ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments

<p>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book <em>Investment Mistakes Even Smart Investors Make and How to Avoid Them</em>. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?</p><p><strong>LEARNING: </strong>Great companies are not always high-return investments. Understand how the price paid affects returns. Rebalance your portfolio regularly.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“Rebalancing forces you to do the opposite of what most people do, which is dumbly chasing returns and ignoring the historical evidence. They ignore the fact that typically, over the longer term, prices tend to revert to some mean.”</strong></blockquote><blockquote class="ql-align-center">Larry Swedroe</blockquote><p>&nbsp;</p><p>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at <a href="https://buckinghamwealthpartners.com/" rel="noopener noreferrer" target="_blank">Buckingham Wealth Partners</a>. You can learn more about Larry’s Worst Investment Ever story on <a href="https://myworstinvestmentever.com/ep645-larry-swedroe-beware-of-idiosyncratic-risks/" rel="noopener noreferrer" target="_blank">Ep645: Beware of Idiosyncratic Risks</a>.</p><p>Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book <a href="https://amzn.to/3WZgNFA" rel="noopener noreferrer" target="_blank"><em>Investment Mistakes Even Smart Investors Make and How to Avoid Them</em></a>. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: