2, 2011  

“Activism Mergers” by Nicole Boyson, Nickolay Gantchev, and Anil Shivdasani; Journal of Financial Economics; Oct. 23, 2015  

Published Research: Female Hedge Fund Managers

“The Performance of Female Hedge Fund Managers” by Rajesh Aggarwal and Nicole Boyson; Review of Financial Economics; Feb. 3, 2016

Published Research: Hedge Funds and Contagion

“Hedge Fund Contagion and Liquidity Shocks” by Nicole Boyson, Christof Stahel, and Rene Stulz; Journal of Finance, volume 55, no. 5; October 2010

Financial Advisor Conflicts

Working Paper: “The Worst of Both Worlds? Dual-Registered Investment Advisers” by Nicole Boyson

“Report of the Committee on Compensation Practices” dated April 10, 1995

SEC Final Rule “Certain Broker-Dealers Deemed Not to Be Investment Advisers”

Rick Ferri’s website

“Ferri: There are No Average Investors,” The Long View podcast, July 3, 2019

SEC Investment Adviser Public Disclosure (IAPD) website

Financial Planning Association v. Securities and Exchange Commission

SEC Final Rule: “Regulation Best Interest: The Broker-Dealer Standard of Conduct”

SEC Share Class Selection Disclosure Initiative

“SEC Share Class Initiative Returning More Than $125 Million to Investors”  

Mar 04, 2020
Sallie Krawcheck: 'Companies Should Do Better'
00:46:34

Our guest on the podcast today been called one of the most powerful women in finance. Sallie Krawcheck started her career as an equity analyst at Sanford C. Bernstein, where her reputation for impartial advice and criticism of conflicts of advice in the financial-services sector prompted Fortune magazine to call her the last honest analyst. She later moved to Citigroup, where she served as CEO of the firm's Smith Barney unit, Citi's chief financial officer, and CEO of Citi's, Wealth Management Business. In the latter role, she was an early advocate of a fiduciary standard for the brokerage industry. She went on to Bank of America where she served as president of the firm's wealth management unit. Sallie is currently the CEO and co-founder of Ellevest, a digital financial advisor for women launched in 2016. She is also owner and chair of Ellevate Network, a global network of women committed to promoting gender equality in the workplace.


In the spirit of full disclosure, Morningstar Inc. invested in Ellevest in 2015 and 2019, and Morningstar Investment Management LLC, a subsidiary of Morningstar Inc. provides consulting services to Ellevest for their core portfolios.

Background

Sallie Krawcheck bio 

Ellevest 

Ellevate Network 


In Search of the Last Honest Analyst,” by David Rynecki, Fortune, June 10, 2002. 


BofA’s Krawcheck Backs a Fiduciary Standard,” InvestmentNews, April 20, 2010. 


When Citi Lost Sallie,” by Geraldine Fabrikant, The New York Times, Nov. 15, 2008. 


Sallie Krawcheck Wants to Take Women to the Top of Business,” by Abigail Jones, Newsweek, Dec. 23, 2014. 


Gender Pay Gap/Lifetime Earnings

The Narrowing, But Persistent, Gender Gap in Pay,” by Nikki Graf, Anna Brown, and Eileen Patten, Pew Research Center, March 20, 2019. 


How a Common Interview Question Hurts Women,” by Claire Cain Miller, The New York Times, May 1, 2018. 


Salary History Bans: A Running List of States and Localities That Have Outlawed Pay History Questions, HRdive.com, 2020.


Unlocking the Full Potential of Women in the U.S. Economy,” McKinsey & Company, 2011. 


Education and Lifetime Earnings, Social Security Administration. 


Women and Caregiving, Facts and Figures, Family Caregiver Alliance. 


The Trickle-Down Effect of Caregiving on Women,” by Kathleen Fitfield, AARP.org, Nov. 29, 2018. 


Older Women Workers and Economic Security,” U.S. Department of Labor Issue Brief. 


How to Stand Up for Paid Family Leave,” Ellevest.com, May 14, 2018.


How to Afford Parental Leave and Some Time Off,” by Sallie Krawcheck, Ellevest.com, Oct. 10, 2016.


Diversity in the Workplace/Gender Lens Investing

Gender lens investing definition 


Gender and Diversity Funds: Intentional Or Not?,” by Madison Sargis, Morningstar.com, April 15, 2019.

"2 Options for Gender-Lens Investing," by Jon Hale, Morningstar.com, March 2, 2017. 

Pax Ellevate Global Women’s Leadership Fund 


Why Diverse Teams Are Smarter,” by David Rock and Heidi Grant, Harvard Business Review, Nov. 4, 2016. 

Diverse Teams Feel Less Comfortable—And That’s Why They Perform Better,” by David Rock, Heidi Grant, and Jacqui Gray, Harvard Business Review, Sept. 22, 2016. 

New Research: Diversity + Inclusion = Better Decision-Making at Work,” by Erik Larson, Sept. 21, 2017. 


Women and Investing

Why Women Invest 40 Percent Less Than Men (and How We Can Change It),” by Jean Chatzky, Nbcnews.com, Sept. 25, 2018. 


Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment,” by Brad Barber and Terrence Odean, The Quarterly Journal of Economics, February 2001.  


What Does It Mean to Invest Intentionally?” by Sallie Krawcheck, Ellevest.com, Nov. 19, 2019.


Women Reach Their Peak Salaries 10 Years Sooner Than Men,” by Patricia Nilsson and Hannah Murphy, Financial Times, Sept. 19, 2018. 


Benefits Planner/Life Expectancy, Social Security Adminstration. 


Do Women Take As Many Risks As Men?,” by Doug Sundheim, Harvard Business Review, Feb. 27, 2013.


"Sallie Krawcheck: The Retirement Crisis Is a Gender Crisis, Too," Morningstar.com, July 11, 2015.


For Some Widows, Breaking Up with An Advisor Is Easy to Do,” by Ilana Polyak, Oct. 11, 2014. 


Women Put Financial Security at Risk by Deferring Long-Term Financial Decisions to Spouses, UBS Research Reveals,” UBS.com. 


What Women Want in  a Financial Advisor,” by Kerry Hannon, Forbes.com, May 13, 2018. 


Female Fund Manager Performance: What Does Gender Have to Do with It?” by Madison Sargis and Kathryn Wing, Morningstar.com, March 8, 2018. 


Fund Managers By Gender: The Global Landscape,” Morningstar. 


Fiduciary definition 


Let’s Demand Better from the Financial Services Industry,” by Sallie Krawcheck, Ellevest.com, Sept. 20, 2019. 


How Wall Street Keeps #MeToo Claims Out of the Spotlight,” by Rob Copeland, Liz Hoffman, and Rachel Louise Ensign, The Wall Street Journal, Jan. 19. 2018. 

Wall Street Has Been Unscathed by MeToo. Until Now,” by David Gelles, The New York Times, March 16, 2019. 


My Best Career Advice ... Isn’t Career Advice,” by Sallie Krawcheck, Ellevest.com, Nov. 12, 2019. 

Feb 26, 2020
Annamaria Lusardi: 'Financial Education Works'
00:50:30

Our guest on the podcast is Annamaria Lusardi, an authority on financial literacy and financial education. Lusardi is the Denit Trust Distinguished Scholar and Professor of Economics and Accountancy at the George Washington University School of Business, where she also serves as the academic director of the Global Financial Literacy Excellence Center. Prior to joining George Washington University, she taught at Dartmouth College for 20 years. She has also taught at Princeton University, the University of Chicago Harris School of Public Policy, the University of Chicago Booth School of Business, and Columbia Business School. She received her doctorate from Princeton.

Background

Annamaria Lusardi bio 

Annamaria Lusardi curriculum vitae 

Annamaria Lusardi publications 

Financial Literacy

"The Economic Importance of Financial Literacy: Theory and Evidence," by Annamaria Lusardi and Olivia S. Mitchell, Journal of Economic Literature, 2014. 

"A Financial Literacy Test That Works," by Annamaria Lusardi and Olivia S. Mitchell, Forbes, Dec. 14, 2017. 

The 2019 TIAA Institute-GFLEC Personal Finance Index 

"Financial Literacy and Wellness Among African-Americans," by Paul J. Yakoboski,  Annamaria Lusardi, and Andrea Hasler, Global Financial Literacy Excellence Center. 

"Financial Literacy and Retirement Planning in the United States," by Annamaria Lusardi and Olivia S. Mitchell, Journal of Pension Economics & Finance, October 2011. 

Financial Literacy Around the World: An Overview," by Annamaria Lusardi and Olivia S. Mitchell, Journal of Pension Economics and Finance, October 2011. 

Implications of Financial Illiteracy

"Optimal Financial Knowledge and Wealth Inequality," by Annamaria Lusardi, Pierre-Carl Michaud, and Olivia S. Mitchell, The National Bureau of Economic Research, January 2013. 

"Financial Literacy and Stock Market Participation," by Maarten van Rooij, Annamaria Lusardi, and Rob Alessie, The National Bureau of Economic Research, October 2007. 

"National Financial Capability Study," Finra Investor Education Foundation, December 2019. 

Financially Fragile Households: Evidence and Implications,” by Annamaria Lusardi, Daniel J. Schneider, and Peter Tufano, The National Bureau of Economic Research, May 2011. 

"Financial Literacy and Planning: Implications for Retirement Wellbeing," The National Bureau of Economic Research, by Annamaria Lusardi and Olivia S. Mitchell, May 2011.

Financial Education

"Are States Providing Adequate Financial Literacy Education?" by Matt Kasman, Benjamin Heuberger, and Ross A. Hammond, Brookings, Oct. 3, 2018.  

"Five Steps to Planning Success. Experimental Evidence From U.S. Households," by Aileen Heinberg, Angela A. Hung, Arie Kapteyn, Annamaria Lusardi, Anya Savikhin Samek, and Joanne Yoong, The National Bureau of Economic Research, June 2014. 

"John Lynch: Rethinking Financial Education," The Long View podcast, Morningstar.com, Dec. 11, 2019. 

"Financial Literacy, Financial Education, and Downstream Financial Behaviors," by Daniel Fernandes, John G. Lynch, and Richard G. Netemeyer, Management Science, Jan. 6, 2014. 

"Ariel Community Academy Students Are Investing on Wall Street by Fourth Grade," by Rodney Brooks, The Undefeated, Oct. 18, 2017.  

Feb 19, 2020
Jeff Levine: Cracking the New Retirement Code
00:56:37

Our guest this week is tax and retirement planning expert, Jeffrey Levine. Jeff is director of advisor education at Kitces.com, home of the popular Nerd's Eye View blog. He's also the CEO and director of financial planning for BluePrint Wealth Alliance. Previously, Jeff served as chief retirement strategist at Ed Slott and Company. He has authored several books including, The Baby Boomer's Guide to Savvy IRA Planning, The Financial Advisor's Guide to Savvy IRA Planning, and The Definitive Guide to Required Minimum Distributions for Baby Boomers. Jeff is a frequent public speaker and media commentator, and he maintains a high profile on social media and on the Nerd's Eye View blog, where he readily shares tax and retirement planning insights.


Background

Jeffrey Levine bio 


Kitces.com 


Blueprint Wealth Alliance 


Jeffrey Levine on Twitter: @CPAPlanner


SECURE Act: Stretch IRA

SECURE Act text 

Stretch IRA definition 

SECURE Act And Tax Extenders Creates Retirement Planning Opportunities and Challenges,” by Jeffrey Levine, Kitces.com, Dec. 23, 2019. 


Navigating the Secure Act: What Retirement Savers Need to Know to Optimize Their 401(k)s and IRAs,” by Reshma Kapadia, Barron’s, Dec. 20, 2019. 


New Retirement Law Throws IRA Heirs a Curveball,” by Mark Miller, Morningstar.com, Jan. 21, 2020. 


Inheriting a Parent’s IRA or 401(k)? Here’s How the Secure Act Could Create a Disaster,” by Alessandra Malito, MarketWatch, Jan. 9, 2020. 


Who Should Consider a Roth Conversion Under the SECURE Act?,” by Liz Weston, MarketWatch, Feb. 1, 2020. 


The Stretch IRA Strategy Is Largely Gone. Here Are 5 Alternatives to Consider,” by Cheryl Winokur Munk, Barron’s, Feb. 8, 2020. 


Charitable trust definition 


SECURE Act: RMD Age Change

Required minimum distribution definition  

IRA Required Minimum Distribution Worksheet 

How Required Minimum Distribution (RMD) Changes Under The SECURE Act Impact Retirement Accounts,” by Jeffrey Levine, Kitces.com, Jan. 8, 2020. 

Why the SECURE Act Makes 2020 the Year of Missed RMDs from IRAs,” by Jamie Hopkins, Forbes.com, Dec. 18, 2019. 


Could Later RMDs Lower Your Tax Bill?” by Christine Benz, Morningstar.com, Feb. 3, 2020. 


Updated Life Expectancy and Distribution Period Tables Used for Purposes of Determining Minimum Required Distributions,” (proposed rule by the IRS), IRS.gov, Nov. 8, 2019.

SECURE Act: Qualified Charitable Distributions

How to Reduce Your Taxes and AGI by Giving to Charity,” by Mark P. Cussen, Investopedia.com, Jan. 16, 2020.


Coordinating QCDs with Post 70 1/2 IRA Contributions Under the SECURE Act,” by Jeffrey Levine, Kitces.com, Jan. 22, 2020. 


Tax Cuts and Jobs Act of 2017 


Adjusted gross income definition 


SECURE Act: Traditional IRA Contributions After 72

The Kaye Bailey Hutchison Spousal IRA Receives Congressional Agreement,” by Beverly DeVeny, irahelp.com, Aug. 9, 2013. 


SECURE Act: Open MEPs

Could Multiple-Employer Plans Be a Game Changer for Retirement Security?” by Aron Szapiro, Morningstar.com, Dec. 19, 2019. 


Secure Act’s MEP Changes Are a Game Changer for 2020,” by Robert Bloink and William H. Byrnes, ThinkAdvisor, Jan. 8, 2020. 


The New American Retirement Plan,” by John Rekenthaler, Morningstar.com, Jan. 14, 2020. 


Replacing 401(k) Plans: Further Thoughts,” by John Rekenthaler, Morningstar.com, Jan. 21, 2020. 

SECURE Act: Annuities in Company Retirement Plans

"What the SECURE Act Means for Annuities," by Jamie Hopkins, InvestmentNews, Dec. 17, 2019.

Security Act’s 401(k) Annuity Options: The Pros and Cons,” by William H. Byrnes and Robert Bloink, ThinkAdvisor, Jan. 14, 2020.  

Feb 12, 2020
Ben Carlson: How Not to Get Scammed
00:46:40

Our guest this week is Ben Carlson, the director of institutional asset management at Ritholtz Wealth Management. A prolific and insightful writer, Carlson frequently publishes pieces on investing, personal finance, and other topics on his popular blog, A Wealth of Common Sense. In addition, he co-hosts the Animal Spirits podcast with his colleague Michael Batnick and is active on social media, including Twitter, where he can be found @awealthofcs. A CFA charterholder and graduate of Grand Valley State University, Carlson has authored several books, including A Wealth of Common Sense and Organizational Alpha. In today's episode, we'll be discussing Carlson's most recently published book, Don't Fall for It: A Short History of Financial Scams.

Background

Ben Carlson bio 

A Wealth of Common Sense blog 

Michael Batnick bio 

Animal Spirits podcast 

Ritholtz Wealth Management 

Don't Fall for It: A Short History of Financial Scams, by Ben Carlson

Scams: Victims and Perpetrators

Nigerian prince scam 

Annals of Gullibility: Why We Get Duped and How to Avoid It, by Stephen Greenspan 

Charles Ponzi bio 

Bernie Madoff bio 

John R. Brinkley bio 

The Wisdom of Psychopaths: What Saints, Spies, and Serial Killers Can Teach Us About Success, by Kevin Dutton

"Troubles at Atlanta Hedge Fund Snare Doctors, Football Players" by Ian McDonald and Valerie Bauerlein, The Wall Street Journal, March 9, 2006.

William J. Bernstein: "The wealthy are different than you and I: They have many more ways of having their wealth stripped away." The Four Pillars of Investing: Lessons for Building a Winning Portfolio, Chapter 7, Page 179.

"How Did Spike Lee Convince Michael Jordan to Help Fund His Malcolm X Film?" by Gene Marks, Entrepreneur, Feb. 28, 2019.

"Johnny Depp Spends $200,000 a Month on a Private Jet and $30,000 on Wine--Here's How Else He Blows His Fortune," by Emmie Martin, CNBC.com, Aug. 31, 2017. 

Enough: True Measures of Money, Business, and Life, by John C. Bogle

"South Sea Bubble Short History," Harvard Business School

Railway mania 

"Fraudster Poses as Jason Statham to Steal Victim's Money," by Andy Bell and Dan Box, BBC News, April 29, 2019. 

Ulysses S. Grant bio 

"Lessons From the General," by Michael Batnick, The Irrelevant Investor, Dec. 12, 2017. 

Feb 05, 2020
Will Danoff: Succeeding at Scale
01:01:12

Our guest this week is Will Danoff. Will runs a number of Fidelity equity strategies, best known of which is Fidelity Contrafund, a mutual fund he has been managing since September 1990. During his nearly three-decade tenure at Contrafund, Will has trounced the market indexes and, even more remarkably, managed to maintain the fund's performance at scale. Indeed, Contrafund was recently home to more than $120 billion in assets and has ranked among the world's largest funds for many years. For his accomplishments, Morningstar named Will its Domestic-Stock Manager of the Year in 2007. Prior to becoming a portfolio manager, Will served as a retail analyst at Fidelity and for a time as assistant portfolio manager at Fidelity Magellan. He's a graduate of Harvard University and earned his MBA at the Wharton School of the University of Pennsylvania. We're thrilled to have him as our guest.

Background

Will Danoff bio

Fidelity Contrafund

Inspirations

“Letters”, Fidelity Investments TV commercial 

Peter Lynch bio

Meetings with Management

Nelson Peltz bio

Idea Generation

Salesforce Dreamforce conference

Joel Tillinghast

Fidelity Low-Priced Stock

Circle of Competence

Michael O’Leary, Michael Cawley bios

Portfolio Construction

Corporate profit margins

Investing in Private Firms

Securities and Exchange Commission’s “Investment Company Liquidity Risk Management Program” 

Jan 29, 2020
Jon Hale: ESG Is a Paradigm Shift
00:52:27

Our guest this week is Jon Hale, Morningstar's head of sustainability research. In that role, he directs our research into the environmental, social, and governance investing practices of mutual funds and exchange-traded funds. An incisive analyst and writer, Hale authors the biweekly "Sustainability Matters" column on Morningstar.com. He's regularly quoted by the media on ESG matters and speaks often on sustainable investing at industry conferences and other events. Prior to assuming his current role, Hale held a number of other leadership positions in Morningstar's research and investment management divisions, most recently serving as head of manager research in North America. Hale, who holds the Chartered Financial Analyst designation, earned his undergraduate degree at the University of Oklahoma and his doctorate at Indiana University. We're pleased to have him as our guest.

Background

Jon Hale bio 

"Sustainability Matters" columns

Hale's "The ESG Advisor" blog 

Morningstar's Approach to Assessing ESG

Morningstar Sustainability Rating methodology

Sustainalytics 

Investor Interest and Demand

"Sustainable Fund Flows in 2019 Smash Previous Records," by Jon Hale, Morningstar.com, Jan. 10, 2020.

Morgan Stanley's "Sustainable Signals" survey

Other

Sustainability Accounting Standards Board (SASB)

TIAA-CREF Social Choice Bond TSBRX

Jan 22, 2020
Chris Mamula: What Young Retirees Need to Know
00:41:43

Our guest on the podcast today is Chris Mamula. Chris blogs on the website, "Can I Retire Yet?" and he has also cowritten a book called Choose FI: Your Blueprint to Financial Independence, which was published in 2019. Chris is loosely part of the FIRE, or Financial Independence Retire Early, movement, but he brings a fresh perspective to the concept. He retired from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, do-it-yourself investing, financial planning, early retirement, and lifestyle design.

Background

Can I Retire Yet?

Choose FI: Your Blueprint to Financial Independence, by Chris Mamula, Brad Barrett, and Jonathan Mendonsa. 

FIRE Movement

FIRE Movement

"Your Questions about FIRE, Answered," by Steven Kurutz, The New York Times, Sept. 11, 2018. 

Lifestyle and Personal Considerations

 

"Nearly 2 Years into Early Retirement, Here’s All That I’ve Gotten Wrong," by Chris Mamula, marketwatch.com, Aug. 19, 2019.  

A Strong Marriage in Retirement,” by Darrow Kirkpatrick, Can I Retire Yet?, March 19, 2017. 

"Does Fire Make Life Harder?," by Chris Mamula, Can I Retire Yet?, Dec. 10, 2018. 

A Week in the Life of a Fire Household,” by Chris Mamula, Can I Retire Yet?, Sept. 17, 2018. 

Healthcare Coverage for Early Retirees

Navigating ACA Tax Credits to Purchase Affordable Health Insurance,” by Chris Mamula, Can I Retire Yet?, Nov. 12, 2018.


 

 

How to Qualify for Affordable Care Act (‘Obamacare’) Premium Subsidies,” by Mike Piper, Oblivious Investor.


 

 

Are Health Care Sharing Ministries a Viable Alternative to Health Insurance for Early Retirement?” by Chris Mamula, Can I Retire Yet?, Nov. 19, 2018.


 

 

Health care sharing ministry, Wikipedia. 

Do You Plan to Retire by 50? Great, But Can You Cover Your Health Care?” by Janna Herron, USA Today, June 4, 2019. 

Investing and Withdrawal Rates 

Bogleheads website


 

 

Jim Collins blog

"The Safe Withdrawal Rate Series: A Guide for First-Time Readers," Early Retirement Now.


 

 

Stock Series, jlcollinsnh.com


 

 

The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life, by J.L. Collins.

Retirement Saving and the Empty Nest Transition,” by Michael Kitces, kitces.com, May 25, 2016. 

"The Stages of Financial Independence," by Chris Mamula, Can I Retire Yet?, Sept. 23, 2019,

The Problem with FIREing at 4% and the Need for Flexible Spending Rules,” by Michael Kitces, Kitces.com, July 23, 2019. 

The 25X Rule to Early Retirement,” by Rob Berger, Forbes.com, Feb. 23, 2017. 

 

Human capital definition, Investopedia 

Going Back to Work,” by Chris Mamula, Can I Retire Yet?, July 22, 2019. 

Mr. Money Mustache

Jan 15, 2020
John Rekenthaler: Fund Manager Financial Incentives Are Irrelevant
00:51:39

Our guest this week is John Rekenthaler. Rekenthaler is a director in Morningstar Research Services and a feature contributor to our platforms, including Morningstar.com. A lucid thinker and brilliant writer, his popular "Rekenthaler Report" column has become a must read among investors, financial advisors, fund industry participants, and beyond.

Rekenthaler began his career at Morningstar in 1988 and has worn a number of hats, including leadership roles in our research and investment management divisions. Among other achievements, Rekenthaler has been a key player in developing some of Morningstar's best-known tools, including the Morningstar Rating for funds and the Morningstar Style Box. He holds a bachelor's degree in English from the University of Pennsylvania and a master's degree in business administration from the University of Chicago Graduate School of Business.

Background

The Rekenthaler Report

Morningstar Rating for funds methodology

Morningstar Style Box methodology

Investor Behavior 

Morningstar's Mind the Gap study

Rekenthaler Report: "Mutual Funds: Where Fun Came to Die"

Rekenthaler Report: "3 Reasons Index Investors Deserve Perdition (or Not)"

Rekenthaler Report: "Up-Front Investment Fees Are (Almost) No More"

Incentives

Rekenthaler Report: "Give Performance Fees a Chance"

How John Invests

Rekenthaler Report: "What's in My Portfolio?"

Most and Least Popular Columns

Rekenthaler Report: "Enough with Revenue Sharing!"

Rekenthaler Report: "About that Rigging Claim"

Flash Boys: A Wall Street Revolt, by Michael Lewis, March 2014.

Compelling Academic Research

Rekenthaler Report: "Predicting Mutual Fund Returns With the Ownership Lens"

"Judging Fund Managers by the Company They Keep," by Randolph Cohen, Joshua Coval, and Lubos Pastor; NBER Working Paper No. 9359, December 2002.

The State of Retirement

Rekenthaler Report: "The Retirement Crisis That Isn't?"

Teresa Ghilarducci

"A Perplexing Tale About 401(k)s," by Scott Cooley; Morningstar.com, Nov. 26, 2015.

Rekenthaler Report: "The British Show How to Improve 401(k)s"

Best and Worst Innovations

Rekenthaler Report: "Why ETFs Succeeded for Retail Investors"

Rekenthaler Report: "Tactical-Allocation Funds: Even Worse Than Expected"

Jack Bogle

Rekenthaler Report: "Jack Bogle Strikes Back!"

Rekenthaler Report: "Jack Bogle's (Somewhat) Accidental Legacy"

Corporate Governance

"Anticompetitive Effects of Common Ownership," by Jose Azar, Martin Schmalz, and Isabel Tecu; Journal of Finance, May 2018.

Rekenthaler Report: "Are Index Funds Too Soft on CEOs?"

Rekenthaler Report: "The Latest Salvo Against Indexing"

Rekenthaler Report: "The Doctrine of Shareholder Value Has Indeed Helped Shareholders"

Albert J. "Chainsaw Al" Dunlap  bio

What John Reads

Berkshire Hathaway shareholder letters

Joe Mansueto bio

Reflections on Investing

Rekenthaler Report: "My Investment Howler"

Jan 08, 2020
The Best of The Long View Podcast: Conversations with Financial Advisors and Retirement Researchers
00:31:50

On this week’s episode of The Long View, we’ll recap some of our favorite moments from the podcast so far. 

Since the podcast’s launch in May 2019, we’ve had the chance to talk to some of the best portfolio managers, retirement researchers, and financial planners and advisors in the business. It’s been a treat to spend an hour each week chatting with them, and we’ve learned a great deal from each of the interviews. 

Last week’s episode included highlights from our interviews with portfolio managers. This week, we’ll feature some of our favorite clips from interviews with financial planners, advisors, and retirement researchers.

William Bernstein: 'If You've Won the Game, Quit Playing'

Jonathan Clements: 'It's in Wall Street's Interest to Make Everyday Investors Think That They Are Stupid'

Allan Roth: 'I Embrace Dumb Beta'

Josh Brown: 'Standardize the Process, Personalize the Advice'

Carolyn McClanahan: 'There's More to Money Than Just Numbers'

Sheryl Garrett: 'The Industry Thought I Was Nuts'

David Blanchett: 'If You're Retiring Now You're in a Pretty Rough Spot'

Michael Finke: Here's What Makes Retirees Happy

Archive of all Long View episodes so far

Dec 30, 2019
The Best of The Long View Podcast: Conversations with Portfolio Managers
00:41:39

On this week’s episode of The Long View, we recap some of our favorite moments from the podcast so far.

Since the podcast’s launch in May 2019, we’ve had the chance to talk to some of the best portfolio managers, retirement researchers, and financial planners and advisors in the business. It’s been a treat to spend an hour each week chatting with them, and we’ve learned a great deal from each of the interviews. 

This week’s episode includes highlights from our interviews with portfolio managers and investment strategists. Next week, we’ll feature some of our favorite clips from interviews with financial planners, advisors, and retirement researchers.

Bill Nygren: 'A Stock That Doesn't Look Cheap on the Surface Might Be One of the Cheapest'

Rob Arnott: Don't Sleep on Value Investing (Especially Emerging-Markets Value)

Rupal Bhansali: FAANG Stocks Are 'Extremely Risky'

Dan Ivascyn: Building a Portfolio to Bend but Not Break

Ben Johnson: Index Funds Are Not 'Zombie Investors'

Dana Emery: You're Not Getting a Valuation Discount for Free

Dennis Lynch: 'Have a Growth Mindset and Be Willing to Learn New Things'

Charles de Vaulx: Why Value Investing Has Slumped but Will Rebound

 

Dec 23, 2019
Moira Somers: How to Give Financial Advice That People Will Actually Take
00:50:40

Our guest on the podcast today is Dr. Moira Somers,  a clinical neuropsychologist and professor. She’s also author of the book Advice That Sticks: How to Give Financial Advice That People Will Follow, published in 2018. Dr Somers’ expertise is in brain functioning, behavior change, and mental health, topics that she often discusses in the context of financial advice. She’s a frequent public speaker and also consults with advisors on improving their client outcomes. 

Dr. Somers is a senior faculty member with the Sudden Money Institute, where she trains advisors and conducts research into the psychological factors at play during major life transitions. 

Background

Moira Somers' biography 

Moira Somers' website 

Somers, M. 2018. Advice That Sticks: How to Give Financial Advice That People Will Follow (London: Practical Inspiration Publishing).

Improving Client Adherence

Behavioral finance definition 

Martin, L., Williams, S.L., Haskard, K.B., et al. 2005. “The Challenge of Patient Adherence.” Therapeutics and Clinical Risk Management, Vol. 1, No. 3, P. 189. 

Somers, M. “Does Your Advice Stick?Journal of Financial Planning, May 2018.

Stone, G.C. 1979. “Patient Compliance and the Role of the Expert.” Journal of Social Issues, Winter. 

Financial Jargon Your Advisor May Throw at You,” CNBC.com, Oct. 8, 2012. 

Beerens, M. 2019. Listening, Empathy and Personal Attention Go A Long Way in Client Acquisition and Retention.” Investors Business Daily, Nov. 4, 2019. 

Lee, B.Y. 2018. “11 Seconds: How Long Your Doctor Waits Before Interrupting You." Forbes.com, July 22, 2018. 

Jung, D. 2019. “Nudge Action: Overcoming Decision Inertia in Financial Planning Tools.” BehavioralEconomics.com, March 12, 2019.

Benartzi, S. 2017. How Digital Tools and Behavioral Economics Will Save Retirement.” Harvard Business Review, Dec. 7, 2017.

Raihani, N. 2013. Nudge Politics: Efficacy and Ethics.” Frontiers in Psychology, Vol. 4, P. 972. 

Eisenberg, R. 2013. To Solve the U.S. Retirement Crisis, Look to Australia,” Forbes.com, Aug. 19, 2013. 

Frankenfield, J. 2019. What Is a Robo-Advisor?Investopedia.com, Oct. 1, 2019. 

Knudge.com 

Touchstone Pathway 

Gamification definition 

Kahneman, D. 2011. Thinking, Fast and Slow.

Dec 18, 2019
John Lynch: Rethinking Financial Education
00:44:48

Background


John Lynch bio 


John Lynch research 


Center for Research on Consumer Financial Decision Making 

Academic Research Council, Consumer Financial Protection Bureau 

Financial Education

Fernandes, Lynch, J.G., & Netemeyer, R.G. 2013. Financial Literacy, Financial Education, and Downstream Financial Behaviors.” forthcoming in Management Science.

Examining Financial Education: How Literacy and Interventions Affect Financial Behaviors,” National Endowment for Financial Education, 2014. 

Financial Literacy: Just-in-Time Is the Ticket,” Christine Benz and John Lynch, Morningstar.com, March 12, 2016. 


Thaler, R. 2013. Financial Literacy: Beyond the Classroom.” The New York Times, Oct. 5, 2013. 


Kitces, M. 2016. “Financial Literacy Effectiveness and Providing Just-in-Time Training by Financial Advisors.” Nerd’s Eye View, Sept. 21, 2016. 


Ward, A.F. & Lynch, J.G. 2019. “On a Need-to-Know Basis: How the Distribution of Responsibility Between Couples Shapes Financial Literacy and Financial Outcomes.” Journal of Consumer Research, Vol. 45, No. 5, P. 1013. 

Retirement Planning and Financial Outcomes

Sammer, J. “Retirement Plans Are Leaking Money. Here’s Why Employers Should Care.” Society of Human Resources Management, Oct. 17, 2017. 


Nudge theory definition 

Thaler, R. & Sunstein C. 2008. “Nudge: Improving Decisions About Health, Wealth, and Happiness" (New Haven: Yale University Press).


Wright, O. 2013. How Organ Donation Is Getting Nudge in the Right Direction.” The Independent, Dec. 24, 2013. 

How America Saves,” Vanguard, 2019. 

Financial Decision-Making and Well-Being

Four-Year Myth,” Lumina Foundation.

Hunter, W.G., Zhang, C.Z., Hesson, A., et al. 2016. What Strategies Do Physicians and Patients Discuss to Reduce Out-of-Pocket Costs? Analysis of Cost-Saving Strategies in 1,755 Outpatient Clinic Visits.” Society for Medical Decision Making, Vol. 36, No. 7, P. 900. 


Netemeyer, R., Warmath, D., Fernandes, D. & Lynch. J. 2017. How Am I Doing? Financial Well-Being, Its Potential Antecedents, and Its Relation to Psychological/Emotional Well-Being.” Advances in Consumer Research, Vol. 45, P. 780. 


Complaint Snapshot: Debt Collection,” Consumer Financial Protection Bureau, May 2018. 


Nova, A. 2019. “A $1,000 Emergency Would Push Many Americans Into Debt,” CNBC.com, Jan. 23, 2019. 

 

Dec 11, 2019
Gus Sauter: Efficient Markets Are a Good Thing
01:01:35
Dec 04, 2019
Jeffrey Brown: Saving for Retirement 'Only Half the Puzzle'
00:55:36

Our guest on the podcast today is Dr. Jeffrey Brown, the Josef and Margot Lakonishok Professor and the Dean of the University of Illinois Gies College of Business. A key focus of Dean Brown's research is how to create sustainable retirement income, including the role of annuities, Social Security, 401(k)s, pensions and long-term care planning. He's a research affiliate at the National Bureau of Economic Research, a faculty affiliate of the Institute on Government and Policy Affairs, and a fellow at the TIAA Institute. He also serves as a trustee for TIAA. In addition, he served on the Social Security Advisory Board under President George W. Bush and was also a senior economist at the White House Council of Economic Advisers. He has published extensively on the topic of retirement security and public and private insurance markets, and he has received numerous awards for his research as well. He holds a Ph.D. in economics from MIT, and a master's in public policy from Harvard.

Background

Jeffrey Brown bio

Jeffrey Brown C.V. 

Jeffrey Brown publications and working papers 

 

Defined Contribution (DC) Plans

Defined contribution plan definition 

Defined benefit plan definition 

A Brief History of the 401(k), Which Changed How Americans Retire,” by Kathleen Elkins, CNBC.com, Jan. 4, 2017.

The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers,” by Barbara A. Butrica, Howard M. Iams, Karen E. Smith, and Eric J. Toder, Social Security Bulletin, Vol. 69, No. 3, 2009.

What Killed Pensions,” by Mary Beth Franklin, Kiplinger, Oct. 6, 2011.

Public Pensions Are Still Marching to Their Death,” by Jeffrey Dorfman, Forbes.com, Sept. 11, 2014.

House Passes SECURE Act to Ease 401(k) Compliance, Promote Savings,” by Stephen Miller, SHRM.org, May 23, 2019.

How the SECURE Act Would Impact Your 401(k),” by Simon Moore, Forbes.com, June 25, 2019.

Annuities in 401(k)s Won’t Solve the Retirement Crisis. Here’s Why,” by Mary Romano, Barron’s, June 28, 2019.

What Does It Mean to Annuitize?” by Justin Pritchard, Thebalance.com, Jan. 21, 2019.

Crash Course Needed: Four Out of Five Americans Fail When Quizzed on How to Make Their Nest Eggs Last,” by The American College for Financial Planning, Dec. 3, 2014.

401(k) Nudges and Course Corrections,” by Kimberly Blanton, Squared Away blog, Oct. 24, 2017.

Thank Richard Thaler for Your Retirement Savings,” by Ben Steverman, Bloomberg, Oct. 10, 2017.

Plan Quality Varies Significantly by Industry,” by John Manganaro, PlanAdviser, March 20, 2017.

Corporate Profits and 401(k) Plan Performance Go Hand in Hand: T. Rowe Price,” by Michael S. Fischer, ThinkAdvisor, Sept. 17, 2018.

“The Conundrum of State-Run Retirement Plans,” by Terry Dunne, InvestmentNews, May 8, 2017.

Reasons to Be Wary of State-Run Retirement Plans,” by Jeffrey Brown, Forbes.com, Feb. 10, 2014.

Multiple Employer Plan (MEP) definition

How Hard Should We Push the Poor to Save for Retirement?” by Andrew G. Biggs, The Journal of Retirement, Spring 2019.

Thrift Savings Plan 
 


Annuities

Use Annuities to Protect Yourself from Yourself,” by Jeffrey Brown, Forbes.com, May 22, 2014.

Income Annuities Provide Retirees Longevity Protection,” by Wade Pfau, Investment News, Sept. 28, 2019.

Why Don’t People Insure Late-Life Consumption? A Framing Explanation of the Under-Annuitization Puzzle,” by Jeffrey R. Brown, Jeffrey R. Kling, Sendhil Mullainathan, and Marian V. Wrobel, National Bureau of Economic Research, January 2008.

Variable annuity definition

Equity-indexed annuity definition

Deferred payment annuity definition

The Main Types of Annuities Made Easy,” by Clair Boyte-White, Investopedia, July 27, 2019.

Annuities and Inflation Risk,” by Robert Bloink and William H. Byrnes, ThinkAdvisor, Sept. 3, 2011.

Lifetime Income for Women: A Financial Economist’s Perspective,” by David F. Babbel, Wharton Financial Institutions Center Policy Brief, Aug. 12, 2008.

Jeff Brown Tackles Tough Annuity Questions,” by Michael Finke, ThinkAdvisor, Sept. 29, 2014.

Annuities and Individual Welfare,” by Thomas Davidoff, Jeffrey Brown, and Peter Diamond, The Center for Retirement Research at Boston College, May 2003.

Behavioral Impediments to Valuing Annuities: Complexity and Choice Bracketing,” by Jeffrey R. Brown, Arie Kapteyn, Erzo F.P. Luttmer, Olivia S. Mitchell, and Anya Samek. National Bureau of Economic Research, Oct. 11, 2019.

Intertemporal choice definition 
 


Long-Term Care

Does Medicare Cover Long-Term Care?” Medicare.com

"Insuring Long-Term Care in the U.S.," by Jeffrey Brown and Amy Finkelstein, National Bureau of Economic Research, September 2011.

The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market,” by Jeffrey R. Brown and Amy Finkelstein, National Bureau of Economic Research, October 2004.

Can Increasing The Long-Term Care Insurance Elimination Period Make Coverage Appealing Again?” by Michael Kitces, Nerd’s Eye View, Jan. 7, 2015.

Long-Term Care Financing Project

Hybrid Long-Term Care Policies,” by Wade Pfau, Forbes.com, Jan. 21, 2016.

“Is the LTC Cost Guarantee of Today's Hybrid Life/LTC or Annuity/LTC Insurance Policies Just a Mirage?” by Michael Kitces, Nerd’s Eye View, Oct. 16, 2013.

Life-LTC Hybrid Sales Level Off: LIMRA,” by Allison Bell, ThinkAdvisor, July 22, 2019. 
 


Social Security

Social Security Trustees’ Summary Report, 2019.

How Would You Fix Social Security?” The Center for Retirement Research at Boston College.

How the Latest Report on Social Security’s Solvency Changes Your Retirement Plan,” by Bob Carlson, Forbes.com, May 24, 2019.

Nov 27, 2019
Charles de Vaulx: Why Value Investing Has Slumped but Will Rebound
00:58:20

Our guest on the podcast this week is Charles de Vaulx. De Vaulx is chief investment officer and portfolio manager at International Value Advisers, where he is also a partner. With his colleague Chuck de Lardemelle, de Vaulx manages the IVA International and IVA Worldwide strategies. Before joining IVA in 2008, de Vaulx had been the portfolio manager of First Eagle Global, First Eagle Overseas, First Eagle U.S. Value, and First Eagle Variable. For his accomplishments, Morningstar has recognized de Vaulx several times in the past, awarding him and his comanager our International-Stock Manager of the Year Award in 2001 and nominating them for the same award in 2006. De Vaulx began his career at Societe Generale Bank as a credit analyst in 1985. He graduated from the Ecole Superieure de Commerce de Rouen and holds the French equivalent of a master's degree in finance.

Background

Charles de Vaulx bio

Charles de Lardemelle bio

IVA Worldwide IVWIX

IVA International IVIOX

References

Modern monetary theory (MMT) definition

Herfindahl-Hirschman Index (HHI) definition

Creative destruction definition

A History of Interest Rates, by Sidney Homer and Richard Sylla; 2007

"The Irresistible Charm of the Family Factor," by Credit Suisse, Sept. 27, 2017

Jean-Marie Eveillard bio

"The Superinvestors of Graham-and -Doddsville," by Warren Buffett, Columbia Business School, May 17, 1984

Berkshire Hathaway 2013 shareholder letter, Page 20

Edward O. Thorp bio

Superforecasting: The Art and Science of Prediction, by Philip E. Tetlock and Dan Gardner, 2016

Nov 20, 2019
Barbara Roper: 'Protections Have Been Under Attack'
00:50:27

Our guest on the podcast today is Barbara Roper. She is director of investor protection for the Consumer Federation of America, where she has been employed since 1986. A leading consumer spokesperson on investor protection issues, Roper has conducted studies of abuses in the financial planning industry, state oversight of investment advisors, state and federal financial planning regulation, financial planning software, financial education needs of low-income older persons, the information preferences of mutual fund shareholders, systemic risk regulation, and securities law weaknesses as a cause of the financial crisis. She has testified frequently before Congress and has supported federal and state legislative and regulatory initiatives on a broad range of investor protection issues. Roper is a member of the SEC's Investor Advisory Committee, Finra's Investor Issues Group, and the CFP Board's Public Policy Council and Standards Commission.

Background
Barbara Roper bio
Micah Hauptman bio
Consumer Federation of America
Consumer Federation of America, Investor Protection Division

State of Investor Protections Today
"The Laws That Govern the Securities Industry"

Investment Company Act of 1940

Investment Advisers Act of 1940

Growth of Private Market
"Looking Behind the Declining Number of Public Companies," by Les Brorsen, Harvard Law School Forum on Corporate Governance and Financial Regulation, May 18, 2017.

"Where Have All the Public Companies Gone?" by the Bloomberg.com editorial board, April 9, 2018. 

Accredited Investor definition

Concept Release on Harmonization of Securities Offering Exemptions, Securities and Exchange Commission.

Letter from Consumer Federation of America to SEC Regarding Concept Release on Harmonization of Securities Offering Exemptions, by Barbara Roper and Micah Hauptman, Oct. 1, 2019.

"Private-Equity Funds in 401(k) Plans?" by John Rekenthaler, Morningstar.com, July 9, 2019. 

"SEC's Proposal on Private Placements Isn't Backed by Data," by the InvestmentNews editorial board, Aug. 31, 2019. 

Investment Fees
"2018 Morningstar Fee Study Finds That Fund Prices Continue to Decline," by Adam McCullough, CFA, Morningstar.com, April 30, 2019. 

"Money Flowed to the Cheapest Funds in the Third Quarter," by Tom Lauricella and Gabrielle Dibenedetto, Morningstar.com, Oct. 18, 2019.

"That Investment Fees Are Falling Is a Popular Narrative, But It's Not the Whole Story," by Tom Bradley, Financial Post, April 4, 2019.

"401(k) Plan Quality Correlates with Company Profits," by Anne Tergesen, The Wall Street Journal, Sept. 17, 2018.

"How High Is Too High for 401(k) Fees?" Consumer Reports, Dec. 31, 2018.

Consumer Federation of America on SEC Proposal Regarding Fee Disclosure in Mutual Fund Point-of-Sale and Confirmation Documents, April 21, 2004.

Fund Democracy and Consumer Federation of America letter to the Employee Benefits Security Administration Regarding Fee Disclosure for Individual Accounts, July 24, 2007. 

Disclosure
"House Approves Bill Requiring SEC to Test Investor Disclosures," by Mark Schoeff Jr., InvestmentNews, Oct. 17, 2019. 

Speech by SEC Commissioner Cynthia Glassman, Nov. 4, 2005. 

Investment Advice
"House Members Urged to Vote Yes on Bill to Improve SEC Disclosure Effectiveness," Consumer Federation of America, Oct. 11, 2019.

SEC Proposed Regulation Best Interest

Regulation Best Interest definition

"SEC Passes Regulation Best Interest, but Fiduciary Rules Could Make a Comeback," by Andrew Welsch, Financial Planning, June 5, 2019. 

"SEC's Regulation Best Interest Comes Under Attack," by Melanie Waddell, ThinkAdvisor, Sept. 24, 2019. 

"What Investors Need to Know About Regulation Best Interest," by Aron Szapiro, Morningstar.com, June 14, 2019. 

The SEC's Best-Interest Proposal: What We Told Regulators," by Aron Szapiro, Morningstar Blog, Aug. 8, 2018. 

Form CRS Relationship Summary; Amendments to Form ADV, SEC.gov. 

"SEC's New Customer Relationship Form Confuses Consumers," by Melanie Waddell, ThinkAdvisor, Sept. 13, 2018.

Retirement
"Court Overturns Obama-Era Rule on Retirement Planners," by Tara Siegel Bernard, The New York Times, March 16, 2018. 

"Think Your Retirement Plan Is Bad? Talk to a Teacher," by Tara Siegel Bernard, The New York Times, Oct. 21, 2016. 

"Teachers and Annuities: A Questionable Match and a Hard Product to Shed," by Ron Lieber, The New York Times, March 16, 2018. 

"The Annuity Trap Teachers Need to Avoid," by Leslie P. Norton, Barron's, May 25, 2019. 

"SEC Probes Practices in Public-Sector Retirement Plans," Barron's, Oct. 9, 2019.

"Legislation That Aims to Help Workers Save," by Aron Szapiro, Morningstar.com, April 12, 2019. 

"House Passes SECURE Retirement Bill With Massive Bipartisan Support," by Greg Iacurci, InvestmentNews, May 23, 2019. 

"What the New Retirement Bill Means for Savers and Retirees," by Reshma Kapadia, Barron's, May 26, 2019.

Nov 13, 2019
Dennis Lynch: 'Have a Growth Mindset and Be Willing to Learn New Things'
00:53:14

Our guest on the podcast today is is Dennis Lynch. Lynch is the head of Counterpoint Global at Morgan Stanley Investment Management. He joined Morgan Stanley in 1998 and has 25 years of investment experience. In his role, Lynch and his team run a number of growth equity strategies under the Morgan Stanley banner, including Morgan Stanley Institutional Advantage, Morgan Stanley Institutional Growth, and Morgan Stanley Institutional Discovery funds. All told, he and his team manage nearly $30 billion across their various mandates. On the strength of his track record, Morningstar named Lynch and his team Domestic Stock Fund Manager of the Year in 2013. Lynch received a B.A. in political science from Hamilton College and an MBA with honors and finance from Columbia University. We're pleased to have him join us today.

Background

Dennis Lynch bio 

Morgan Stanley Counterpoint Global 

Morgan Stanley Institutional Growth Fund 

Morgan Stanley Institutional Discovery Fund

“A Closer Look at a Fund Manager of the Year” by Janet Yang; Morningstar; Feb. 3, 2014

Team Members Referenced

Kristian Heugh bio

Sam Chainani bio 

David Cohen bio 

Stan Delaney bio  

Innovation vs. Mission Creep

Facebook

“Facebook stock jumps 12.6 percent as share lockup expires” by Alexei Oreskovic; Reuters; Nov. 14, 2012

"Shared Reading" and ESG

“Earth Has a Hidden Plastic Problem—Scientists Are Hunting It Down” by Andrea Thompson; Scientific American; Aug. 13, 2018 

“ESG and Sustainable Investing Report” by Kristian Heugh and Marc Fox; Morgan Stanley Investment Management; Mar. 7, 2019 

Disruptive Technologies and Forces

“The EDGE: Automation/Robotics” by Morgan Stanley Counterpoint Global; Dec. 18, 2018 

“Three Big Things: The Most Important Forces Shaping the World” by Morgan Housel; Collaborative Fund; Oct. 4, 2019 

"What is a Tech Company?" by Ben Thompson; Stratechery; Sept. 3, 2019

Nov 06, 2019
Meir Statman: 'We Are All Normal'
00:55:14

Our guest in the podcast today is Meir Statman, the Glenn Klimek Professor of Finance at Santa Clara University and a specialist in behavioral finance. Meir's research focuses on how investors and managers make financial decisions and how these decisions are reflected in financial markets. His work has been published in The Journal of Finance, The Financial Analysts Journal, The Journal of Portfolio Management, and many other publications. Meir has also received numerous awards for his research, including three Graham and Dodd Awards and the Matthew R. McArthur Industry Pioneer Award. His latest book, Finance For Normal People, was just released in paperback.

Background

Meir Statman bio

Finance for Normal People by Meir Statman, Oxford University Press, 2017 

What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions by Meir Statman,McGraw-Hill Education, 2010.  


Investor Behavior

The Expressive Nature of Socially Responsible Investors” by Meir Statman, January 2008. 

Money Flowed to the Cheapest Funds in the Third Quarter” by Tom Lauricella and Gabriel Dibenedetto, Morningstar.com, Oct. 2019. 

Morningstar Fund Flows Commentary” by Morningstar, August 2019. 


Retirement Happiness

FIRE movement 

Michael Finke: Here’s What Makes Retirees Happy” by Morningstar, The Long View podcast, episode 23, October 2019. 

To Compete with Robos, Advisors Must Become Financial Physicians” by Lauren Foster, CFA Institute blog, April 2017. 


Retirement Spending

Carolyn McClanahan: There’s More to Money Than Just the Numbers” by Morningstar, The Long View podcast, episode 5, June 2019. 

The Mental Mistakes We Make with Retirement Spending” by Meir Statman, Wall Street Journal, April 2017. 

The Bucket Approach to Retirement Allocation” by Christine Benz, Morningstar.com, February 2019.

Oct 30, 2019
Dana Emery: You're Not Getting a Valuation Discount for Free
00:53:23

Our guest on this week’s podcast today is Dana Emery, chief executive officer, president, and co-director of fixed income at Dodge & Cox. Dodge & Cox is a privately held firm that was founded in 1930; it manages six mutual funds and separately managed accounts. The firm uses a value-oriented approach across asset classes.

Dana joined Dodge & Cox in 1983 and serves as comanager on Dodge & Cox Income DODIX, Dodge & Cox Balanced DODBX, and Dodge & Cox Global Bond DODLX; she became Dodge & Cox’s chief executive officer in 2013. She is also president and a trustee of the Dodge & Cox Funds.

Background
Dana Emery Bio

Dodge & Cox Overview

Morningstar Analyst Report for Dodge & Cox Income 
Morningstar Analyst Report for Dodge & Cox Balanced 
Morningstar Analyst Report for Dodge & Cox Global Bond


Stewardship
Here’s What Warren Buffett’s Hero Jack Bogle Is Most Worried About in the Markets Right Now,” by John Melloy, CNBC.com, March 21, 2017.

Dodge & Cox: Built to Last,” by Andrew Daniels, Morningstar.com, Nov. 16, 2017.

Is Any Mutual Fund Company Better Than Vanguard? 1 Comes Close,” by Daren Fonda, Barron’s, Sept. 7, 2019.

An Old School Investment Manager That Builds Wealth Quietly,” by Landon Thomas, Jr., The New York Times, Oct. 13, 2017.

The Top Fund Families,” by Michael Laske, Morningstar blog, Feb. 22, 2019.

Morningstar Fund Family 150,” Morningstar Direct, July 1, 2019.

Dodge & Cox “People” Page (including management tenure and fund ownership), Morningstar.com

Dodge & Cox “Parent” Page, Morningstar.com


Portfolio Management and Strategy
"Investment Risk Management," Dodge & Cox, April 2017

Government-sponsored enterprise (GSE), Wikipedia.

Senior and Subordinated Debt, Corporate Finance Institute.

"Finding Value in BBB Debt--Not All Corporate Bonds Are Created Equal," Dodge & Cox, October 2019.

"A Value Investor’s Case for European Financials," Dodge & Cox, April 2019.

"Understanding the Case for Active Management," Dodge & Cox, October 2016. 
 

Women in Fund Management
Fund Family with 25% Women Managers Far Exceeds Industry Average,” by Liz Skinner, InvestmentNews, June 2, 2015. 

Who Runs Mutual Funds? Very Few Women,” by Jeff Sommer, The New York Times, May 4, 2018.

Girls Who Invest 
 

ESG
"Evaluating Environmental, Social, and Governance Factors as Active Owners," Dodge & Cox, April 2018.

"Dodge & Cox’s Approach to Evaluating ESG Factors," Dodge & Cox, January 2019.

 

Oct 23, 2019
Ben Johnson: Index Funds Are Not 'Zombie Investors'
00:57:37

Our guest on this week’s episode of The Long View podcast is Ben Johnson. Ben is Morningstar's director of global passive research. In that role, Ben leads a team of analysts who conduct research on index mutual funds and exchange-traded funds and publish research on the global passive investing industry.

Before assuming his current role, Ben was director of ETF research for Europe and Asia and served as the editor of the Morningstar ETFInvestor newsletter. Prior to that, Ben served as a senior equity analyst at Morningstar covering the agriculture and chemicals industry. Before joining Morningstar in 2006, Ben worked as a financial advisor for Morgan Stanley. He holds a bachelor's degree in economics from the University of Wisconsin, as well as the Chartered Financial Analyst designation. In 2015, Fund Directions and Fund Action named Ben among the 2015 Rising Stars of Mutual Funds.

Background
Ben Johnson articles and videos on Morningstar.com

Growth of Indexing
Investors Still Pouring Money Into Passive Funds,” by Christine Benz and Kevin McDevitt, Morningstar.com, July 29, 2019.

Have Fee-Based Models Won the Battle ... or the War?,” by Ginger Szala, ThinkAdvisor, Feb. 21, 2019.

End of Era: Passive Equity Funds Surpass Active in Epic Shift,” by John Gittelsohn, Bloomberg.com, Sept. 11, 2019.

Retail Distribution Review: Effects on Fund Fees in the UK,” by Jackie Beard, Morningstar blog, Nov. 9, 2018.

Passive Investing Hasn’t Taken Over the World,” by Barry Ritholtz, Investment News, Oct. 1, 2019.

Risks in the Growth of Indexing
The Big Short’s Michael Burry Explains Why Index Funds Are Like CDOs,” by Reed Stevenson, Bloomberg.com, Sept. 4, 2019.

Market-Cap-Weighted Index Funds Not Broken,” by Ben Johnson and Jeremy Glaser, Morningstar.com, Oct. 3, 2018.

Bogle Sounds a Warning on Index Funds,” by John C. Bogle, The Wall Street Journal, Nov. 29, 2018.

Passive Fund Providers Take an Active Approach to Fund Stewardship,” by Hortense Bioy, Morningstar.com, Dec. 6, 2017.

Indexing Impact Fears Overblown,” by Ben Johnson and Jeremy Glaser, Morningstar.com, Sept. 8. 2016.

Retirement Plans
Use of Index Funds in 401(k)s Increasing,” by Rebecca Moore, PlanSponsor, June 21, 2019.

Here’s the Real Reason Why Your 401(k) Fees Are Falling,” by Darla Mercado, CNBC.com, May 9, 2018.

Using ETFs in a Retirement Plan,” by Susan Dziubinski, Morningstar.com, Sept. 9, 2016.

Commissions and Fees
Fidelity’s Free Funds and the Changing Brokerage Business,” by John Rekenthaler, Morningstar.com, Aug. 8, 2018.

Looking Past the Fidelity Zero Headlines,” Christine Benz and Ben Johnson, Morningstar.com, Aug. 9, 2018.

"Schwab to Drop Commissions on U.S. Stock, ETF and Options Trades, Slamming Online Broker Stocks," by Ciara Linnane, Marketwatch, Oct. 1, 2019.

"E-Trade Drops Commissions on Trades, Joining Schwab, TD Ameritrade in Brokerage Fee War," by Maggie Fitzgerald, CNBC.com, Oct. 2, 2019.

Are No-Commission Trades Good for Investors?” by Christine Benz and Ben Johnson, Morningstar.com, Oct. 2, 2019, Morningstar.com.

Indexing Market Segments
Everything You Need to Know About Strategic-Beta ETFs,” by Ben Johnson, Morningstar.com, April 8, 2016.

Are High-Yield ETFs Junk?” by Alex Bryan, Morningstar.com, April 26, 2017.

Indexing in Less-Efficient Markets,” by Alex Bryan, Morningstar.com, Oct. 5, 2016.

An Overview of the Passive Bond Funds Landscape,” by Christine Benz and Alex Bryan, Morningstar.com, March 22, 2018.

Better Bond ETFs?” by Alex Bryan, Morningstar.com, Aug. 3, 2016.

Are There Viable Alternatives to Traditional Bond ETFs?” by Christine Benz and Alex Bryan, Morningstar.com, June 29, 2016.

Introducing Two New Morningstar Bond Categories,” by Sarah Bush, Morningstar.com, May 2, 2019.

Morningstar Analyst Report for iShares 20+ Year Treasury Fund TLT
Morningstar Analyst Report for iShares iBoxx $ High Yield Corporate Bond ETF HYG
Morningstar Analyst Report for SPDR Bloomberg Barclays High Yield Bond ETF JNK

6 Questions about Low-Vol Investing,” by Susan Dziubinski, Morningstar.com, Sept. 8, 2017.

Morningstar Analyst Report for iShares Edge MSCI Min Vol USA ETF USMV

A Checklist for Assessing Dividend ETFs,” by Ben Johnson, Morningstar.com, June 29, 2016.

Not All Dividend ETFs Are Created Equal,” by Ben Johnson, Morningstar.com, Aug. 25, 2017.

Morningstar Analyst Report for Schwab U.S. Dividend Equity ETF SCHD
Morningstar Analyst Report for Vanguard Dividend Appreciation VIG

Oct 16, 2019
Alicia Munnell: Married Couples Are in the Retirement Danger Zone
00:52:36

Our guest on the podcast today is Alicia Munnell, the director of The Center for Retirement Research at Boston College. Alicia is a towering figure in the retirement research space. She and the team at the Center for Retirement Research produce articles and white papers on a wide variety of retirement-related topics, including Social Security, tax policy, retirement preparedness, and healthcare. Prior to joining Boston College in 1997, Alicia was a member of the president’s council of economic advisors and assistant secretary of the Treasury for economic policy. Previously, she spent 20 years at the Federal Reserve Bank of Boston, where she became senior vice president and director of research in 1984. Alicia has written scores of articles and authored and edited many books over the years; most recently, she co-authored Falling Short: The Coming Retirement Crisis and What to Do About It.

Background

Alicia Munnell bio
Alicia Munnell research archive
Center for Retirement Research at Boston College
Books by Alicia Munnell

Retirement Preparedness

Is There Really a Retirement-Savings Crisis?” by Anne Tergesen, The Wall Street Journal, April 23, 2017.

The Wealth of Households: An Analysis of the 2016 Survey of Consumer Finance,” Center for Economic and Policy Research, November 2017.

Women, Marriage, and the National Retirement Risk Index,” by Alicia H. Munnell, Wenliang Hou and Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College, June 2019.

Exploring the Retirement Consumption Puzzle,” by David Blanchett, Journal of Financial Planning, May 2014.

David Blanchett: If You’re Retiring Now, You’re in a Pretty Rough Spot,” The Long View, Sept. 18, 2019.

The Extraordinary Happiness of Retirees,” by Steve Vernon, Global Coalition on Aging, May 16, 2016.

Defined-Contribution Plans

The Federal Government Should Fix the Pension Coverage Gap,” by Alicia H. Munnell, Marketwatch, June 6, 2018.

An Analysis of Retirement Models to Improve Portability and Coverage,” by Alicia H. Munnell, Anek Belbase, and Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College, March 2018.

Are Americans Really Able to Manage Their 401(k) Plans?” by Alicia Munnell, NextAvenue, May 17, 2012.

401(k) Plan Fees: What Is Reasonable?” by Liam Pleven, The Wall Street Journal, Feb. 20, 2015.

A Safe Harbor for Annuities Could Help Retirement Savers,” by Aron Szapiro, Morningstar blog, Oct. 18, 2018.

State-Based Retirement Plans for the Private Sector,” Pension Rights Center.

Social Security


"Social Security’s Financial Outlook: The 2019 Update in Perspective," by Alicia H. Munnell, Center for Retirement Research at Boston College, May 2019.

Status of the Social Security and Medicare Programs: A Summary of the 2019 Annual Reports, Social Security and Medicare Boards of Trustees.

Alicia Munnell: The Social Security Fix No One Wants,” by Jane Wollman Rusoff, ThinkAdvisor, Jan. 30, 2018.

The Implications of Social Security’s 'Missing Trust Fund',” by Alicia H. Munnell, Wenliang Hou, and Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College, June 2019.

The Role of Home Equity in Retirement Planning

Retiree Housing Wealth: Battered but Still Significant,” by Alicia Munnell, MarketWatch, Feb. 4, 2015.

How Much Does Housing Affect Retirement Security? An NRRI Update,” by Alicia H. Munnell, Wenliang Hou, and Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College, September 2015.

Can a Reverse Mortgage Help Save an Underfunded Retirement?” by Michelle Singletary, The Washington Post, July 2, 2018.

This Secret Tax Break Could Help You Save Thousands of Dollars a Year If You Own a Home,” by Sarah Max, Money, Aug. 27, 2018

Long-Term Care

Long-Term Care: How Big a Risk?” by Leora Friedberg, Wenliang Hou, Wei Sun, and Anthony Webb, Center for Retirement Research at Boston College, November 2014.

Can Increasing the Long-Term Care Insurance Elimination Period Make Coverage Appealing Again?” by Michael Kitces, Nerd’s Eye View, Jan. 7, 2015.

Oct 09, 2019
Michael Finke: Here’s What Makes Retirees Happy
00:55:30

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.

Background

Michael Finke, PhD, CFP bio
Finke CV
2013 Investment Advisor IA 25 profile
2013 Investment news Power 20 profile
Montgomery-Warshauer Award

Withdrawal 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; 2013

Asset 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

Oct 02, 2019
Judith Ward: Planning Well at Every Life Stage
00:56:02
Sep 25, 2019
David Blanchett: If You're Retiring Now, You're in a Pretty Rough Spot
00:50:48

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.

Background
David Blanchett's bio

David Blanchett's research archive

Quantifying the Value of Advice
Alpha, Beta, and Now ... Gamma

The Value of a Gamma-Efficient Portfolio

Vanguard Advisor's Alpha

Capital Sigma: The Advisor Advantage

Reducing Wealth Volatility: The Value of Financial Advice as Measured by Zeta

Retirement
Annuities are Likely Coming to Your 401(k). Should You Use Them?

A Safe Harbor for Annuities Could Help Retirement Savers

Save More Today: Improving Retirement Savings Rates With Carrots, Advice, and Nudges

Nudge, by Richard Thaler and Cass Sunstein

Behavioral Nudges for Goals-Based Financial Planning

You Can't Fix What You Can't Measure, Aron Szapiro on The Long View podcast

I Don't Think the System Needs Nudges. I Think the System Needs Dynamite, William Bernstein on The Long View podcast

Man Bites Dog! Congress Is Writing Retirement Legislation!

Retiree Survey: Nearly All Say They Are Happy Though Many Are Financially Insecure

Estimating the True Cost of Retirement

Exploring the Retirement Consumption Puzzle

75 Must-Know Statistics About Long-Term Care: 2018 Edition

The 4% Rule Is Not Safe in a Low-Yield World

Simple Formulas to Implement Complex Withdrawal Strategies

Reducing Retirement Risk With a Rising Equity Glide-Path

Revisiting the Optimal Distribution Glide Path

Annuitized Income and Optimal Asset Allocation

Should Annuities Be Purchased From Tax-Sheltered Assets?

The Home as a Risky Asset

Careful With That Company Stock

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 TheLongView@morningstar.com

(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.)

Sep 18, 2019
Dan Ivascyn: Building a Portfolio to Bend but Not Break
00:52:56

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 TheLongView@morningstar.com

(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.)

Sep 11, 2019
Allan Roth: 'I Embrace Dumb Beta'
00:47:16

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. 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 TheLongView@morningstar.com

(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.)

Sep 04, 2019
Rupal Bhansali: FAANG Stocks Are 'Extremely Risky'
00:48:18

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

Other Topics Referenced in This Episode

	**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 TheLongView@morningstar.com

(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.)

Aug 28, 2019
Rob Arnott: Don't Sleep on Value Investing (Especially Emerging-Markets Value)
00:53:15

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

Related Links

Research Affiliates Forecasts

Research Affiliates Research

Other Research Referenced

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 TheLongView@morningstar.com

(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.)

Aug 21, 2019
Mark Miller: Less Investment Choice = Better Retirement Outcomes
00:50:40

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

Related Links

State of Retirement Preparedness in U.S.

The State of Work for Older Adults

Fixing Retirement at an Individual Level

Social Security

Healthcare for Retirees

Aug 14, 2019
Bill Nygren: 'A Stock That Doesn't Look Cheap on the Surface Might Be One of the Cheapest'
00:57:27

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

Related Links

How Stock-Picking Has Changed and What Defines Value

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 

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 TheLongView@morningstar.com


Aug 07, 2019
Jonathan Clements: 'It's in Wall Street's Interest to Make Everyday Investors Think That They Are Stupid'
00:53:36

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

Related Links

Frugality and Setting Financial Goals

The Role of Advisors in Improving Outcomes

Whether Investors Undermine Their Results With Bad Behavior

Retirement Decumulation

Asset Allocation and Investing

Jul 31, 2019
Maria Bruno and Joel Dickson: 'Building a Better Retirement'
00:58:54

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

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)

Backdoor Roth IRA: How it works, who should consider, and potential pitfalls to be aware of. (12:56-16:34)

"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)

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)


"We're telling people to, on average, oversave and underspend." Balancing longevity, sequence risk with spending and quality of life. (24:27-28:35)

"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)

"Retirees could be overexposed to equity risk." Whether retirees aren't derisking their portfolios. (31:31-32:41)

"The rules of thumb just don't work as well." Why managing taxes during retirement is necessarily an individualized process. (32:42-36:24)

"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. (39:42-44:37)

"Focus on the things that you can control." What to do if investment returns are muted in the future. (44:38-46:23)

ETF Landscape
"Investors that were more likely to trade chose the ETF." Are ETFs being used for long-term investing or trading? (46:24-49:28)

"98% of the DNA is the same." Whether the benefits of ETFs relative to traditional index funds been overstated. (49:29-51:27)

Vanguard's Personal Advisor Service
"The most important part of the financial planning process is the goal discovery." Why Vanguard's service offers a combination of human and automated advice. (51:28-56:17)

 

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 TheLongView@morningstar.com



Jul 24, 2019
Sheryl Garrett: 'The Industry Thought I Was Nuts'
00:51:21

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

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)

Subscription-based vs. hourly advice: What's the better model? (22:31-25:51)

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)

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)

Jul 17, 2019
James Montier: 'How Do I Get Paid for Owning This Asset?'
00:53:25

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)

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)

Forecasting and Portfolio Construction
How the debate over mean reversion informs GMO's asset-class forecasts. (9:37-10:09)

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)

Career risk: Where individual investors hold an edge over institutions. (18:05-18:55)

Alternatives
Montier defines "alternatives." Different ways of owning standard risks--depression risk, inflation risk, and liquidity. (18:56-21:49)

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) 

"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) 

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)

"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 Amid a Dearth of Value
"A reach for yield in any way, shape, or form." Explaining the dearth of value. (39:46-41:43)

"We have always been pretty bad at (forecasting), and it's unlikely we're going to get a lot better." (41:44-44:37)

How should investors and advisors forecast asset-class returns and plan for the future? (44:38-47:25)

Capital Allocation
Montier on the folly of firms borrowing to repurchase shares: "The more stable the environment, the easier it is to take on leverage, but the greater the danger that taking leverage creates further down the line when you get some random shock." (47:26-50:49)

Jul 10, 2019
Rick Ferri: 'There Are No Average Investors'
00:48:27

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

"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)

"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

"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)

 "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) 

"I don't think they're pivotal." REITs as a direct allocation.  (28:47-31:45)

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)

"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)

Jul 03, 2019
Josh Brown: 'Standardize the Process, Personalize the Advice'
00:53:13

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 

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). 

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).

"Brokerages in name only." Why wirehouse clients aren't necessarily being ill-served by the system (7:30-8:09). 

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).

How to Provide Financial Advice
Telling the client "no." The difference between pushing product and offering advice (10:35-12:16).

"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).

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).

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) 

"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) 

"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). 

The Future of Advice
"You're being judged on the portfolio, you should get paid on the portfolio you recommend." Brown is dubious of clients who aren't willing to pay for advice as a percentage of assets under advisement (44:23-46:50).

How a chocolatier's success reinforced the importance of consistency in client interactions: "Standardize the process, personalize the advice." (46:51-50:25) 

Jun 26, 2019
Harold Evensky: 'It's an Unmitigated Disaster'
00:49:52

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 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 TheLongView@morningstar.com

Jun 19, 2019
Aron Szapiro: 'You Can't Fix What You Can't Measure'
00:51:24

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)

States' role in creating policies that affect investors: "I hope these things build toward a federal solution." (14:54-16:58)

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)

On the bifurcation in retirement-plan quality between big and small employers. "Small employers are busy keeping the lights on." (26:39-29:22)

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 research analysts in the U.S. and overseas.

To Share Feedback or a Guest Idea: Write us at TheLongView@morningstar.com

Jun 12, 2019
Michael Kitces: The Model Has to Change Again
00:54:17

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) 

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) 

“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) · 

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) 

Going deep to differentiate: “I’m going to get really good at these annuity benefit riders” (7:32-8:45)

Persuasion: Using psychology and coaching to help clients overcome their biases (11:41-13:01)

“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)

“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)

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)

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)

“(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)

Technology leaps like robo-advice are less of a threat to the financial advisor than to the the back- and middle-office that supports them (32:57-33:54)

The great inversion: In the future, advisors will charge for financial-planning services and give away investment management for free (vs. today where the opposite often holds true) (33:55-35:36)

Best Practices for Delivering and Paying for Advice
“We still have a huge industry gap”: Not even 30% of financial advisors have achieved a baseline financial-planning designation—the CFP mark (35:37-39:20)

A question of when, not if, more exacting financial-advice standards will arrive: “The U.S. has become a laggard on fiduciary and competency standards” (39:21-43:21)

We can’t do financial advice for young people? Michael on why that’s ridiculous and how flat-fee or subscription-based advice will come to fill that void (43:22-46:51)

“I don’t … see anything wrong with the AUM model”: Why charging a percentage of assets-under-advisement makes sense for some clients, but will become less common in the future (46:52-48:56)

When it does and doesn’t makes sense to pay for financial advice by the hour (48:57:51:47)

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 in 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 TheLongView@morningstar.com

Jun 05, 2019
Carolyn McClanahan: There's More to Money Than Just the Numbers
00:55:41

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

May 29, 2019
Tim Buckley: There’s No One Even Close to Us
00:21:48

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” 

May 24, 2019
Morgan Housel: No One Hires a Luck Manager
00:47:22

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 Mirror” by William H. Gross (April 2013)
10-year Treasury Rate
“Counterintuitive Competitive Advantages” by Morgan Housel (Mar. 13, 2019)
“Fees vs. Fines” by Morgan Housel (Apr. 2, 2019)
“Statement of Principles” by Jason Zweig
“When You’ll Believe Anything” by Morgan Housel (Apr. 15, 2019)
Jack Bogle
Morgan Housel’s tweet about Jack 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. Jeff is head of global manager research in 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 TheLongView@morningstar.com

May 22, 2019
Don Phillips: We’re All in the Behavior Modification Business
01:01:38

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 intentions are good, but beware bureaucracy, red tape, and unintended consequences (58:30)

References
• Don Phillips, recipient of 2016 Matthew R. McArthur Industry Pioneer Award https://investmentsandwealth.org/news-room/2016/imca-awards-recognize-outstanding-achievement
• Sir John Templeton https://www.templeton.org/about/sir-john
• Wall Street Week https://www.youtube.com/watch?v=3ADn7V_l4Ws
• Joe Mansueto https://www.morningstar.com/company/about-us/joe
• Don’s love of the liberal arts, literature, and business https://grahamschool.uchicago.edu/news/how-liberal-arts-thrive-business-world
• Don Phillips, “Reflections on Fund Management, Five Lessons from 25 Years” http://www.imas.org.sg/uploads/media/2012/10/31/519_100907_Reflections_on_Fund_Management_Five_Lessons_from_25_Years_Sep11.pdf
• The Wiesenberger Books https://www.ifa.com/articles/arthur_wiesenberger_morningstar/
• Morningstar Mutual Fund Sourcebook https://images.app.goo.gl/LgzRCxK9Q3Bu77WC9
• Charles Royce https://www.roycefunds.com/people/chuck-royce
• The Morningstar Style Box http://www.morningstar.com/InvGlossary/morningstar_style_box.aspx
• Vanguard Windsor Fund https://www.morningstar.com/funds/xnas/vwndx/quote.html
• Court of Appeal, Second District, Division 7, California.; Morningstar, Inc., and Don Phillips, Petitioners, v. SUPERIOR COURT of the State of California, for the County of Los Angeles, Respondent. PILGRIM GROUP, INC., Real Party In Interest; No. B075691. https://caselaw.findlaw.com/ca-court-of-appeal/1769980.html
• ESG Investing https://www.morningstar.com/company/esg-investing
• Morningtar Blog: Sustainable Investing https://www.morningstar.com/blog/tag/sustainableinvesting
• Janus Funds, Super Bowl XXXI (1997), “Eyes” ad https://adage.com/videos/janus-funds-eyes/1024
• “The Evolution of Robo-Advisors”, Morningstar blog (July 2018) https://www.morningstar.com/blog/2018/07/11/robo-advisors.html
• “The Importance of Asset Allocation” by Roger G. Ibbotson, Financial Analysts Journal, May/June 2010 https://www.cfapubs.org/doi/abs/10.2469/faj.v66.n2.4
• “Why Diversity and Inclusion Matter to Investors” by Dan Lefkovitz, Morningstar blog, Dec. 18, 2018 https://www.morningstar.com/blog/2018/12/18/diversity-inclusion.html
• Cathy Odelbo https://www.morningstar.com/company/about-us/catherine
• John Rekenthaler https://www.morningstar.com/articles/archive/208/articles-by-john-rekenthaler.html
• Lori Lucas https://www.ebri.org/about/staff/lori-lucas-cfa
• A Global Guide to Strategic-beta Exchange-Traded Products https://www.morningstar.com/lp/global-guide-to-strategic-beta
• “Strategic-Beta Exchange-Traded Products Continue to Grow, but Show Signs of Maturity” by Ben Johnson, Morningstar blog, Mar. 27, 2019 https://www.morningstar.com/blog/2019/03/27/strategic-beta-etp.html
• “Vanguard Founder Jack Bogle Passes Away” by Dan Culloton and Alec Lucas, Morningstar.com https://www.morningstar.com/articles/908054/vanguard-founder-jack-bogle-passes-away.html
• Invesco QQQ Trust (which tracks the Nasdaq 100 Index) https://www.morningstar.com/etfs/xnas/qqq/quote.html
• Jack Brennan, former Vanguard CEO [to find] https://en.wikipedia.org/wiki/John_J.Brennan(businessman)
• Sheryl Garrett https://garrettplanningnetwork.com/about/team

May 15, 2019
William Bernstein: If You've Won the Game, Stop Playing
00:55:04

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 to plan for retirement fifty years into the future (41:24)
• What to do for investors who aren’t interested in finance or good with numbers: Limit investor autonomy, provide a generous match, offer a low-cost menu, default them into a target-date fund (43:03)
• “One of the most important people in my life”: Remembering Jack Bogle (44:32)
• “Something that everyone knows isn’t worth knowing”: Bill on the under-appreciated importance of corporate governance to security returns (46:46)
• How Bill navigates ESG with his clients: He discourages them from pursuing it (49:25)
• Principled but “bending”: How humility should make room for other ideas or priorities within a portfolio or plan (51:05)

• William Bernstein bio (CFA Institute) https://blogs.cfainstitute.org/investor/author/williamjbernstein/
• William Bernstein’s “Efficient Frontier” website http://www.efficientfrontier.com/
• Mean-variance optimization: Explainer https://www.effisols.com/basics/MVO.htm
• William Bernstein’s reading list http://www.efficientfrontier.com/reading.htm
• Fama and French research papers https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1455
• “A Random Walk Down Wall Street” by Burton G. Malkiel https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435/ref=sr_1_1?s=books&ie=UTF8&qid=1324493412&sr=1-1
• “Bogle on Mutual Funds” by Jack Bogle https://www.amazon.com/gp/product/111908833X/ref=dbs_a_def_rwt_bibl_vppi_i4
• “The Intelligent Investor” by Benjamin Graham https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=sr_1_1?s=books&ie=UTF8&qid=1324493602&sr=1-1
• “The Theory of Interest” by Irving Fisher https://www.amazon.com/Theory-Interest-Illustrated-Irving-Fisher-ebook/dp/B00CR32KGK

• “The Arithmetic of Active Management” by William F. Sharpe
• https://web.stanford.edu/~wfsharpe/art/active/active.htm
• Active Share website https://activeshare.nd.edu/
• “Presidential Address: Discount Rates” by John H. Cochrane https://faculty.chicagobooth.edu/john.cochrane/research/papers/discount_rates_jf.pdf
• Value (aka “book-to-market”) factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_form_btm.html
• Momentum factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_mom_factor.html
• Profitability factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/tw_5_ports_beme_op.html
• “Your Complete Guide to Factor-based Investing” by Andrew L. Berkin and Larry E. Swedroe
• https://www.amazon.com/dp/B01N7FCW2D/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
• Factor performance http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html#Research
• Berkshire Hathaway 2018 shareholder letter http://www.berkshirehathaway.com/letters/2018ltr.pdf
• “Betting Against Beta” by Andrea Frazzini and Lasse Heje Pedersen http://pages.stern.nyu.edu/~lpederse/papers/BettingAgainstBeta.pdf
• “Betting Against Beta” factor vs. value factor performance (10 years ended Feb. 2019) https://www.portfoliovisualizer.com/factor-statistics?s=y&factorDataSet=-1&marketArea=0&__checkbox_ffmkt=true&__checkbox_ffsmb=true&__checkbox_ffsmb5=true&ffhml=true&__checkbox_ffhml=true&__checkbox_ffmom=true&__checkbox_ffrmw=true&__checkbox_ffcma=true&__checkbox_ffstrev=true&__checkbox_ffltrev=true&__checkbox_aqrmkt=true&__checkbox_aqrsmb=true&__checkbox_aqrhml=true&__checkbox_aqrhmldev=true&__checkbox_aqrmom=true&__checkbox_aqrqmj=true&aqrbab=true&__checkbox_aqrbab=true&__checkbox_trm=true&__checkbox_cdt=true&startDate=03%2F01%2F2009&endDate=03%2F31%2F2019
• “The Intelligent Asset Allocator” by William J. Bernstein https://www.amazon.com/gp/product/0071385290/ref=s9_simz_gw_s0_p14_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=1NNWXTETT62HJ8QM9ZM6&pf_rd_t=101&pf_rd_p=470938631&pf_rd_i=507846
• “Availability” heuristic https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/availability-heuristic/
• Dunning-Kruger effect https://www.ncbi.nlm.nih.gov/pubmed/10626367
• “Why Jack Bogle Doesn’t Own Non-U.S. Stocks” with Christine Benz and Jack Bogle (Oct. 22, 2018) https://www.youtube.com/watch?v=P54trh0Rre8
• “Will Active Stock Funds Save Your Bacon in a Downturn?” by Jeffrey Ptak https://www.morningstar.com/articles/852864/will-active-stock-funds-save-your-bacon-in-a-downt.html
• “Global Stock Markets in the Twentieth Century” by Philippe Jorion and William N. Goetzmann, Journal of Finance https://onlinelibrary.wiley.com/doi/abs/10.1111/0022-1082.00133
• “Legal Determinants of External Finance” by Rafael La Porta, Florencio Lopez-de-Silane, Andrei Shleifer, Robert W. Vishny, NBER Working Paper https://www.nber.org/papers/w5879
• Online Data Robert Shiller http://www.econ.yale.edu/~shiller/data.htm
• S&P 500 Shiller PE Ratio https://www.multpl.com/shiller-pe
• S&P 500 Price/earnings ratio https://www.multpl.com/s-p-500-pe-ratio
• S&P 500 Price/book ratio https://www.multpl.com/s-p-500-price-to-book
• National Retirement Risk Index, Center for Retirement Research at Boston College https://crr.bc.edu/special-projects/national-retirement-risk-index/
• “National Retirement Risk Index Shows Modest Improvements in 2016” by Alicia H. Munnell, Wenliang Hou, Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College https://crr.bc.edu/wp-content/uploads/2017/12/IB_18-1.pdf
• “In Memoriam”, William J. Bernstein, Efficient Frontier http://efficientfrontier.com/ef/0adhoc/RIP-JCB.html
• David Yermack, Albert Fingerhut Professor of Finance and Business Transformation, NYU Sterm, Publications https://its.law.nyu.edu/facultyprofiles/index.cfm?fuseaction=profile.publications&personid=20547

May 01, 2019