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Content provided by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://staging.podcastplayer.com/legal.
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Episode 343 - How to Choose an Asset Allocation

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Manage episode 465279787 series 3425104
Content provided by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://staging.podcastplayer.com/legal.

Choosing an asset allocation is a crucial investment decision, as it determines expected returns and risk exposure. During this episode, we uncover what this means, exploring topics such as why risk may not always be the best assessment method. We unpack the three factors that John Grable’s risk profiling framework considers: behavioural loss tolerance, the ability to take risk (which assesses the financial capacity to withstand losses without affecting lifestyle), and the need to take risk. Many investors sabotage their returns by selling after losses and buying after gains, and we discuss the reasons behind this. We also explore why stocks tend to become less risky over long horizons, while bonds can be vulnerable to inflation and interest rate changes, before explaining why investors should focus on compensated risks. In the aftershow, we address listener comments on absolute returns, XEQT, why we have made certain sponsorship decisions, and more. To gain a deeper understanding of risk and avoid common pitfalls that can undermine your returns, tune in today!

Key Points From This Episode:

(0:05:10) The critical importance of choosing an asset allocation and understanding risk.

(0:08:35) How behavioural loss tolerance impacts asset allocation.

(0:18:42) Psychological theory on risk tolerance and willingness to engage in financial behavior.

(0:30:48) Assessing your need to take risks.

(0:39:24) Why market volatility is not where the true risks lie.

(0:47:42) Private credit, other portfolio alternatives, and GICs.

(0:53:03) The aftershow: demystifying the AMA controversy.

(1:00:20) Absolute returns, XEQT, and sponsorship on the Rational Reminder. (1:12:05) An update on Ben’s health and what he has learned from this experience.

Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — [email protected]Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/

Canadian Couch Potato Blog — https://canadiancouchpotato.com/

Canadian Couch Potato Podcast — https://canadiancouchpotato.com/podcast/

Papers From Today’s Episode:

'The Grable and Lytton risk-tolerance scale: a 15-year retrospective’ — https://static.arnaudsylvain.fr/2017/03/The-Grable-and-Lytton-risk-tolerance-scale-15-year-retrospective.pdf

  continue reading

379 episodes

Artwork
iconShare
 
Manage episode 465279787 series 3425104
Content provided by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Benjamin Felix, Cameron Passmore, and Dan Bortolotti or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://staging.podcastplayer.com/legal.

Choosing an asset allocation is a crucial investment decision, as it determines expected returns and risk exposure. During this episode, we uncover what this means, exploring topics such as why risk may not always be the best assessment method. We unpack the three factors that John Grable’s risk profiling framework considers: behavioural loss tolerance, the ability to take risk (which assesses the financial capacity to withstand losses without affecting lifestyle), and the need to take risk. Many investors sabotage their returns by selling after losses and buying after gains, and we discuss the reasons behind this. We also explore why stocks tend to become less risky over long horizons, while bonds can be vulnerable to inflation and interest rate changes, before explaining why investors should focus on compensated risks. In the aftershow, we address listener comments on absolute returns, XEQT, why we have made certain sponsorship decisions, and more. To gain a deeper understanding of risk and avoid common pitfalls that can undermine your returns, tune in today!

Key Points From This Episode:

(0:05:10) The critical importance of choosing an asset allocation and understanding risk.

(0:08:35) How behavioural loss tolerance impacts asset allocation.

(0:18:42) Psychological theory on risk tolerance and willingness to engage in financial behavior.

(0:30:48) Assessing your need to take risks.

(0:39:24) Why market volatility is not where the true risks lie.

(0:47:42) Private credit, other portfolio alternatives, and GICs.

(0:53:03) The aftershow: demystifying the AMA controversy.

(1:00:20) Absolute returns, XEQT, and sponsorship on the Rational Reminder. (1:12:05) An update on Ben’s health and what he has learned from this experience.

Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — [email protected]Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/

Canadian Couch Potato Blog — https://canadiancouchpotato.com/

Canadian Couch Potato Podcast — https://canadiancouchpotato.com/podcast/

Papers From Today’s Episode:

'The Grable and Lytton risk-tolerance scale: a 15-year retrospective’ — https://static.arnaudsylvain.fr/2017/03/The-Grable-and-Lytton-risk-tolerance-scale-15-year-retrospective.pdf

  continue reading

379 episodes

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