Advisor Innovations Podcast: Dumb indexes, “Smart” Beta and Intelligent Design—How Larry Swedroe Helps Advisors Make Sense of Investments
For many advisors, Larry Swedroe needs no introduction; He’s the author of numerous books on investing, a frequent columnist in advisor publications, including Wealthmanagement.com, and the Head of Financial and Economic Research at Buckingham Strategic Wealth, one of the largest RIAs in the country.
He’s also active on social media where he can be found in sometimes heated debates with other industry luminaries on the merits of different compensation models for financial advisors, the dire prospects for most active stock managers, and what the latest academic research on investment management and the markets tells advisors about how to build better portfolios.
In this edition of the Advisor Innovations podcast, Swedroe describes how he views his work, why it is getting harder for active managers to generate alpha in the publicly traded markets, and where he sees opportunities for income in the increasingly accessible private markets.
Swedroe discusses:
- Why, in the face of growing evidence of subpar long-term returns, retail investors and active stock managers are proliferating.
- How a three-year track record tells investors almost nothing about a manager’s long-term prospects.
- Why “dumb indexes” don’t solve the investors’ problem, and why “smart beta” is an oxymoron and how investors are best served by “intelligently designed” portfolios.
- How some research shows stock turnover and management fees are the two variables that can determine active managers’ outcomes.
- Why easier access to private markets for investors, including interval funds, are a good option for some investors—himself included.
- Where he is placing some of his investments now.
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About Our Guest:
Larry Swedroe is a principal and the director of research of Buckingham Asset Management[1] and BAM Advisor Services. Previously, Larry was Vice-Chairman of Prudential Home Mortgage, the nation’s second largest home mortgage lender. He has held positions at Citicorp as Senior Vice-President and Regional Treasurer, responsible for treasury, foreign exchange and investment banking activities, including risk management strategies. Larry has an MBA in Finance and Investment from NYU, and a BA in Finance from Baruch College. He is the author of 17 books.
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