WHAT CAN YOU DO NOW THAT YOU ARE AWARE OF THE ILLUSIONS?: ILLUSIONS OF INVESTING, PART 5
Paul Adams
Helping clients Design and Build a Good Life - Founder/CEO/Podcaster/Entrepreneur
EPISODE SUMMARY
In this episode of Your Business, Your Wealth, Paul and Cory continue their discussion on illusions of investing in the marketplace. In part five of this series, Paul and Cory discuss what you can do now that you’re aware of these illusions of investing. They share and analyze the concept of Passive Structured Investing and explain how to build and maintain an investing portfolio. Paul expounds on the Modern Portfolio Theory, the Four Factor Model, and the importance of client education and coaching. Finally, Paul and Cory take the audience through Sound Financial Group’s Passive Structured Investing Model and provide different examples of how they allocate and diversify financial portfolios to navigate the market.
WHAT WAS COVERED
01:34 – Cory recaps the topics of the last four episodes on illusions in the marketplace
03:11 – Introducing today’s topic, Illusions of Investing Part 5: What Can You Do Now That You Are Aware?
04:39 – Why markets work
07:38 – Modern Portfolio Theory
13:31 – Building a portfolio
14:55 – The Four Factor Model
17:37 – The golf analogy
19:34 – Paul interrupts the podcast to provide the audience with a special offer
20:36 – Factor One: The Market Factor
22:02 – Factor Two: The Size Factor
23:24 – Factor Three: The Value Factor
24:58 – Factor Four: The Profitability Factor
26:37 – The importance of coaching and education around your money
31:26 – The value of having virtual financial consultants
33:56 – Sound Financial Group’s Passive Structured Investing Model
41:13 – Paul encourages listeners to take the time to explore the option of a second opinion on your investments
43:27 – Paul encourages listeners to reach out and leave a review on the podcastsde
TWEETABLES
I think people give too much credit to the market for the rates of return and they don’t give enough credit to their own behavior for what that does to the rate of return.
The Efficient Frontier is this horizon on a graph that allows you to understand, ‘Oh, if I’m going to take this much risk, then this should be my anticipated return.
91.5 percent of a portfolio’s performance is dependent upon the allocation you choose and the discipline by which you rebalance.
When investing, there’s only four areas that have been proven to consistently and predictively produce additional returns and be worth the cost to execute.
The more profitable companies outperform by about one percent, but do so with less volatility than the regular, large-cap growth stocks.
I would encourage you to make sure, for that reason so that the coaching is accessible to you, that you build a team that is virtual or has the ability to be so.
I think, all told, the most accessible and dependable wealth-building tool to all Americans is an academically allocated, globally diversified portfolio.
One of the most important things that should happen is that your investments should be creating the future you want, not just a return in the current year.
To listen to the full episode, and read show notes, which includes a FREE PDF of the transcription, visit: https://sfgwa.com/ep167.