Welcome the money for the rest of us. This is a personal financial on money, how IT works, how to invest IT and how to live without worrying about IT. And we host David stein.
And today is a bonus episode of money for the rest of us. I want to to share an interview that I did with for a discussion really with Billy amant and Becky heptagon. They are the cohoes of the podcast and website, catching up to fight financial independence for late starters.
I was on their show couple months ago, and later I was listening to the interview about an hour long, little over an hour, and answering their questions, which were based on my book, money for the rest of us. Ten questions to measure successful sting. But I I definitely expounded.
I am because it's been three, four years since that book came out. I have additional thoughts on these topics and I realized this. Our discussion really encapsulates my investment philosophy, my approach to investing today.
And I thought well, so often with with the podcast were covering specific topics and we don't ever sort of zoom out and get a larger picture of my approach to investing. Now we recently upgraded our email series for those that join the insiders guide email list that that captures many of of those aspects, my approach to investing. But this is a podcast, and I wanted to share IT with you. I appreciate Becky and bill having me on the show. I think you will enjoy this discussion as we look at a thematic approach to investing both to save for retirement and during retirement low and .
walk back to catching up to fy. I'm bill in my cohoes becking haptic g, and today we haven't exciting guest for you. David is time who helps individuals become Better and more confident investors to his writing audio video.
David host to personal finance podcast money for the rest of us. The show has over twenty million downloads and reaches more than forty thousand listeners per episode prior launching his broadcast over eight years. David advice and manage access for institutions and financial planner.
He was chief investment strategist and chief portfolio strategist for fund evaluation group l they would perfect IT as teaching style. As an investment consultant to numerous not for profit institutions is book money for the rest of us. Ten questions. Master successful investing is different from many of the investing books or audience may have read. IT is pivotal in helping quote the rest of us and, quote, make less emotional and risk conscious ous decisions when making any investment. I've been interacted with David virtually for a few years now, starting shortly after I stumbled across this podcast while I was lost on a little hike not too far from my home one day, his wisdom has helped me make Better and more knowledge able decisions with my investing. IT is with great pleasure that we welcome David to catching up to fy.
great to be here. Thanks for having me.
Well, thanks for being here with us. Let's jump right in. So who is the rest of us, David?
The rest of us. First half name money for the rest was came from a marketing friend of mine, burnett ja and SHE says I have a book title for yet money for the rest of us and SHE didn't define who rest of us is. So it's sort of in my mind, over the years, it's those of us individual story for stuff that aren't working on wall street, are just trying to save an invest for retirement or in retirement.
And so we're not investing experts. So how do we navigate an increasingly complex world of finance and investing when we're not experts? And so the the goal of money for the rest of us, the book, the podcast, the membership of community, is to really be a guide to help individuals sort of managed this very, very complex domain of investing in finance.
In your book, you quota Davis, who is a rounded investor and market technician, saying, we are the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes and the losers make big mistakes.
You also quote a great person called any duke professional poker player on the author of thinking in that making smarter decisions when you don't have all the facts and SHE states, what makes a great decision is not that he has a great outcome. A great decision is a result of a good process. Decisions are bets on the future. They aren't write wrong based on whether they turn out well on a particular generation, and unwanted result doesn't make our decision wrong if we thought about the alternatives and probabilities in advance and allocated our resources accordingly. Your book is like a quality control checklist at night.
IT really is. And with the idea of keeping our mistakes small, because we all make mistakes, we are all investing, not knowing what the future will be. And in the whole idea is how I spent couple decades as a professional investor, managing assets mostly for institutional clients.
And when I quit in in my mid forties, I spent about ten days in mexico just writing and thinking about investing. And in the theme was like, how do we invest in the world where nobody can predict the future and actually know what's going to happen? Yet many investors think they can and and the entire premise of investing is we think this is gona happen.
We believe this gonna happen, and then we make a choice when in reality, we have no idea what's going to happen. And which makes IT to me of an incredibly intriguing problem, because we have a lot of financial stake. But so how what's this process, what this checklist for investing when you don't know what's gonna en. And that was sort of the theme in a book in the podcast. And what we've been teaching for just bad a decade now have money for the rest of us.
David, I I was thinking about this and the fact that this book is like a checklist. My older son is a pilot for the air force and for united airlines, and he has a checklist he goes through every single time before he takes off in the airplane. And I talked to him yesterday about this, and he said, well, my checklist is a procedural checklist to try to eliminate areas and emissions.
But he said, this is more because money is emotional and a behavioral issue. So your book is a way for us to eliminate behavioral bias. And I think that's what you we're just talking about is our we're trying to rain in our behaviors.
H exactly. And was built at a quality control check. So it's investing can feel it's sort of the shiny toy syndrome. Something comes along or but it's talking about to the ecliptic currency or treasure inflation protected securities or or anything. And we get oxx cited and so much of personal finance hype newsletters.
Is that like i'm gonna a teach you to make millions and an individual in your podcast is catching up to fine people that feel like they're behind are specially vulnerable to be taken in by over promises. And I believe I talk about IT in the book where one of the a sponsors to a podcast for while is sleep number bed. And so we we, I get tired talking about the sleeve number pillow ice.
We're gonna go scope by the bed, so about the bed and and the salesman was so excited about investing and trading that he barely tried to even sell list a bed. But he had spent twenty five thousand dollars to learn how to trade individual security options, foreign currency. And because he was behind, and he had admit he was behind, so he took his inheritance, so much of his inheritance, to learn how to trade.
And I, and this was a guy that way out of his element. And so I said, well worth s trading academy, this was in phoenix. So I went to the academy for two to three hours for their pitch.
And IT was basically people in my age that were feeling like they were behind. And that was the thing you're behind. The only way you're going to catch up is learn how to trade options and foreign currencies, which is crazy because that's A A losers game there for every winner in born currency, somebody has to lose.
And invariably that the individual invest, in fact, their entire patteran process that they had. And I found the pattern IT says, basically, we teach investors how to take advantage of other more naive investors. And that's the market and that's what people supposedly. And so the point is having a process, having a checkless, in some ways, it's a guy that IT helps us eliminate a dump things because of the emotion, because we feel like we're behind. So we we're going to have to make fifteen, twenty percent analyze returns or more, which isn't possible in today's world.
Yeah, I learned about the checklist when I was in meet school on the surgeons use one. They don't want to cut off the wrong leg. So when there in the Operating room, they run through a jacket less, they mark the leg and they make sure that they don't make those big mistakes. You actually learned about the value of a checklist when you are a youth packing boxes, did you? That, yeah.
I think college worked at an office products warehouse. And if so, we would push around these cars and we would be a list that you would go through. And and and you would put, see this, they want so many pens or so many staples or things like that.
We put them in the car, and we put them in the box, and then they ship the box. And I thought IT was good. I was in college. I, I, H, I pretty easy.
You could listen to some music or the radio was playing, and you go around and then they decided that if you made an air, they would put a yellow marker on IT, and then they would hammer the, or they put the the first water on a nail. And I think I we're onna keep score that's exciting. And I remember after the first three days, I had this this thing of paper of missed orders.
And I and I couldn't believe IT, because when you're in in the process, you got what I got IT. And and so I to change my process to basically check the order twice, like I would look at IT, I would get IT, I would put the pens in the box, and then I would double checking, make sure I got the right thing, and and that just that simple additional step is out of measured twice, saw once type thing. I was able to reduce the airs in that particular situation. And so checklist are important, both controller emotions, but help to guide us and eliminate need. This mistakes.
you compare the ten questions to a claude mirror. I found this fascinating. You want to trip to the grand canyon, and i've been to this stone houseful, whatever. And you turn around backers, and you look at the grand canyon through this clod mirror. Can you describe what that is and how that helps you frame the ten questions?
We sure. So basically you got this giant vista of the grand canyon and yet is mere that I think it's on the IT would be on the outside of the can in at one of the old sort of cabin things that you but basically IT reduces a vision. So if IT just frames IT and IT puts a box around sort of the vision of the grand canal helps you to focus on that particular element of the grand canyon and uh A A checklist or like the ten questions that we use at monday for the rest of us.
That helps frame this very, very complex financial and investment system and into the things that are that this basically help us to focus so that it's not as overwhelming yeah because investing can feel overwhelming and the whole idea, let's narrow focus to the principles, the drive returns that help us to make good decisions. Decisions will we recognize. We don't know what's going to happen. So we do the best with what we have, what we do know and invest that way.
So let's jump into those ten questions. And question never won is what is IT, which sounds a very basic, but I think a lot of people probably don't even think about this step and just keep right over IT. So talk to us about a defining what is an investment.
Well, yeah, this is this is very important. And I and I learned this from one of my institutional clients, so is the university and downwind and the investment committee chair told me that as committee chair, he won't approve anything. I recommend anything that he any type of investment that he couldn't explain to the overall board of the university who warn at the meetings.
And he realized that that's a good rule. If we're gonna enter a new investment, we or any knew enew, we should be able to explain IT to a friend or a family member, because the act of trying to explain something actually humbles us. And we realized, well, there's things that maybe, I don't know, IT as well.
Not that we had to be an expert on IT, but we ought to like, take this. This matters. So this bed sales person, he couldn't really explain how this trading process worked.
And and IT was credit. He wasn't actually playing with real money yet. He was practicing. But we need to be able to define what the investment is in the sort of the other nine questions in the book are really are things that we should be able to to tell somebody is.
So what is the question? Number two is what's the difference between investing speculating in gambling? Well, in an investment is something with a positive expected return. So IT could be a piece of realist where you're receiving rent. IT could be an index mutual funder etf where there's a percentage the profits from the public trade stocks comes to you in the form of dividends.
So it's something where there is an element to IT where we can not know in the future but have a very good base case that we're going to make money because we're receiving dividends, were receiving the interest we're receiving. The rats is very different from a gamble, a gamble. IT is something where you got a veggies and the underside against you.
The the last vegas exist because the house always wins over multiple iterations. And so IT has a negative expected or return that the only reason when gambles is for fun. You don't gamble to make money because you want over the long term or the vast majority of people want, in fact, that the gambler ers that consistently make money to kick out of the casino because that's not the business model.
And then the different then in between is a speculation. So a speculation is is like foreign currency trading, it's investing in gold or bitcoin where there's some disagreement on what the Price should be, but the prospects could be because there isn't any cash low valuable to figure out what this is, what it's work. If you buy a house in your nights hood, you can compare to other houses, you can see what houses are renting for, and you get a very good idea like yours with these houses relative to rent related to other houses.
But in investing gold, there isn't any rents with gold. It's just worth whatever people think it's gonna be worth back with goal. There isn't really any other other underline.
You, except for jury, is not even use in very, very limited use and industrial things. And so that's a frame in enough itself that question. Here's an new opportunity. Is this an investment positive expected return hopeful ly with cash ler, is IT, uh, a gamble where, I don't know, I don't know, I know so little about this. Migrants perturb potentially are negative or is IT somewhere in between a speculation where there's some disagreement and not that we don't have speculations in our portfolio upwards of ten percent or more mi portfolio or speculation, but they're not the workforce of my portfolio that its cash lia generating compounding assets like I think you interviewed b burger a few weeks ago and he talked about compounding and that's why you went cash. Look is a compound over time and that that what grows wealth?
A couple of terms. And circling back that I really like in your investment philosophy, your thesis, you talk about what does IT mean to invest in a leading edge of the present as supposed to using windows of history returns. Can you explain that to us?
Yeah, this gets back to really to question three is what is the upside is is sort of having a base case of understanding that what is a reasonable return but say, for stocks and stocks return to generated by, as I mentioned, the dividends. So that portion of profits paid out to investors.
And if you're in a stock index metal fund right now, that divided yells around two and a half to three percent, and then those companies, thousands of companies, their earnings grow over time. So that dividend increases and that those two elements is what drive as most of stock turns, what's the dividends? However, earnings, the division growing over time.
And right now, a reasonable expectation for stocks is around seven to eight percent because you have divided and yelled to three percent, earnings robed five percent. That's an eight percent return. But then there's the third element, which is the emotion.
The first two words, really the math of investing the sec. The third one is emotion. What are investors paying for those cash lers? If they are super exuberant, they might be paying a lot or those cash allies.
And that pushes down the dividend yield in the increases, which known as and the case of stocks, the Price to earning to issue what our investors paying for that dollar worth of earnings. And so the idea is that we need to know what the markets temperatures because when stocks are super expensive, that lowers are expected to return. And so when I talk about investigating the leading edge of the present, we're just figuring out where are we today? Where is the market temperature today? Is that is IT super expensive and IT could be stocks.
IT could be real estate. If realities in a bubble, it's not necessary a great time to to purchase real state. And so just being aware where we are today, the present, when I call the leading edge of the present, helps us make Better, more grounded decisions rather than just guessing IT or having no idea.
And so I think there is A A certain level education we need as investors not to be experts, but we can totally our divorce from investing or knowing where things are because that can lead to a big mistake when we see this are often. So I get super excited about particular realistic opportunity. Uh, so for example, but in the U S, that changed the rules in two thousand thirteen.
So IT was easier for real estate partnerships to raise money from individual investors, particularly individuals that they may not be wealthy. And there are a lot of, I would say, less than scruples or maybe naive realist partnerships that the attractive people like i'm going to we're onna give you ten, fifteen, twenty percent, analyze returns on this real estate. Well, the problem was a lot of these partnerships were during a time where real estate has gotten pretty Prices, especially apartments, and there was a lot of overbuilding of apartments, and then they were vulnus to integrate, rising and as integrates of rose IT was very difficult for these highly leveraged ed and dead partnerships to to be positive.
And so investors lost all their investment in many cases. But who didn't lose investments in that, right? If you look at the big institutional, real state players, they also had some apartment or maybe some hotels IT or a mls IT didn't work out or commercial office buildings, what did they do? They walked away and handed over the keys to the the bank.
But he was such a small percentage of their portfolio that IT doesn't make a difference. So as that's just a simple example of of diversification, but also recognizing kind of where we're at, which is sort of question for what's the downside, what's the worst thing that could happen to the investment if someone's put in damage money in a particular real video because they they trust a person, there is downside. The real estate in in the bigger downside is interest strates go up in the value that real state could fall and IT becomes more difficult to meet the debt service and costs depending on how to set up.
And so that's that's really important. And you to help investing understand the upside, what are the principles that drive the expected or returns and then what the downs was? What's the worst case scenario? How how could we potentially be ruined by this investment?
Let's cirl back to question three, which is what what is the upside again? How do we reply these rules to stocks and bonds? For example, how do we compare bond opportunities?
So so bonds are pretty tray forward. If it's a bond mutual ine and say A B N D, the banker total plan market etf, the the fun van are on the website though post what's called the yield to maturity, which is right now it's probably around for a half to five percent.
And without getting in the complexity bonds, that starting yield is actually a really good estimate for what bonds return for a long term investors to somebody he's holding that seven to ten years. And so that is a simple the upside of bond is, is an income generating asset. So you have interest rates to go up and down.
The bond bunder. E T. Often fluctuates, but over at a seven year period, even if interest rates go ups, the value of the fun microdot reinvesting the interest at higher, higher at higher interest rates.
And so that's just a simple so it's sort of a rule of thumb from investing in bonds, what's a reasonable expected return and that sort of the starting yield, the yelled to maturity with stocks is, is that process I talked about the and expectation for stocks would be what's the current division yield plus the earnings growth. And and combined, that's the gonna the ball of the return and assuming ing that we purchase IT at at a more reasonable valuation. And so just kind of knowing where we are in a granted that can feel overwhelming.
And that's why for some people, maybe if you're serving for retirement, a target data, target date metros, fine, let vanguard worry about the allocations over time and we can focus on on the saving component. But once we sort of want to start doing more than investing on our own, then we should at least have an understanding of what's what's a reasonable return version stated the simple calculation, if you work with a retirement calculator trying to figure, when can I retire? Well, what return do you use? Do you use backward looking returns? Or do you use returns based on the present, deleting out of the present? Well, we don't want to use backwards return and assume stocks.
We're gonna return twelve percent analyzed like they have for some periods because a portion of that twelve percent return was because stocks got more expensive over time, which may not be the case going forward. We don't want to we don't buy a hat when sometimes about how seeking the Price will always go up, but not dramatically up in terms of of stock because that way that means the the Price only try you keeps going higher and higher and higher, and there is no justification for that. And so just grounding ourselves in some basic understanding of what drives stock returns is incredible important, which is why we we this months ago ago, we launched uh, something of asset camp at asia camp outcome and IT basically takes the entire global stock market.
There are a over forty seven different indexes, and IT allow you compared how did U. S. Stocks do over the past decade? What drove the return? How much was the dividing? How much was the earnings? How much was because stocks get more expensive.
And this becomes particular important for just comparing U. S. Verses on U. S.
A lot of people say, I don't want to invest outside the U. S. Because U.
S. Always does Better. Well, no, IT doesn't, because IT depends on the drivers.
What was the division yielded? What the division yield on U. S.
Talks as one and a half percent, you can get twice as much non U. S. stocks.
Maybe the earnings were, uh, will be faster. But these are key elements, basic rules of thum to understand, invest. So David, on the downside.
you have a code in your book. The downside of an investment is a function of its potential loss and the personal harm caused by the laws. So what do you mean by bad? And specifically, what do you mean by personal harm?
Well, running out of money in retirement or not losing a retirement at the example of these investors that put the bulk of the retirement in one real estate partnership, in this case of thinking went down. And I think I was in housing and the partnership with bankrupt and they lost all their money.
What do you do if you're trying to say for retirement and you just lost eighty to nine and seven of retirement or the people that over trusted in an adviser that was promising fifteen percent returns and IT turned out to be upon this game. And so the downside is things that we can't recover from. If we have three percent of our investments in a particularly real deal and IT goes bad, we can recover from.
Now maybe we lost three percent or IT was an encrypted currency and a planted IT is overreaching without understanding the fundamentals, whether is, is, is a speculation and which which the downside was the worst thing that that we will personally be harmed because for for individual investors, risk is not violated, link stock market goes up and down. Risk is will be ruined if stocks lose sixty percent, which they can and have done historically and were a year from retirement and were ninety percent in stocks already retire and in the stock market falls sixty percent. And IT IT throws off a map. And so that's what the downside is.
Would you explain us the the terms of your issues, volatility and risk?
What's the difference? So risk is a basically bad thing. So what are bad things that could happen if I think of risk volatility? Just one measure of risk volatility is IT is a safe for stock market or housing market.
IT goes up, but IT goes down. And and volatility is in academic pane, is the traditional way that they measure risk. And the ideas something more volatile and has more swings up and down then is we should get paid more for for holding that.
Our approach to investing is like the in entire final answer or the math finance is sort of based on called modern a portfolio theory, or M P. T. We don't spend time on that because our definition of risk for investing is what I call the maximum drawdown down.
How much can we lose? What's the worst case for losing? And how long does IT typically take to recover? So I mentioned stocks, a worst case scenario, stocks is a sixty percent loss and IT can take five years and more to recoup those losses.
And so that's really risk as bad things. Volatility is one measure. We can also measure the maximum drawdown.
And in that, we're trying to void bad things that rule in our lives, basically to be same with health. Smoking is risky. why? Because they can kill us with with repeater exposure.
Not one cigarette, right? Which is another definition. I was on our member, for matter, on our community.
And we we are talking about this, that, and in the gentleman gave example, well, if there was a twenty percent chance of dying in the airplane, nobody would fly. But if there was one percent, now that seems pleasure escape. No, at one percent exposure are dying in airplane.
Nobody would do that either. It's going to be so, so small. Because if something do you have a half a percent chance of ruining, your retirement are dying.
But you keep taking that same bed over over again, like you're smoking one cigarette. Not gonna kill, but repeated exposure to a risk can destroy us eventually. And that's why I mention your son in in the checklist or airport.
I mean, there are so many redundancies build into flying that the idea is to reduce risk that I I did see an article the other day that apparently there's been a lot near misses on the tarmac and in flight because there's not enough air trafic controller. So there's a risk, a threat that now need to be managed and adJusting to. And we see the same thing all the time, different threats come up. We have to adapt and understand where we are.
The smoking analogy is interesting because JoNathan Clements, so we recently had on the show, said, why do people max out the form k when they smoke? Because are reducing their human capital and their lifetime capital. And so live for the present because max, your phone k doesn't make sense. what? smoking?
All right.
Alright, a question number five, who is on the other side of the trade? So why do we need to determine who's on the other side of the trade?
Because if so, let's say some people like to purchase individual stocks like typically maybe the F I. Community doesn't, but they want to. All right now, artificial intelligence, super exciting.
So people are going to go out and buy and I go buy the video or or wanna buy whatever exciting thing is happening. And it's a good company, and I think you're gonna make money. But uh, when you buy a stock, it's an auction market.
When we buy something, there's somebody selling to us. When we buy a car, we know this. We're more ware. We're buying a car. We're much more skeptical.
If you're buying a car, we wanted know what's wrong if one wrong with IT, why they selling IT? What do they know that we don't know. And so in in a car purchase or a house purchase, we're very aware of who's selling IT.
Why are they selling IT? What do they know that they're not disclosing? That's why we have all these these disclosure forms when we buy real day.
But we figure out by a stocks, somebody is selling IT to us. And with stocks, most of the trading are the on the other side, there are institutional investors. So there are super, super educated individuals.
IT may be computer algorithms, but they know something that we don't and they probably know more about this stock and video. Or I give example of foreign rents y like that. There is somebody y's taking the opposite side of the trade.
And so it's important with investing to to put the ads on our side. That's why we focus on cashle and that's why we focus on diversifying into index mutual E T. S. Because with a stock, you buy individual stock. The only reason to buy IT is because you think it's going to do Better than everybody expects because you have sort of this consensus of buyers and sellers, there's the going Price.
The only way that stocks is going to do Better and outperform the rest of the market is its surprises to the upsides like the video sells way more chips and anybody conceived because if everybody is already baked in, what's going to happen, and that doesn't happen in the stocks gonna fall. And so why we buy index mutual funds or E, T S, is there have thousands of companies and some surprise to the upside and do Better than expected. Some do worse than expected and the the Prices fall, but those positive surprises and negative surprises, they can switch out.
So what drives an index fun over time? It's the dividend, it's the cash flow, is the earnings growth, which is a factor of is the economy growing over time. So those drivers in that, we can control more that because we can see IT, we're buying an individual stock and don't or uh h some other take type thing and don't really understand who's selling IT to us and knowing that they're smarter than us, then we're likely to be disappointed.
One of the other things you talk about, the chapters active manager under performance. Can you tell what you mean by that and why that's important to us?
So back in the day, most if if you were saving for your time and he had you for one k IT had mutual funds in IT. And there the mutual fund is an investment vehicle. So you have a professional manager and they're picking, let's say, stocks and they're trying to figure out which of all the stocks maybe had fifty stocks in the portfolio.
And they are going through that process of figuring out which of those stocks are gonna do Better than everybody expects. So that process of building a more concentrated portfolio as opposed to an index mutual und that owns the entire market own thousand securities. That process is known as active management.
And if we looked at the studies IT, generally sixty to ninety percent of active managers under perform index mutual funds or E T S. So that's something we can control investor. We can and vest most of our assets in a passive index mutual fund or an exchange.
Try to find that just tracking some aspect of the market. So an example is V T is A D T F. It's a vanguard total worlds stock market etf.
IT has I think eight, nine thousand security that owns IT, has U S, and has not U S. And is incredibly diversified. So that's an example of a passive index.
But another example active is some investors say i'm gonna own v ti, so just the U S. Index one by vander. Well, that's an active bt because you're saying or we're saying the U S.
Stock market is going to do Better than the rest of the world. But the global stocks market currently only sixty percent U. S.
stocks. So were ignoring forty percent of the world and thinks that the other sixty is gone to continue to do Better. Well, that's an active bet.
A pass, a purely passive bet would be to own the global stock market, which is only sixty percent stop U. S. Stocks that the other four percent non U. S. And so that that's what we mean by act to manage IT.
It's that positioning that says, i'm right, the rest of the world is wrong, and i'm going to make more than the rest of world because of my active days. Before we continue, let me pause and share some words from this week. Sponsors, I bought a used denim coat from a reseller.
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Another thing you talk about in this chapter, which I think we need to define as efficient markets and other markets really efficient or simpson and farmer really .
right when we talk about what an efficient market is that that the idea with, say, a given stock that, that Price reflects all the available information, the consensus of investors that which if you're an active investor like we talk about, we're saying, no, that stock doesn't include all the information, that stock Prices can be wrong. And so I think I know something everyone else does and I will make more money because of that.
I'd i'd say generally speak and IT comes to individual stocks. It's incredibly difficult to outsmart everyone else. And IT shows up.
We already said we show that sixty to ninety percent of these active major funds trail, they lack the under perform because they're not smarter than everyone else. Where we can see some less sufficiently es is when IT comes to the asset class level. So baskets of security.
So the housing market, for example, if we think about buying a house in two thousand five, two thousand six, the Price got incredibly high. There was a lot of exuberance. There was a lot of fraud.
IT was very easy to take out alone, two lunch, three lunch, without any type of income verification. So he had individuals buying watch and houses, never even seeing seeing them two or three. And so the Price of house is kept going higher and higher and higher.
That's an inefficiency. They weren't Priced really reflecting the fundamental, the actual income of people, the rents. And so we can get as said, they get too expensive.
It's rare though most of the time things are sort of in the middle. They're not too expensive. They're not too cheap into eye voice invested even professionally.
I focus on asset classes. I don't care about the video. I mean, I like A I, but I don't want to invest in a way where I have to have smart everyone else. I want my investments to be driven by the cash hlo and the compounding over time without having to be smarter than everyone.
So today, what is admit by adaptive markets.
an adaptive market approach, and I sometimes call an asset garden approach, so we can just own, we can own vt, which is the vanguard global stock marketing. T, F. We can own B, N, D, which is the vanguard bond.
And we maybe go through calculator and we just say we put sixty percent in stocks, forty percent bonds for we rebaLance IT once year, and that's fine. IT works. Some people prefer to maybe make adjustments over time.
They want. And because they like investing, they want to learn more about IT. So they might add a particular element of the market that, that seems like because people very negative.
So let's say, various stocks. So a type of style where things are cheaper. So it's being willing to make adjustments over time based on on market conditions, based on what's expensive, what's cheap.
So another example would be we had an opportunity in the past year, even now to purchase inflation and response. So treasury inflation, protecting security. And without getting into the details, their yields hit the highest we've been in ten years.
And so we have members of our community that went out and and bought individual tips so they could lock in basically that two percent yill plus inflation, so that that's an adapt of adjustment. Like, alright, are mostly in B N. D.
But I would want to lock in this inflation protected yield on these inflation index pods. So I made an adaption to that. And that's all an adaptive approaches is willing to make adjustments as the marked change over time. But always grounded in these other questions is principles being able to explain what IT is, understand what's the upside, what what's the worst thing that could happen, the downside.
So in question number six, that is, what is the investment vehicle? So what are the attributes of an investment vehicle?
An investment vehicle is something it's a package that just like a car, and a car drives us around. An investment vehicle is something that holds take investment. So we've mentioned in this subset, we've mention index mutual funds that mutual fine is an investment vehicle.
So it's a structure that holds lots of different security. An exchange traded fun is is like a mutual fund, but IT trades during the day. So that's a different type of investment vehicle.
And so when we talk about the attributes, we want to know what IT is. We want to know what the fees are, what's a cost, what is a cost. We want to know what are the liquidity proficience, how easy is IT to get in and out?
Is that a private partnership where or even an individual property which gonna very hard to sell? Or is this something that we can like a money market fine, where we can just get out really easy? And so those are is the structure. It's understanding the fees, liquidity provision. So that would be some some of the attribute of an investment vehicle you .
describe for our audience the differences between open and advance, ds close and a funds that you talk about and act. 所以 etf, the one that were most from me with.
would be an open day muto fund. So again, this is an investment vehicle. As a professional manager, IT may be only one hundred stocks. They're making decisions over time and and that fun IT just trade once a day.
So the the fund managers look at the the administrators like here's the value of the individual stocks, here's the value of the overall portfolio, here's how many shares outstanding, and and then they divide the value, the portfolio by the shares outstanding. And that kids to was known as the net acid via. So what is one value? What is the value pressure? And then they look at the buying, sell waters.
And then then they execute those buys and cells at the necessary. So it's very simple. So if you trade a beautiful und IT doesn't happen right away.
You don't actually the trade doesn't s to happen until the end of the day. So that's the first thing. A closed and fund doesn't trade at the end of the day, the only way to buy is like a an open eto fund. But as a closed and fun IT IT trades on the stock market exchange and and as a result, people can get over excited and so the the Price of that closed and fun can differ from the net tivy. So we can sell at a discount or a premium, but there is IT doesn't it's not like an open image from the just trade.
At the end of the day, you get in and out with the close find, you have to go to the stock market, you go your broker and you have to buy IT, and you're probably buying at a Price differ than what is actually worth than that as a night. And then in etf is sort of a combination between the two, where IT trade on an exchange is a professional manage team that picking securities, but based on the structure, they are all these marked makers, authorized participants doing everything they can. And to keep the Price of the the etf in line, the market Price in line with the net asset.
Vo, and so one way to think about is open M, Y to fun. IT always trades at the Price, always equal net tivy. The closed and fun, the the Price always differs from the net set value, which is nice if we can buy IT at a discount.
And then in etf, the Price typically is very close to than that s very, but only because of all these actors in the background buying and selling shares of the T F, shares of the underline holdings of the E T. Are the saw stocks etf hold to IT. It's pretty close, but it's not exact.
And that's really the difference between the three. I primarily invest in etf because they're very close. They are more tax sufficient than open and metal funds. But i'll also do some let's call more speculations and closed and phones buying something at A A super big discount, hoping that discount will narrow over time.
If IT. Is there any fundamental difference between what's being held in those funds between cloth and open?
Well, each of them, uh, can own different things. So there are closed and funds that own just U. S.
Stocks, just like there are open image funds that just own U. S. Stocks, the portfolio might look exactly the same. But you with an investment vehicle like a an open end or close and finer etf there, there's a huge for ride of thinks I could do one advantage of a closed and fun because with an open and mutio y, one of the risk is everybody once out.
And so the manager has to start selling assets to meet redemptions, but with a closed and fund because that doesn't trade. At the end of the day, the only way to buy IT is to actually go on the market. A close to final in some cases, can own less liquid investments because they're never risk of having to sell all their investments because there isn't any way to get out of a closed in point unless you sell IT on an exchange and an etf against.
It's it's in between. There are people that is wasted that, that etf can shrink over time, get bigger over time, but we don't have to go down that road. But IT is sort of a hybrid of the two.
One of the problems with any T F. As you mentioned, your book as a flash crash.
Can you take us through that? yeah. So with a flash crash, that's where there's a disconnect between what the shares are worth.
And that S A value in the market Price. And IT is where the background players, authorized participants in the market makers and and IT could be. We're basically the the the Price the market Price is the etf drops suddenly twenty thirty percent.
So there's a big disconnect and usually he is resolved fairly quickly. But if you happen to go into the market and and sell your etf and IT happens to be a flash crash, and it's only happened really twice, maybe three times. So it's pretty rare.
E T, S. Have been tested now over decades. And so we can protect ourselves from flash crashes when we're buying an exchange trade fun with a simple al sway, just buying index mutual fun and open in fun.
And you always get the right Price, the Price at the end of the day. But if you buy any tf, you should do what's called a limit order or you say, this is the Price i'm willing to pay and it's somewhere between the bit and ask Price. Or just whatever they ask Price is what they're willing to sell for.
Then you put your limit order in I the as Prices twenty dollars a share, i'm willing to pay twenty dollars a share. And then the order will go through where is traditionally people just did in market order. I'll just take whatever the markets giving, and that's just that's unwise. We wanted know what we're paying before .
we buy somebody in question number seven, which is what does IT take to be successful. You talk about way finding. And you have a quote, IT is Better to be vegal right than precisely wrong. So what do you mean by way, finding and and talk to us about that quote?
We finding really is so we can take of Lewis and Clark pro. I were just did some traveling here, and I, to hope we resorted, we were at this ridge as superfusion climb that the leising Clark expedition went. And they had never been there before. They thought a new where they were, but they didn't fact.
They thought, because the native americans rate in that area fed him salmon, they thought that they were right by the ocean when, in reality, they were near the salmon river in the salmon spin and come out in or so miles up up that river system. So way finding is taking the tools we have, like we've talked about some of the the the rules for figuring out what's unexpected to return for stocks. And it's making decisions based on some rules of thun based on things we can control, buying, cash flow generating, asset veris, speculating in crypto currency.
We can control those things even though we don't know what's onna happen with let's a bitcoin. And I think people put an in ordinary amount of wealth in bitcoin when I was selling for sixty thousand her coin. And with bitcoin, you have to be precisely right or precisely wrong.
It's either gonna up or gonna go down. There is no cash though with, let's say, a piece of real state. They went to real state. Maybe the the Price goes down a little bit, but just still getting the rent over time.
So IT might not be a total loss, but being precisely right is there's only one answered binary gonna lose money or i'm gonna make money and I can't even control why and nobody knows what the right Price is that's being potentially being precisely wrong. Where's most of our investing? We're not really sure we have some guide post.
We don't know what the future is going to to be, and that's why we use things like checklist and principles and rules of farm to help guide our investments because we don't know what's going to happen. Just like Lewis and Clark, they had some compasses. They could use the stars.
They got helpers along the way, and like negative americans, and they brought all kinds, like they over brought stuff because they didn't know, but they thought to know. They knew they were gone out west to find the ocean, but they adapted over time. And that sort of when we talk about adaptive asset allocation being willing to adjust, we do the same thing for a retirement.
So I quit my job in mid forties, call myself sort of retired, and you could call I I fired. But fifty years is incredibly long time to retire like I don't want the be dependent on my investment portfolio for fifty years. So I did other projects, etta, as I was way finding this retirement over time and that would let to money for the rest of us.
But I didn't know how I was going to turn out. It's a constant experimenting, trying things out, figuring out what works. And we do that when we retire because we don't know how it's gonna out, which is why it's helpful to have add additional sources of income even if it's part time.
So we're not completely dependent on our stock portfolio, which I I would be terrified if my investment was dependent entirely on stocks. But people do IT all the time. Well, just going to get the dividends great. What if IT falls sixty five percent and that bar market happens last ten years this time? So that that's our ongoing chAllenge as way finders.
You also talk about this chapter dependable and less dependable return drivers. How do we identify these?
Well, they're not that many. They depend. But turn driver for bonds is interest.
And we've already talked about what's the current yield maturity right now. It's is five percent for bonds that's dependable. We're onna get that interest rate.
If we hold at seven years, we're gonna earn five percent. An undependable would be gold. We don't know what goals gonna do.
And over long term, IT kept up in inflation, but is a terrible inflation patch on a on a year to year basis. And so that that's not dependable. That's why it's a speculation.
We can't depend. We can't put all of our retirement funding goal and hope, hope it's onna turn out because we have no idea. And so we don't we we put five percent of our retirement perhaps in gold and put the rest in, in bonds and stocks because they have cash low.
And cash flow is dependable and it's a dependable return driver because IT may accept a good portion of the long term performance in the cash low compounds, a compounding, a casual is dependable. Speculating on a specific event happening and haven't be right about that is, is not dependable for investment. The .
question number eight is who's getting a cut? And we've talked about fees in smoother uh, previous episodes with other people, but let's talk about this one. So who is getting a cut and where do those fees come from?
They come from us type typical mutual fund or etf. There's there's an expense ratio. So and IT is published and we know what you are.
And so the fees that Better out there are A A high fee is generally coming out of our asset. So if we hire an investment advisor, they're charging a person half that's a percent half coming out of our return. And then if that advisors is putting us into, let's say, a mutual fund is the charge a commission.
So every time they buy the fine, IT costs five percent of our acts going into the fan. And so it's just recognizing and nothing's free, a financial advisers need to earn a living just like the the rest of us. And so we just need to beware what are the fees and other reasonable compare to what else is available. And and that's because we're paying and we want to make sure that we're getting our moneys worth for what we're paying.
So how would you suggest evaluating a fee? Because I think for a new investor that that's a pretty daunting task.
Well, I think our new investor, you invest in index metro funds in etf, so invest with vanguard or eye shares and the fees are always low and said you want to spend a lot of time worrying about IT. But if you want to hire and advise you to do a financial plan is often Better to do an early rate. I know what the fear or a one time financial plan fear of whatever that says, five thousand hours.
You know what IT is that's different than paying an ongoing as management fee to have them pick E T S for you that, that can get expensive over time. But whenever we hire somebody, do anything, we can find out the fees. But for etf, for index metro funds, something like like van got eyes shares because it's such a competitive marketplace, we know the fees are lows, so we don't have to spend that much time worrying about minister.
we also talk about rebalancing a portfolio. How do you look at IT that might be different from others?
Well, typically have a rebalancing. That means we have a natural target. So when you rebaLance, you have, this is my targeted sixty percent stocks, forty percent bond a year has gone past the market.
Well, now my portfolio is sixty five percent stocks, thirty five percent bonds. So I decided i'm going to sell five percent of my portfolio stocks and invested in bonds. So that's what rebalancing is.
But the given is you actually have a target in my portfolio. I don't have a target. I just sort to have I would I call up an asset garden.
So I have a variety of different asset types, different return drivers. I adjust that over time kind of an on ongoing basis because I like investing and on spending time to help make whatever haldol en changes per year. And so IT doesn't require me to rebaLance to a target because I don't have a firm target.
I just to happiness is garden and and with a variety of things going on. And then as things change, i'll make adjustments. And so these just just two approaches.
There's a strategy approach. We have strategic rebalancing and then there's more of an asa garden projects have a variety. It's more adaptations, more flexible. It's partly more time consuming, but it's just a different way of investing .
and that sort of leases into question number nine, which is how does IT impact your portfolio.
So right. So we as investors were building portfolio. So a portfolio is a basically a pool of different anodes types. So a foreign k baLance is a portfolio because there's different funds in there. There can be some stock funds and some fund funds.
And so when we make a new investment, a new house, an apartment, we want to understand like how does that impact the overall mix. So let's say we decide to sell three quarters of our stock portfolio to invest in one real estate fund or a building or if that's gonna a big impact. And so we want to understand, well, how liquid will I be at that point, we'll be able actually get cash flow to meet my expenses and retirement. And so these these portfolio decisions are just more how does the individual decision affect the overall pie?
One of the ways is that one of our community members recommends doing this is to use a website called portfolio visualizer that com. So you can put in all your assets and see what the impact really is as opposed to just guessing.
Yeah, I mean, that's that's one way to do what we visualized IT does a good job. Now we have a spread shit in our membership community where people can put IT in and they can see here's the expected to return of the current mix. Here's the worst case scenario, here's the ranges.
And so anything we can use tools to understand, watch the overall expectation in terms of return and and some measure risk for a portfolio is it's helpful to know because we don't again, we don't want invest blind played not having any idea, specially somebodies taking about retirement and retirement early. They wanted know. And it's a my approach.
Retirement is sort of like what wade far calls A A safety first approach. So I want most my expenses to be covered by guarantee sources of income. So so security, some type of annuity product, if you happen of pension.
And so then i'm not so dependent on the investment portfolio I have can actually take more risk there. So there's different ways to do that. That's a portfolio decision. How much of the retirement will be an annual ity, how much will be other assets?
One of the things that our community is focused on is optimization. And how does optimization really affect our portfolio? And why in the investment garden, where your portfolio more complicated, our audiences more focus on simplicity, why don't we buy just V T short term treasury's and tips in cash and chill? I don't want you just V, T, S, X short time treasurer and cash.
Our audience is focus more and simply ity. But this optimization and these simper focuses. Is this that still get us where you want to go as opposed to the asset garden you talk about?
But first of I think there's a difference between simplicity and optimization. Optimization employs that you can get the right answer and there is no right answer, weston. So we don't optimize.
We cope. And so we cope. We can cope by having very simple portfolio. So we can be two funds. But if you're going to invest in two funds, I think we should have a reasonable expectation for what the returns of those two funds should be.
We should understand enough about those two funds to understand not what is the yield of the bond fund or what is a yield on the treasury and how does that works or what's the reasonable return for the stockland and and what drives that. And that's when to talk about asia camp and and it's a work in progress. But we're trying to help people at least have a base understanding of what drives the stock market because most people are ignorant of that.
They just don't really understand and they don't understand IT driven by cash flow and how that cash flow grows and what people and what investors are paying for that. So I think I don't think you can be so simple. I think you be the implementation will be two fans.
We can't just stop there. We have to understand what drives those returns to those plants, like what what's the math and emotion behind. And I think we fell short as a community because we don't do that often times because IT seems too hard, too complicated.
But there are some basic things we can learn and understand investigation. That was sort of the purpose of the book, trying to just teach some basic principles in animation. And money for the rest will always ask myself, how can this be easier? How can we make this easier for investors so that they understand that and feel competent and they are investing?
So we get a question every year, which is the big the big question, should we invest? So talk to us about that.
right? So if if one has a checklist, they go through the checklist, resign, goes to the checklist and is to decide or we're going to fly the plan or not today. That's all this is.
We have a process to decide. We can explain the investment. We understand what the upside return could be. We understand the worst case in areas we understand, the vehicle, the fees we understand.
And what is IT take to be successful is IT depend on me being super smart? Or are the underlying drivers and principles going to drive a turns? What's the impact of my portfolio? And then once we know that and we can decide whether to move forward or not, an so it's sort of the culture nation of the entire checking this process to decide, yeah, I want to do IT.
And often times we might say, well, i'm going to take a little bit position in IT to learn more about IT and to see how that goes. And we saw this, I would see this a lot of times in the best in festival space, where a head phone manager might take a small position to keep IT on the radar, understand what's going on and see how IT trade things like that. And that's also another approach, taking baby steps as we learn and then decide whether to invest on. In my .
friends in the space, the White could investor jim di talks about, there are no called strikes and investing. We can choose or not to choose to swing after we are investigating investment. Do you agree?
Oh yeah, now and that that germy grantham had a similar quote, p and in one of our advantages as individual investors versus professionals because professionals have to swing, they're getting paid to make individual decisions. And they have been spent time in the space. They they have clients that are asking, what are you doing? Why are you if there are eighty percent cash, their clients get upset.
And so they have to find something to invest in. As an individual investor, we can be patient so we don't have to swing if we don't want, we can spend time learning about a particular investment. Now eventually, we're going to have to invest in something unless we're independently wealthy, aiming to own cash.
But other than that, we're going to actually have to make choices, make decisions. And so we need a process to do that. IT can be simple, but IT can't be knife.
There is some basic understanding, um we can just say, I have my index funds. I'm fine, great. You have your index funds.
What is the historically return to those independent will travel returns? What's a reasonable expectation going for one? What's the worst case scenario, those independent and I prepare for that.
Maybe I shouldn't have as much as indexes. That is those type of basic questions that is just so simple that were not even don't really understand. We're all smart enough to understand the basics of investing without having to hire somebody to to do IT for us. But we we can't invest in ably.
So when we swing, one of the conundrums is do we do accost the average or lump some, especially we've have a windfall. How do you see this in M I?
I do dela cost energy because that's that's an example of not knowing what's going to happen, an example way finding it's an example of controlling our emotions that the academics will say put IT all in IT is a lumpy because over time the the market goes up the stock market. And that is that what the math is, the emotion says that if we put IT all in at once in IT falls thirty percent, we feel terrible.
Uh, and one of the things that did we we talk about about on our on our site and the community is to minimize our maximum regret. What decision can we make so that we don't feel awful? So let's say we put IT all in as a lumpsum.
The market sells off thirty percent, then we panic, then we pull IT all out. I'm going to wait for a Better time and then the market takes off and and goes up fifty percent and then we missed out and then we feel terrible. Wouldn't be so much easier to say, all right, I have this wind df all I want to get invested.
I'm going to take two years to do IT, and i'm going to put a little bit each month for the next two years. And and sometimes the markets up, sometimes is down. But I i've controlled my emotion because I have a plan and i'm not an experience. No, maybe if the market went up one hundred percent of first month, yeah, you will feel bad, but you'll feel way Better or less bad than you would if you put IT all in in the market fell eighty percent because losses feel way worse then games that we missed out on.
David, do you have a rule of them for your dollar cost average? Does IT depend on hat what the amount is.
alright? Yeah depends on like so I once I left my advice reform and they paid me over seven years, and so I got a big lump sum every december, and I might take a Better year and invest. So you know a year because at the time I was IT was A A big piece and in part of IT is was getting used once you have a lumpsum takes while to get used to making bigger trades.
I i've never put one hundred thousand dollars in the market on time. That feels scary to me. And so you kind of have to scale. And based on how much is IT relative to network, how bigger trade is, is going to be. So any other things we can do, the controller emotion and get controller the fear and temporary agreed, we might have.
One of the ways that you manage, whether or not you should invest in a leading edge of the current market is you have a red, Green and yellow approach. And what do you use to assess the market that maybe our investors could use to we .
we look at valuations of asset classes. So we want to understand with the market cheaper, not relative to its average. So we can mean there are you can search for the but like a frees, complicated source.
But a free source is research. They have an active allocation tool that they come up with expected returns or different stocks and you can see are for different asset types and see is IT more expensive. But IT, IT kind of is is A A base case in our case.
We're looking at we are we tried to simplify. We read him read. So we look at lots of different anodes pes. We look at the economic trends in terms of and without getting to bunches of details, and we look at just basically what is the risk of the market selling on, what is the level of fear and greed. Honestly, I don't think must be able to spend time to IT.
So we do IT because we gear to our investors that they want to understand how markets work and they they're trying to control of our emotions. So we're not doing IT to be predict of of the market. We're trying to understand the markets temperature.
And for some people, knowing where we are from an economic standpoint, from an ash standpoint, from a level fearing great standpoint, helps them make Better decisions to control their emotions. And so that that's our project. Sounds like for your community, it's much simply than that, which is perfectly fine. And so you want to spend time figure out whether you know what's right, Greening yell just but understand what drives your index one and what's a reasonable return over the long time period. And then am I saving enough and and things like that, they would.
We ve talked about ten questions that we can use to value whether or not purchase an investment. So what questions do we need to ask when IT comes time to possibly sell an investment?
There is no reasons to self we sell if our thesis or expectation didn't work out and we're wrong. Now if you're buying an index, mutual fun kind of hard to be wrong there. So that's why we often don't sell those because they're compounding cash for over time.
But we had bought a house before and when we got there, they didn't adequately disclose the old issue. I don't think they were aware of IT or whatever. They show some integrity and they bought a back, but we sold IT back to them because we were wrong and they were wrong.
So that would be another reason to sell. Sometimes we sell on investment because we need the money. If you're really retired at some point, you need maybe to sell some stock index funds so you can live on.
So that would be another reason to sell. So equity, we need the money or wrong, and we'll sell if there's a Better opportunity. Maybe we sell some stocks because we want to put a down payment on our retirement condo or something like that. And so there's a need, there's a use for the money.
That, that, that provide is an investment that the Better opportunity maybe has a higher expected return or its our lifestyle Better or we want to reduce risk because we're heading into retirement and were ninety percent stocks and that feels terrifying or we want to sell. This sucks because we want to buy an annuity so we can guarantee that arangement income source. So those are reasons to sell.
This has been an awesome episode. You've given us so many valuable nuggets for our audience, but we have to remember that our audience, or late starters, you have any specific tips that would generate from your book, four late starters in particular.
The book is on investing. So I think we've covered investing principles that will help late starters. My approach is to recognized it's not all or nothing.
So your late starter, we talk a lot about on the show, invest like the already retired, try to structure a life that you can maintain for a decades. But how would you live in retirement? Retirement is freedom.
So how can I have that freedom? Now maybe i'm still working part time. We're generating cash flow in some ways.
So IT isn't sometimes IT seems like the fire movement, you the fire or you didn't. Well, now it's not actually have simple. It's i've restructured my life to focus on freedom.
But like in my case, i'm not going to retire or people because when you are already tired because you quit job, yeah, well, yeah, I quit my professional job, but then I launched something else. And so you sort of adapt over time, but maybe someday I retire. But there is a huge amount of freedom that comes by being able to generate cash flow in some way apart from your investment.
Once it's completely investments, IT can often lead to a scarcity mindset because you're very focused in my dividends. Come in and set are now for some people that could be great because whatever life style is they created and they don't want anything to do with any type of income generation. But for most people, if I find that they do, because they want to be involved some way.
And so that often involves receiving some type of income doing IT, even if it's part time. So I don't as long as now, I quit my job eleven years ago. And so now in my late fifties, and I work with my two sons on our family business and my daughter.
And why would I quit that? Because i'm haven't fun. And so the idea to try to structure something that you can do for decades ahead and IT can take some experiment to figure out what that was. Why don't really like the sort of that demarcation I have? I mean, i'm financially dependent or retired because it's it's way more more than that.
S so David, where can people reach you?
We are two main websites. We have money for the rest of our stock com, which is our podcast and a membership community. We also have asset camped outcome, which is our service to more simplified service to help people understand stock index funds and the drivers of that and reasonable returns.
I'll tell us a little bit about that. Is that like a group zoom color? How how does that look .
now at this point is to sign up with twenty box a month. And there's three components. There's guides, part of education guides, understand how the stock market works. So there's a component that you can look at the historical of returns and what drove them into those three factors we discuss. There's an element to figure what the expected return is or there's different aspects of the stock market and then there's a bunch of charge and graft people that wanted what's the divided yield of global stocks over time in our dividends higher a little than average. So this type things.
right? So it's online, online resources.
Yeah, it's a online resource. Now maybe IT involved to zoom call. We started IT because we couldn't find the data.
We we wanted to be able to show a chart that shows the valuation of global stocks. This let to stop on U. S. Stock market if you want to move outside of the U. S.
So the global stock market, there just wasn't the data available, and we got tired of not being able to find the data we want. And so we we tried for years, so we ended up building our own platform and then we use those charts and are no money for the rest plus our membership community. So use that in our reports. But for people that just want to launch a data when sirico, we we provide that is an option and anymore iterating and figure out what to do that over time.
Well, David, this has been aten today. We want to thank you from the bottom hearts for coming on and help in our late starter investors catch up to five. We wish well. And I want to say have a great day.
great. Thank you. Everything we discuss in this episode and for general education, we have not considered your specific risk situation. We've not provided investment advice is simply general education of money investing in the economy. Have a great week.