Who Should Invest in (Cap Weighted) Index Funds? (EP.227)

<p>In today’s episode, we pull relevant quotes from past guests (namely John Cochrane, Gene Fama, and Jonathan Berk) to extricate who should own market cap funds. We look at the variable risks of value stocks and factor investing and hear counter-views on owning the market. We also delve into the hot topic of tax loss selling, with an overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. This episode will get you up to date on the biggest finance news of the week, from crypto collapses to Amazon’s catapulting gains and losses. Tune in to hear all of this and more, including a recap of our conversation with Dave Goetsch and our Financial Literacy Month book reviews. </p> <p> </p> <p><strong>Key Points From This Episode:</strong></p> <p> </p> <ul> <li>A neat way to keep track of the value of your purchases over time. <strong>(0:00:33)</strong></li> <li>The results of the Rational Reminder financial literacy survey. <strong>(0:02:44)</strong></li> <li>An overview of this episode’s topics. <strong>(0:05:45)</strong></li> <li>Who should invest in market cap-weighted index funds. <strong>(0:07:28)</strong></li> <li>How to determine whether you’re different from the average investor. <strong>(0:16:13)</strong></li> <li>Gene Fama’s take on the possibility of identifying state factors. <strong>(0:22:13)</strong></li> <li>The variable risks of value stocks. <strong>(0:23:25)</strong></li> <li>What drives people to increase their value tilts over time. <strong>(0:25:11)</strong></li> <li>The risks of factor investing, and trading in general. <strong>(0:28:26)</strong></li> <li>Jonathan Berk’s take on owning the market. <strong>(0:31:53)</strong></li> <li>A summary of who should invest in total market index funds. <strong>(0:33:20)</strong></li> <li>The big crypto news of the week! <strong>(0:38:21)</strong></li> <li>Other significant market news. <strong>(0:42:17)</strong></li> <li>An overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, so