The Long View

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.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on the podcast this week is Rupal Bhansali, Ariel's chief investment officer of international and global equities. She manages Ariel International and Ariel Global and also oversees Ariel's global-equity research team. Bhansali has nearly three decades' worth of experience. Prior to joining Ariel, she managed international-equity portfolios and served in leadership positions at MacKay Shields and Oppenheimer Capital. She also has experience in the hedge fund world, including a stint at Soros Fund Management. Background Information Rupal Bhansali bio  Morningstar Analyst Report for Ariel International Morningstar Analyst Report for Ariel Global "10 Questions With Rupal Bhansali" Investment philosophy Approach to global markets Approach to risk management  Non-Consensus Investing: Being Right When Everyone Else Is Wrong  Other Topics Referenced in This Episode "Banking Collapse of 2008: Three Weeks That Changed the World" Quantitative easing definition Regulation Fair Disclosure  Channel check definition Government Pension Investment Fund  Sovereign wealth fund definition "A $30 Billion Exodus Puts Hedge Funds for the Masses to the Test" Investors Still Pouring Money Into Passive Funds **About the Podcast:** *The Long View* is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at 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.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Our guest on the podcast today is Rob Arnott. Arnott is partner and chairman of the board of Research Affiliates, a firm he established in 2002, following stints at First Quadrant and Salomon Brothers. He also runs several prominent mutual funds, including PIMCO All Asset. In addition to these duties, Arnott is an accomplished thought leader, having published more than 100 articles in professional journals. Among other plaudits for his work, he has received seven Graham and Dodd Scrolls, awarded by the CFA Institute to the top financial analyst journal articles of the year. An innovator, Arnott popularized the concept of fundamental indexation, which some refer to as smart beta.  Background Information Rob Arnott bio  Research Affiliates website  Research Affiliates smart-beta interactive tool Research Affiliates asset-allocation interactive tool Financial Analysts Journal website  PIMCO All Asset PAAIX   "Fundamental Indexation," by Robert D. Arnott, Jason Hsu, and Philip Moore (2005, Financial Analysts Journal) Related Links Research Affiliates Forecasts Value strategy  High-dividend strategy Emerging-markets equity Low-volatility strategy Research Affiliates Research "Are Valuations Now Irrelevant?" by Rob Arnott (2019 Research Affiliates Advisor Symposium)  "If Factor Returns are Predictable, Why Is There an Investor Return Gap?" by Jason Hsu (November 2015, Research Affiliates) "Buy High and Sell Low With Index Funds!" by Rob Arnott, Vitali Kalesnik, and Lillian Wu (June 2018, Research Affiliates) "Too Big to Succeed," by Rob Arnott (June 2010, Research Affiliates) "The Incredible Shrinking Factor Return," by Rob Arnott, Vitali Kalesnik, and Lillian Wu (April 2017, Research Affiliates)  "How Can 'Smart Beta' Go Terribly Wrong?" by Rob Arnott, Noah Beck, Vitali Kalesnik, and John West (February 2016, Research Affiliates) "To Win With 'Smart Beta' Ask if the Price Is Right," by Rob Arnott, Noah Beck, and Vitali Kalesnik (June 2016, Research Affiliates) "Rob Arnott: 'I Want the Quant Community to Get Its Act Together," by Alex Steger (Feb. 28, 2019, Citywire)  "What Risk Matters? A Call for Papers!" by Rob Arnott (September/October 2003, Financial Analysts Journal)  "Who Is on the Other Side of the Trade?" by Jason Hsu (December 2013, Research Affiliates) Other Research Referenced "Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk," by William F. Sharpe (September 1964, The Journal of Finance) "Mind the Gap 2019," by Russel Kinnel (Aug. 15, 2019, Morningstar) "Alpha and the Paradox of Skill," by Michael J. Mauboussin and Dan Callahan (July 15, 2013, Credit Suisse)  About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver. About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas. To Share Feedback or a Guest Idea: Write us at 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.) Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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

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

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

Our guests for the latest installment of "The Long View," Maria Bruno and Joel Dickson, are both veterans of investment behemoth Vanguard.  Bruno is the head of U.S. wealth planning research at Vanguard, leading a team responsible for conducting research and analysis on a wide range of retirement, wealth planning, and portfolio construction topics. She also contributes to the oversight of the investment philosophy, methodology, and wealth management strategies supporting Vanguard's advisory products and services. Bruno is a Certified Financial Planner, and she's a fount of wisdom on many subjects, but especially retirement planning.  Dickson has worn many hats at Vanguard during his long career there. In his current position as Vanguard's global head of advice methodology, he oversees all investment methodology development for Vanguard's advice programs whose end consumers are individual investors.  The transcript for this podcast can be found here. Background Information Maria Bruno bio Joel Dickson bio  "The Planner and the Geek" podcast series Vanguard Research and Commentary Archive How Retirement Savers Can Play Catch-Up "It's the 'how much?' But then also how do you actually direct those savings?" (1:30-2:56) "It's such an idiosyncratic or individual sort of consideration from a planning standpoint; there are plenty of people that have little wealth but high income." Whether traditional tax-deferred accounts are automatically better than Roth for people playing catch-up on retirement savings. (2:57-5:53) "It's a little bit simpler when you're younger and accumulating." How basic savings and investing habits, combined with plan defaults, make the accumulation period much simpler than decumulation. (5:54-8:24) 'Off-Label Uses': Ways Supersavers Can Maximize Their Investments Aftertax 401(k): What it is and how heavy savers can take advantage of it. (10:41-12:55) After-Tax 401(k), Bogleheads Wiki entry "Should You Make Aftertax Contributions to Your 401(k)?" Morningstar.com article "Aftertax 401(k) vs. Taxable Account? Evaluating Options for High-Income Savers," Morningstar.com article "Heavy Savers, Meet the Mega-Backdoor Roth," Morningstar.com article Backdoor Roth IRA: How it works, who should consider, and potential pitfalls to be aware of. (12:56-16:34) "IRA Insights: The Benefits of a Backdoor Roth," Vanguard research "Backdoor IRAs: What You Need to Know," Morningstar.com article "There's more and more focus on minimizing income taxes during one's life than there is about avoiding estate taxes." Using a 529 as an additional tax-advantaged savings vehicle. (16:35-21:26) Navigating College Savings episode from The Planner and The Geek podcast Decumulation "How do I meet my goals today but then also make sure that I'm protecting myself down the road?" Why setting spending rates can be so tricky. (21:27-24:26) "Determining Withdrawal Rates Using Historical Data," research paper by William Bengen  William Bengen bio "How to Put a Dynamic Retirement Spending Strategy in Place," Vanguard research "Spending Trends Boost Safe Withdrawal Rate for Retirees," Morningstar.com video "The 4 Percent Rule Is Not Safe in a Low-Yield World," research paper by Michael Finke, David Blanchett, and Wade Pfau "We're telling people to, on average, oversave and underspend." Balancing longevity, sequence risk with spending and quality of life. (24:27-28:35) "Is There an Upside to Sequence of Return Risk?" Morningstar.com video  Exploring the Retirement Consumption Puzzle, research paper by David Blanchett  "At the end of the day you still kind of get to the same end result." How bucket portfolios may not look very different from traditionally allocated retirement portfolios. (28:36-31:30) "The Bucket Approach to Retirement Portfolio Allocation," Morningstar.com article "Retirees could be overexposed to equity risk." Whether retirees aren't derisking their portfolios. (31:31-32:41) "Best Practices for Portfolio Rebalancing," Vanguard research paper "Generations: Key Drivers of Investor Behavior," Vanguard research paper "The rules of thumb just don't work as well." Why managing taxes during retirement is necessarily an individualized process. (32:42-36:24) "Spending from a Portfolio: Implications of Withdrawal Order for Taxable Investors," Vanguard research paper "Here you're actually looking at strategies that could accelerate income taxes." How the post-retirement/pre-RMD years are a prime time to control future tax bills. (36:25-39:41) • "An IRA Conversion Sweet Spot," Morningstar.com video  • "Age Is Just a Number: Start Thinking About RMDs Now," Vanguard blog post • "Strategies for Annual Roth Conversions," Vanguard research • "But What If I Don't Want My RMD?," Vanguard research • "What to Do With RMDs You Don't Need," Morningstar.com article  Building Portfolios "You have human capital risk at the same time you have investment risk." How investors should think holistically about risk when building their portfolios. (39:42-44:37) "Vanguard ETF Strategic Model Portfolios," Vanguard research paper "Global Equity Investing: The Benefits of Diversification and Sizing Your Allocation," Vanguard research paper "Focus on the things that you can control." What to do if investment returns are muted in the future. (44:38-46:23) "What Fed Projections May Mean for Longer-Term Stock Returns," Vanguard research "Vanguard Economic and Market Outlook for 2019: Down but not Out," Vanguard research "Experts Forecast Long-Term Stock and Bond Returns: 2019 Edition," Morningstar.com article 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) "ETFs: For the Better or Bettor?," Vanguard research paper "Morningstar's 2018 Fee Study Finds That Prices Continue to Decline," Morningstar.com article "98% of the DNA is the same." Whether the benefits of ETFs relative to traditional index funds been overstated. (49:29-51:27) "ETFs Versus Mutual Funds: A Comparison," Vanguard research "Traditional Index Fund vs. ETF Cage Match," Morningstar.com article 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) "Helping Vanguard Personal Advisor Service Clients Understand the Anatomy of Our Methodology," Vanguard research The Robo-Advice Market Is Growing, but Changing, InvestmentNews article    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 Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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

Our guest on this week's installment of "The Long View" podcast is James Montier. Montier is a member of the asset-allocation team at Grantham, Mayo, Van Otterloo & Co. Before joining GMO in 2009, he was co-head of global strategy at Societe Generale. A prolific and incisive writer, Montier has authored several books, including Behavioural Investing: A Practitioner's Guide to Applying Behavioural Finance; Value Investing: Tools and Techniques for Intelligent Investment; and The Little Book of Behavioral Investing. He's also a regular contributor to GMO's library of white papers and research studies on topics ranging from productivity, strategic asset allocation, contrarianism, and more. In addition to his duties at GMO, Montier is also a visiting fellow at the University of Durham and a fellow of the Royal Society of Arts. Background  Grantham, Mayo, Van Otterloo & Co. Behavioural Investing: A Practitioner's Guide to Applying Behavioural Finance by James Montier  Value Investing: Tools and Techniques for Intelligent Investment by James Montier  The Little Book of Behavioral Investing: How Not to Be Your Own Worst Enemy by James Montier  GMO's research library   Montier's articles in GMO's research library  Montier's Role at GMO "My role is essentially to be difficult, and it turns out I'm quite good at that." Montier describes his role at GMO and how his contributions to the firm are measured. (1:10-3:11) Ben Inker bio  Fostering Debate at GMO "We have never had a house view." Why debate and constructive devil's advocacy is welcome at GMO. (3:12-4:31) "Investing is one of those fields where there is almost constant evidence that we are all wrong." How to foster humility and a diversity of views. (4:32-7:38) Debating Jeremy Grantham on mean reversion: Montier gives an example of an issue the team has debated recently--how long it takes for markets to revert to their long-term averages. (7:39-9:36) Jeremy Grantham bio  "This Time Seems Very, Very Different" by Jeremy Grantham (GMO Quarterly Letter, 1Q 2017)   "The S&P 500: Just Say No" by Matt Kadnar and James Montier (Aug. 15, 2017)  Forecasting and Portfolio Construction How the debate over mean reversion informs GMO's asset-class forecasts. (9:37-10:09) GMO 7-Year Asset Class Forecast (May 2019)  Corporate concentration and low interest rates: How GMO is reconsidering these variables and their impact on the asset-class forecasts it makes. (10:10-11:38) "The Idolatry of Interest Rates, Part II: Financial Heresy and Potential Utility in an ERP Framework" by James Montier and Ben Inker (Aug. 11, 2015) How GMO incorporates its asset-class forecasts into the multi-asset strategies it manages. (11:39-12:37) GMO Benchmark-Free Allocation III GBMFX   The appeal of a "robust" forecast that's meant to help portfolios withstand various potential outcomes. (12:38-14:15) "Our portfolios look a little freakish." Montier explains why GMO is U.S.-stock-phobic and, conversely, why the firm is finding value in alternatives. (14:16-18:04) GMO Benchmark-Free Allocation II Fund's asset allocation  Sir John Templeton: "If you want to have a better performance than the crowd, you must do things differently from the crowd." Career risk: Where individual investors hold an edge over institutions. (18:05-18:55) "Career Risk Is Likely to Always Dominate Investing" by Jeremy Grantham (Dec. 24, 2014, Finanz and Wirtschaft)  Alternatives Montier defines "alternatives." Different ways of owning standard risks--depression risk, inflation risk, and liquidity. (18:56-21:49) "The General Theory of Employment, Interest, and Money" by John Maynard Keynes  Montier presents two examples of alternative strategies that GMO employs--merger arbitrage and put-selling--to own standard risks in different ways. (21:50-25:49)  Merger-arbitrage definition   Put-selling definition  "Is This Purgatory, or Is It Hell?" by Ben Inker (GMO Quarterly Letter, 3Q 2014)  "We should size them such that they cannot hurt the overall fund should we get something wrong." How GMO sizes its positions in alternative strategies. (25:50-27:33)  GMO Systematic Global Macro Trust  Alpha, beta, and decay: How GMO assesses an alternative strategy's vulnerability to being arbitraged away. (27:34-29:57) GMO's Bearish U.S. Equity Forecast "How do I get paid for owning this asset?" Key inputs to GMO's U.S. equity forecast--multiple, margin, yield, and growth. (29:58-32:08) "Back to Basics: Six Questions to Consider Before Investing" by Ben Inker (Nov. 8, 2010)  "A behavioral self-defense mechanism." How GMO's approach to forecasting helps to structure its thinking and anchors decision-making. (32:09-34:54) "It's really valuation where we've been most wrong." Where GMO's U.S. equity forecast erred in recent years. (34:55-36:01) "We have to wear that. We have to own it." Montier on steps that GMO has taken to introspect on its forecasting error and how that expresses itself in the way it makes decisions and manages money. (36:02-39:45) Planning Amid a Dearth of Value "A reach for yield in any way, shape, or form." Explaining the dearth of value. (39:46-41:43) "The Deep Causes of Secular Stagnation and the Rise of Populism" by James Montier and Philip Pilkington (March 22, 2017)  "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) "Investing for Retirement: The Defined Contribution Challenge" by Ben Inker and Martin Tarlie (April 5, 2014) 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) "The Late Cycle Lament: The Dual Economy, Minsky Moments, and Other Concerns" by James Montier (Dec. 17, 2018)   "The Financial Instability Hypothesis" by Hyman P. Minsky (May 1992; The Jerome Levy Economics Institute of Bard College)  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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