The Rational Reminder Podcast Benjamin Felix & Cameron Passmore

With a wealth of experience as a market theoretician and a prolific contributor to financial discourse, today’s guest is uniquely positioned to guide us through the complexities of index fund dynamics. Joining us to discuss the problems that passive investing may be causing in financial markets (and what people should do about it) is Michael Green, Chief Strategist and Portfolio Manager for Simplify Asset Management. Tuning in, you’ll learn about the ramifications of the surging popularity of indexing and the sobering reality of mounting market inelasticity, backed by compelling evidence that underscores the challenges facing today's financial landscape. The insights in this episode extend beyond mere observation, with Mike offering policy recommendations and strategies to address the structural issues affecting our markets. While this conversation is certainly challenging, philosophical, and even alarming, it isn't purely theoretical. It’s a call to action to safeguard the integrity of our financial systems. So, be sure to join us as we navigate the nuances of indexing and passive investing at large, guided by the expertise and foresight of one of finance's most respected voices!
 
Key Points From This Episode:
 
(0:05:48) The negative effect that the growth of indexing is having on financial markets.
(0:07:37) Insight into the XIV trade that strengthened Mike’s belief in this view.
(0:13:49) Defining the problem that indexing is causing (which might seem like a good thing).
(0:15:57) How market cap-weighted index funds differ from closet index funds.
(0:16:57) Indications that markets are becoming increasingly inelastic over time.
(0:19:21) Why flows into cap-weighted index funds differ from the overall aggregate of active.
(0:24:21) Active versus passive investing in public versus non-public markets.
(0:25:57) The catastrophic event that could be caused by index funds (and how to avoid it).
(0:30:51) Why we need to rethink the definition of passive investing and the value of diversity.
(0:36:10) Market inelasticity versus inefficiency and the impact of active manager performance.
(0:41:38) How investors should shift their strategy to respond to the current market structure.
(0:53:01) Regulatory recommendations: who actually needs to step up and do something.
(0:54:30) Mike’s outlook on US expected returns, market volatility, and 401(k)s.
(1:01:50) Why Bitcoin isn’t the solution to all of our monetary and fiscal policy problems.
(1:05:22) The definition of success in Mike’s life (and why it’s completely non-financial).



Links From Today’s Episode:
 
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
‘Yes, I give a fig… Thoughts on markets from Michael Green’ — https://www.yesigiveafig.com/
Michael Green on Substack — https://substack.com/@michaelwgreen
Michael Green on LinkedIn — https://www.linkedin.com/in/michael-green-9a15142/
Michael Green on X — https://twitter.com/profplum99
Nassim Nicholas Taleb — https://www.fooledbyrandomness.com/
Valentin Haddad — https://sites.google.com/site/valentinhaddadresearch/
Jean-Philippe Bouchaud — https://bouchaud.substack.com/
Marco Sam

Today, we welcome back Prof. Meir Statman to talk about the role of finances in well-being. We investigate the role of finances in well-being with Prof. Meir Statman through the lens of his new book, A Wealth of Well-Being. Discover why wealth advisors must evolve into well-being advisors and uncover the impact of finances on various life domains. From dating to education, we discuss the profound financial correlations shaping happiness and well-being. Tune in now!


Key Points From This Episode:



(0:00:15) Introduction to returning guest, Prof. Meir Statman.
(0:02:15) How well-being fits into the study of behavioural finance.
(0:06:52) Discover the role of finances in different domains of life well-being.
(0:10:42) Hear why wealth advisors need to change to being well-being advisors.
(0:14:59) Explore the relationship between finances, social status, and overall well-being.
(0:19:46) Whether too much self-control in spending can be a problem.
(0:22:46) The effect of finances on dating and marriage and how work plays into well-being.
(0:26:42) Find out how education fits into well-being and why it is a major regret for people.
(0:32:36) Gain insights into how religion and faith can enhance well-being.
 
Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://twitter.com/MarkMcGrathCFP
Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/
Prof. Meir Statman on X — https://twitter.com/meirstatman 
Episode 258: Prof. Meir Statman — https://rationalreminder.ca/podcast/258
 
Meir's Book: A Wealth of Well-Being — https://www.amazon.com/Wealth-Well-Being-Holistic-Approach-Behavioral/dp/1394249675

In this episode, we delve into the best time to claim your Canada Pension Plan (CPP) benefits. Although the focus of this episode is on Canada, there will be many relevant and valuable insights for our non-Canadian listeners. In our conversation, we discuss the importance of understanding the intricacies of CPP benefits, the fundamentals, and how individuals can optimize their retirement income by making informed decisions. Explore the importance of understanding when to claim CPP benefits, how much future financial security a CPP offers, and why the CPP is one of the most valuable retirement assets for most Canadians. Gain insights into how wage growth ties into CPP benefits, the exceptions to deferring a CPP claim, and what made 2022 different regarding CPP claims. Join us as we uncover the nuances of CPP benefits!
 
Key Points From This Episode:


(0:03:25) Unpack the fundamentals of the Canada Pension Plan (CPP) benefits.
(0:10:04) How the timing of making a CPP claim is linked to the benefits.
(0:14:15) Ben explains the financial implications of deferring a CPP claim.
(0:21:34) Uncover common approaches to identify the best time to claim a CPP.
(0:26:06) Learn about the situations when it is best not to defer a CPP claim.
(0:31:12) Why the CPP is one of the most valuable retirement assets for most Canadians.
(0:39:11) The after-show: ideas for the podcast, feedback, segregated funds, and more!



Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://twitter.com/MarkMcGrathCFP
Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/
Prof. Meir Statman on Twitter — https://twitter.com/meirstatman 
Episode 258: Prof. Meir Statman — https://rationalreminder.ca/podcast/258
The Canadian Institute of Actuaries (CIA) — https://www.cia-ica.ca/
Society of Actuaries (SOA) — https://www.soa.org/
FP Canada — https://www.fpcanada.ca/
When Should You Start CPP? — https://www.youtube.com/watch?v=r9vYji99fhk
CE Drive with Jason Watt — https://cedrive.podbean.com/
Episode 137: David Blanchett: Researching Retirement — https://rationalreminder.ca/podcast/137
Episode 254: David Blanchett: Regret Optimized Portfolios and Optimal Retirement Income — https://rationalreminder.ca/podcast/254
Episode 289 - Retiring Retirement Income Myths with the Retirement Income Dream Team — https://rationalreminder.ca/podcast/289
Jason Yi on LinkedIn — https://www.linkedin.com/in/jason-yi-cpa-ca-56544446/
Episode 225: The Index Fund "Tipping Point” — https://rationalreminder.ca/podcast/225
 
Books From Today’s Episode:
 
Wealthier — https://wealthierbook.com/
The Algebra of Wealth — https://www.amazon.com/Algebra-Wealth-Formula-Financial-Security/dp/0593714024
Sleep Well, Take Risks, Squish the Peas — https://www.amazon.com/Sleep-Well-Take-Risks-Squish/dp/0757324711/
 
Papers From Today’s Episode: 
 
‘The CPP Take-Up Decision: Risks and Opportunities’ — https://www.soa.org/4a223f/globalassets/assets/files/resources/research-report/2020/2020-cp

In this episode, we are joined by renowned expert Abby Sussman to unpack how individuals form judgments and make decisions about their finances. Abby is a distinguished professor of marketing at the University of Chicago Booth School of Business whose expertise lies at the intersection of psychology, economics, and finance. In our conversation, we discuss the nuances of financial decision-making and how personal beliefs influence our financial choices. Discover the source of reference points for financial well-being and how expense prediction biases play a role in making poor financial decisions. We explore the effectiveness of budgeting, the nuances of product sensitivity, and the drivers of excessive consumer consumption. Gain insights into navigating the complexities of financial decision-making, the psychology behind it, how AI can help you make better financial decisions, and much more. Tune in to gain a deeper understanding of the psychology behind financial decisions and uncover strategies to optimize your financial future with Abby Sussman!
 
Key Points From This Episode:
 
(0:04:45) Explore the difference in how we perceive others' wealth versus our own.
(0:08:25) Drivers of the differences in perception and their impact on financial decision-making.
(0:11:43) Steps to reduce excessive consumption and how personal future wealth perceptions influence financial decision-making.
(0:16:58) Discover the source of the reference point people use when considering their wealth.
(0:18:53) How to make better financial decisions and the role of peoples’ expectations.
(0:20:20) Unpack expense prediction bias and the problems it creates.
(0:22:55) Methods used to predict expenses and what people typically budget for.
(0:29:00) Pragmatic advice for reducing the influence of expense prediction bias.
(0:31:53) Whether prediction bias manifests in long-term planning, such as retirement.
(0:33:14) Find out if setting a budget is common practice and how it impacts financial health.
(0:37:36) Trends in actual spending in relation to expenses budgeted for.
(0:39:31) She explains how people categorize expenses and react to insufficient funds.
(0:42:40) Product sensitivity and how attitudes toward investment products vary.
(0:48:21) Interventions to help people choose better financial products.
(0:49:40) Areas of research she is most interested in and her opinion on the role of AI.
(0:55:54) Abby shares her definition of success.
 
Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Abby Sussman on LinkedIn — https://www.linkedin.com/in/abigail-sussman-ab4427/
Abby Sussman on X — https://twitter.com/abbysussman
The University of Chicago Booth School of Business — https://www.chicagobooth.edu/
Society for Judgment and Decision Making — https://sjdm.org/
Episode 153: Prof. Johanna Peetz — https://rationalreminder.ca/podcast/153
Epidose 296: Adam Alter — https://rationalreminder.ca/podcast/296
Panel Study of Income Dynamics — https://psidonline.isr.umich.edu/
Consumer Financial Protection Bureau — https://www.consumerfinance.gov/
 
Papers From Today’s Episode: 
 
‘Understandi

In this episode, we unpack key tenants of investing and the quality of financial advice in Canada's banking industry. In our conversation, we present a list of lessons we have learned about investing, which has been consolidated from contributions by the Twitter community and the Rational Reminder Community. In our conversation, we discuss ways to beat the market, how narratives can impact the economy, and why timing the market is a bad investment approach. Discover why performance chasing is not a successful strategy, why incentives matter, and why economic growth is a poor predictor of investment success. Learn about the nuanced relationship between expected economic growth and stock returns, why wealth does not give you access to market-beating investments, and the effectiveness of investing in low-cost total market index funds. Finally, in our after-show segment, we delve into the quality of financial advice provided by Canada's six big banks, investment strategies, listener reviews, and much more. Gain valuable insights into navigating the complexities of investing and learn why simplicity, discipline, and skepticism towards overly complex or costly strategies are vital for financial success. Tune in now!
 
Key Points From This Episode:
 
(0:00:00) Introduction and outline of today’s topic: The Most Important Lessons in Investing.
(0:04:55) Why you cannot outsmart the markets and what it takes to beat the market.
(0:07:47) The notion that "this time is always different" during times of financial upheaval.
(0:10:45) Explore the forward-looking nature of markets and their impact on decision-making.
(0:12:08) Unpack the unreliability of market forecasts for making investment decisions.
(0:14:48) Hear why time in the market beats timing the market.
(0:16:11) Important aspects of funds and why investors should not chase portfolio performance.
(0:19:20) Learn about the role of incentives in the distribution of financial information.
(0:25:09) Common misconceptions about the link between economic growth and stock returns.
(0:27:28) We discuss the importance of good financial planning over portfolio management.
(0:30:51) Uncover the relationship between risk and expected returns in financial markets.
(0:32:33) How the risk-return relationship changes over different time horizons.
(0:34:59) Why fees and taxes matter and the nuances of permanent insurance. 
(0:41:55) Find out why there is no such thing as a perfect investment strategy.
(0:44:51) Tailoring your investment portfolio to meet your goals and sticking to it.
(0:46:48) Investigate why there is no such thing as a passive investment.
(0:50:59) Understanding why wealth does not provide access to market-beating strategies.
(0:53:22) Why diversification is the only free lunch in investing.
(0:58:58) Recommendations and pitfalls to avoid when assessing investments.
(1:01:02) What the structure of a financial portfolio looks like for most people.
(1:03:11) The aftershow: the state of Canadian banks, investment advice, and more.
 
 
Links From Today’s Episode:
 
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.c

Dr. Randall Stutman is an author, highly sought-after speaker, and executive leadership coach to some of the world’s most exceptional CEOs, billionaires, and hedge fund managers. As the founder of the Admired Leadership Institute, he is widely recognized as a world-class authority on leadership strategy and style. Today, Dr. Stutman joins us to discuss the behaviours and skills that make admired leaders and how you can translate those characteristics and strategies into your financial decision-making process. Tuning in, you’ll learn about the importance of followership, find out why admired leadership is so rare, and hear some practical advice to help you make better decisions. We also discuss why you should actually disagree with your clients more often, why relationships are the cornerstone of any business, questions to ask yourself to find the right client or financial advisor, and much more. Don’t miss this fascinating and broad-reaching conversation on leadership and decision-making with specific applications for financial advice relationships!
 
Key Points From This Episode:
 
(0:03:36) A typical approach to leadership development (and why it doesn’t work).
(0:07:21) The two key qualities or characteristics of an admired leader.
(0:09:23) Benefits of followership to create change and implement decisions.
(0:10:28) A simple definition of leadership and why not everyone can be an admired leader.
(0:13:08) Why great leaders and great organizations are values-driven.
(0:16:15) Ways that consensus decision-making can hurt or strengthen an organization.
(0:23:02) Other shortcomings in the decision-making process and how to avoid them.
(0:27:29) Practical advice for financial advisors to become admired leaders.
(0:32:33) Why checklists should never be the focus of a conversation or relationship.
(0:33:52) Traits of admired leaders that financial consumers can emulate.
(0:35:55) The best way for a couple to reach agreed-upon financial goals.
(0:37:29) Tips for financial advisors to give better feedback and maintain relationships.
(0:44:30) What a successful relationship with a financial advisor looks like.
(0:46:07) How to avoid outcome bias for people who have been successful in the past.
(0:48:00) Rapid-fire time management strategies, hallmarks of effective meetings, what’s missing in virtual communication, what motivates people, and more.
(0:55:46) A very important metric by which Dr. Stutman defines success.
 
Links From Today’s Episode:
 
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Admired Leadership Institute — https://admiredleadership.com/
Episode 238: Prof. Ralph Keeney — https://rationalreminder.ca/podcast/238
 
Books From Today’s Episode:
 
Working Through Conflict: Strategies for Relationships, Groups, and Organizations — https://www.amazon.com/dp/0367461471/
Communication in Legal Advocacy (Studies in Communication Process) — https://www.amazon.com/dp/B09T21F8KX/