This week on The Rational Reminder Podcast, we talk about the relationship between asset allocation and outcome, the ins, and outs of reverse mortgages, and finally, life insurance (or lack thereof) in Canada. However, we begin by sharing some interesting points covered in a recent Barry Ritholtz interview with Eugene Fama and David Booth for his Masters in Business show. We talk about how Booth started the first index fund and discovered the value factor, and quote some of Fama’s classic perspectives on behavioral finance and market bubbles. On the topic of asset location, Ben shares some of the findings of his recent research. He weighs in on his surprising discoveries about how to go about investing stocks and bonds in RRSP and taxable accounts to get the maximum yields. One of his main takeaways is the concept of putting bonds in your RRSP to intentionally trick yourself into a more aggressive portfolio. Regarding reverse mortgages, we begin with some definitions and explanations of why they might be beneficial and then cover the question of whether or not they are the symptom of a ‘debt-addicted’ society. Finally, we end off by discussing a recent study by Policy Advisor which found some shocking facts about how Canadians are drastically underinsured. Key Points From This Podcast Episode: 2:27 The difficulty of predicting stock returns based on rate changes; Discussing the Barry Ritholtz interview with Eugene Fama and David Booth. 9:18 Efficient markets aren’t necessarily rational; Considering the role of expected return in making investment decisions; Jim Simons and the mystery of the success of Renaissance Technologies. 14:25 How lead generation and aggressive sales shut Planswell down. 17:02 Vanguard is restructuring its fees and lowering its VXC; Why pre-tax asset allocation doesn’t affect expected outcomes. 20:56 Bonds in an RRSP give a better expected outcome than in a taxable account. 28:29 Why a more aggressive portfolio as far as asset location is good; The pretax drawdown difference between all bonds and all stocks in an RRSP. 30:29 Future outcomes can still be detrimental to an initially optimal asset location. 31:17 It is important for people to think of their asset allocation in after-tax terms. 32:39 Drawing on reverse mortgages to fund retirement spending. 39:15 A Policy Advisor study finds that Canadians are drastically uninsured; Shocking statistics on the underinsurance of Canadians. Books From Today’s Episode: Reverse Mortgages: How to Reverse Mortgages to Secure Your Retirement - https://amzn.to/35UghA5 The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution - https://amzn.to/2YsFOwd Links From Today’s Episode: Rational Reminder Website - https://rationalreminder.ca/podcast/72 Bloomberg Opinion: 'Masters in Business: Eugene Fama and David Booth' (11/05/2019) - https://www.youtube.com/watch?v=HRNczGwcTVQ MIB Live (Replay) with Eugene Fama and David Booth - https://podcasts.apple.com/ca/podcast/mib-live-replay-with-eugene-fama-and-david-booth/id730188152?i=1000456238942 Efficient Capital Markets Explained - https://www.youtube.com/watch?v=yco0sC7AJ2U Optimal Asset Location - https://www.pwlcapital.com/wp-content/uploads/2019/11/2019-11-14_PWL_WP_B-Felix_Optimal-Asset-Location.pdf Planswell - https://planswell.com/ Vanguard Canada lowers fee on Global Index Equity ETF - https://www.newswire.ca/news-releases/vanguard-canada-lowers-fee-on-global-index-equity-etf-873221355.html Considering a reverse mortgage? Here’s what you need to know - https://www.moneysense.ca/spend/real-estate/how-does-reverse-mortgage-work/ Optimal Asset Location and Allocation with Taxable and Tax-Deferred Investing - https://personal.utdallas.edu/~hxz054000/JOFI_2.pdf You can find the Rational Reminder podcast on 🍏 Apple Podcasts: https://podcasts.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 🎤 Spotify Podcasts: https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA 🕵️‍♂️ Google Podcasts: https://podcasts.google.com/?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz as well as on all major podcatchers You can follow Cameron Passmore and Ben Felix on Twitter: ➡️ https://twitter.com/CameronPassmore ➡️ https://twitter.com/benjaminwfelix Check out Ben's YouTube channel. 📺 https://www.youtube.com/benfelixcsi Catch up on the latest in wealth management and investing insights from the Passmore-Felix Team at PWL Capital. https://www.pwlcapital.com/teams/passmore-felix/?utm_source=youtube&utm_medium=copy&utm_campaign=rr&utm_content=rrvideo The Rational Reminder is presented as an educational resource and should not be construed as individualized investment advice, nor as a recommendation to buy or sell specific securities. The funds and portfolios discussed are examples only and may not be appropriate for your individual circumstances. #rationalreminder #investing #podcast