Your Complete Guide to Index Investing with Dan Bortolotti
Podcast2018-06-24T18:36:18-04:00

Podcast

Hosted by Dan Bortolotti, the Canadian Couch Potato Podcast features expert interviews, helpful tips for DIY investors, and answers to questions from listeners and blog readers.

Latest Episodes

Podcast 25: Dr. Steve Wendel on Investor Success

The latest episode of the Canadian Couch Potato podcast features an interview with Dr. Stephen Wendel, Head of Behavioural Science at Morningstar. Wendel heads up a research initiative called the Investor Success Project, which focuses on the human factors that dominate personal finance. So much discussion around financial well-being focuses on investing, but as Wendel points out in our interview, “In the finance industry, we often focus alpha, asset allocation and fees, but these are only important for people who have saved.” And according to his research, nearly half of all Americans have saved nothing for retirement. I don’t imagine the numbers are any more encouraging in Canada. Wendel and his team are devoted to helping investors overcome the many challenges they face in the effort to save more and enjoy a comfortable retirement. His specialty is understanding how people can close the gap between what they say they want to achieve and what they actually do. It’s fascinating work, and you can download the Investor Success Project white papers for free. One-fund vs. multi-ETF portfolios In the Ask the Spud segment of this episode, I answer a common question about the relative benefits between the popular new one-fund solutions [...]

July 9th, 2019|Categories: Behavioral Finance, Podcast|Tags: , , |20 Comments

Podcast 24: Mind Your Money Gaps with Preet Banerjee

In episode 24 of the Canadian Couch Potato podcast, I’m joined by Preet Banerjee, the Renaissance man of personal finance. After a stint as an investment advisor, which ended in disillusionment, Preet went on to become a media personality, an author, public speaker, fintech entrepreneur and academic. In our interview we discuss his current research on the plight of the Canadian investor, as well his latest project, called Money Gaps, an online tool designed to help advisors offer better financial planning services to their clients. The worst argument for active investing ever? In the Bad Investment Advice segment, I almost lose my composure responding to an article that recently appeared on the Forbes website called Why Most Index Funds and ETFs Are Not Good Investments. The author of this piece uses a common technique in the financial industry: he takes some seriously biased data compiled by an investment firm, dresses it up as a “study” and tries to pass it off as evidence that active funds should be expected to outperform index funds and ETFs. The term “study” suggests some academic rigor, but what we have here is actually a marketing piece created by Fidelity Investments to sell its active [...]

May 21st, 2019|Categories: Podcast|Tags: , |10 Comments
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Podcast 23: Ask the Spud Edition

It’s been a while since our last CCP podcast, but we’re back with an all-new episode. This time I’ve devoted the whole show to answering questions from listeners and readers.  Here are some issues we address on the podcast: What is the likelihood of an ETF closing down, and what would be the consequences for investors if this happens? I touched on this issue in a blog post a few years ago. It’s important to understand what happens if an ETF closes its doors, because that can certainly happen. Usually the reason ETFs shut down is simply that they’re unable to attract enough assets to be profitable. In that case, the provider typically issues a press release announcing that the fund will be closed on a specific date: you can sell your units on the exchange any time before that and receive their fair market value. Remember, the value of any ETF or mutual fund is determined by its underlying holdings, and the stocks and bonds in the fund won’t be affected by its looming closure. So there is no reason to expect the fund will fall in value after it announces its pending demise. An ETF may also [...]

April 23rd, 2019|Categories: Podcast|Tags: , , |17 Comments

Podcast 22: How Smart Is Your Beta?

In episode 22 of the podcast, I revisit smart beta, one of the most significant trends in the ETF marketplace. To help explain what smart beta is, and the challenges faced by investors who use these strategies, I interviewed John West of Research Affiliates, a California-based firm that was one of the pioneers of smart beta ETFs. If you’re new to the idea of smart beta, you may want to start by flipping through a series of blogs I wrote on its theory and practice. These strategies fall somewhere between old-school active management and traditional index investing, because they are based on the idea that you can improve returns by building indexes that exclude some companies, and then weight the remaining ones in ways other than by their size in the market. There is definitely an attempt to do better than plain-vanilla index funds, but the rules are systematic, transparent and consistently applied rather than being entrusted to a fallible human manager. John has written some excellent white papers on the behavioural risks associated with smart beta strategies. I especially recommend The Biggest Failure in Investment Management: How Smart Beta Can Make It Better or Worse. The main takeaway is [...]

March 3rd, 2019|Categories: Podcast|Tags: , |7 Comments

Podcast 21: Larry Swedroe on Investing in Retirement

In my final podcast episode of 2018, I’m joined by Larry Swedroe, who has long been one of my favourite authors on investing and financial planning. Larry and I discuss his latest book, Your Complete Guide to a Successful & Secure Retirement, and we focus on the challenges investors face as they approach the end of their careers. Larry’s book is written for an American audience, but it includes valuable information for investors on both sides of the border. One idea that resonated with me—because I have seen it first-hand—is that people have a tendency to worry more about their investments once they stop adding new money. As Swedroe writes: “Combine the challenge of finding a replacement for work with the increased investment risks … and retirees often begin obsessing about their portfolios. The time they used to spend at work is now spent watching CNBC, reading financial publications and browsing financial sites online.” It’s also common for retirees to ask whether they should remodel their portfolios to generate income. Many feel that traditional index funds are no longer appropriate and they feel they should focus on dividend stocks, REITs, corporate bonds, and even more adventurous investments, such as private [...]

December 20th, 2018|Categories: Podcast|Tags: , |12 Comments
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Podcast 20: One-Stop ETF Shopping

I’ve always tried to stress that successful investing is about the right process, not the right products. But good products certainly help. In the latest episode of the podcast, my guest is Todd Schlanger of Vanguard Canada, who was one of the architects behind the firm’s asset allocation ETFs, launched earlier this year to great fanfare in the DIY investing community. These globally diversified “funds of funds” are available in three versions: the Growth ETF Portfolio (VGRO) has a target of 80% stocks and 20% bonds, while the Balanced ETF Portfolio (VBAL) holds 60% stocks and the Conservative ETF Portfolio (VCNS) is 40% stocks. In each case, the underlying holdings are seven other Vanguard ETFs. In our interview, Todd discusses the thought process behind the construction of these new funds. We discuss the decisions to include global bonds, to overweight Canada (home bias), to use currency hedging for the bonds but not the stocks, and how frequently the funds are rebalanced. A few times in the discussion we mention a white paper that Todd recently co-wrote on this subject: the title is Vanguard asset allocation ETFs:  A simple yet sophisticated approach to portfolio construction. Changing course In the Bad Investment [...]

November 10th, 2018|Categories: Behavioral Finance, Podcast|Tags: |24 Comments

Hosted by Dan Bortolotti, the Canadian Couch Potato Podcast features expert interviews, helpful tips for DIY investors, and answers to questions from listeners and blog readers.

Each episode includes interviews with experts, helpful tips for DIY investors, and answers to questions from listeners and blog readers.

Subscribe today using your favorite podcast software so you never miss an episode!

After each episode has been released, we’ll post a link to the relevant blog post, which includes a streaming feed so you can listen in you browser. The blog posts also include links related to the episode’s guest, the investing topics discussed, and other show notes.

Latest Episodes

Podcast 25: Dr. Steve Wendel on Investor Success

The latest episode of the Canadian Couch Potato podcast features an interview with Dr. Stephen Wendel, Head of Behavioural Science at Morningstar. Wendel heads up a research initiative called the Investor Success Project, which focuses on the human factors that dominate personal finance. So much discussion around financial well-being focuses on investing, but as Wendel points out in our interview, “In the finance industry, we often focus alpha, asset allocation and fees, but these are only important for people who have saved.” And according to his research, nearly half of all Americans have saved nothing for retirement. I don’t imagine the numbers are any more encouraging in Canada. Wendel and his team are devoted to helping investors overcome the many challenges they face in the effort to save more and enjoy a comfortable retirement. His specialty is understanding how people can close the gap between what they say they want to achieve and what they actually do. It’s fascinating work, and you can download the Investor Success Project white papers for free. One-fund vs. multi-ETF portfolios In the Ask the Spud segment of this episode, I answer a common question about the relative benefits between the popular new one-fund solutions [...]

July 9th, 2019|Tags: , , |20 Comments

Podcast 24: Mind Your Money Gaps with Preet Banerjee

In episode 24 of the Canadian Couch Potato podcast, I’m joined by Preet Banerjee, the Renaissance man of personal finance. After a stint as an investment advisor, which ended in disillusionment, Preet went on to become a media personality, an author, public speaker, fintech entrepreneur and academic. In our interview we discuss his current research on the plight of the Canadian investor, as well his latest project, called Money Gaps, an online tool designed to help advisors offer better financial planning services to their clients. The worst argument for active investing ever? In the Bad Investment Advice segment, I almost lose my composure responding to an article that recently appeared on the Forbes website called Why Most Index Funds and ETFs Are Not Good Investments. The author of this piece uses a common technique in the financial industry: he takes some seriously biased data compiled by an investment firm, dresses it up as a “study” and tries to pass it off as evidence that active funds should be expected to outperform index funds and ETFs. The term “study” suggests some academic rigor, but what we have here is actually a marketing piece created by Fidelity Investments to sell its active [...]

May 21st, 2019|Tags: , |10 Comments
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Podcast 23: Ask the Spud Edition

It’s been a while since our last CCP podcast, but we’re back with an all-new episode. This time I’ve devoted the whole show to answering questions from listeners and readers.  Here are some issues we address on the podcast: What is the likelihood of an ETF closing down, and what would be the consequences for investors if this happens? I touched on this issue in a blog post a few years ago. It’s important to understand what happens if an ETF closes its doors, because that can certainly happen. Usually the reason ETFs shut down is simply that they’re unable to attract enough assets to be profitable. In that case, the provider typically issues a press release announcing that the fund will be closed on a specific date: you can sell your units on the exchange any time before that and receive their fair market value. Remember, the value of any ETF or mutual fund is determined by its underlying holdings, and the stocks and bonds in the fund won’t be affected by its looming closure. So there is no reason to expect the fund will fall in value after it announces its pending demise. An ETF may also [...]

Podcast 22: How Smart Is Your Beta?

In episode 22 of the podcast, I revisit smart beta, one of the most significant trends in the ETF marketplace. To help explain what smart beta is, and the challenges faced by investors who use these strategies, I interviewed John West of Research Affiliates, a California-based firm that was one of the pioneers of smart beta ETFs. If you’re new to the idea of smart beta, you may want to start by flipping through a series of blogs I wrote on its theory and practice. These strategies fall somewhere between old-school active management and traditional index investing, because they are based on the idea that you can improve returns by building indexes that exclude some companies, and then weight the remaining ones in ways other than by their size in the market. There is definitely an attempt to do better than plain-vanilla index funds, but the rules are systematic, transparent and consistently applied rather than being entrusted to a fallible human manager. John has written some excellent white papers on the behavioural risks associated with smart beta strategies. I especially recommend The Biggest Failure in Investment Management: How Smart Beta Can Make It Better or Worse. The main takeaway is [...]

March 3rd, 2019|Tags: , |7 Comments

Podcast 21: Larry Swedroe on Investing in Retirement

In my final podcast episode of 2018, I’m joined by Larry Swedroe, who has long been one of my favourite authors on investing and financial planning. Larry and I discuss his latest book, Your Complete Guide to a Successful & Secure Retirement, and we focus on the challenges investors face as they approach the end of their careers. Larry’s book is written for an American audience, but it includes valuable information for investors on both sides of the border. One idea that resonated with me—because I have seen it first-hand—is that people have a tendency to worry more about their investments once they stop adding new money. As Swedroe writes: “Combine the challenge of finding a replacement for work with the increased investment risks … and retirees often begin obsessing about their portfolios. The time they used to spend at work is now spent watching CNBC, reading financial publications and browsing financial sites online.” It’s also common for retirees to ask whether they should remodel their portfolios to generate income. Many feel that traditional index funds are no longer appropriate and they feel they should focus on dividend stocks, REITs, corporate bonds, and even more adventurous investments, such as private [...]

December 20th, 2018|Tags: , |12 Comments
Advertisements

Podcast 20: One-Stop ETF Shopping

I’ve always tried to stress that successful investing is about the right process, not the right products. But good products certainly help. In the latest episode of the podcast, my guest is Todd Schlanger of Vanguard Canada, who was one of the architects behind the firm’s asset allocation ETFs, launched earlier this year to great fanfare in the DIY investing community. These globally diversified “funds of funds” are available in three versions: the Growth ETF Portfolio (VGRO) has a target of 80% stocks and 20% bonds, while the Balanced ETF Portfolio (VBAL) holds 60% stocks and the Conservative ETF Portfolio (VCNS) is 40% stocks. In each case, the underlying holdings are seven other Vanguard ETFs. In our interview, Todd discusses the thought process behind the construction of these new funds. We discuss the decisions to include global bonds, to overweight Canada (home bias), to use currency hedging for the bonds but not the stocks, and how frequently the funds are rebalanced. A few times in the discussion we mention a white paper that Todd recently co-wrote on this subject: the title is Vanguard asset allocation ETFs:  A simple yet sophisticated approach to portfolio construction. Changing course In the Bad Investment [...]

November 10th, 2018|Tags: |24 Comments