ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes

<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 fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?</p><p><strong>LEARNING:</strong> Always run a regression analysis against an asset pricing model on portfoliovisualizer.com. Actively managed funds have higher tax expenses than ETFs and mutual funds.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“If you want to see if an active manager is truly outperforming and their appropriate risk-adjusted benchmark, run a regression analysis against an asset pricing model on portfoliovisualizer.com.”</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 fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?</p><p>Did you m