Episode 33: Low Cost Index Investing with Rick Ferri: What You Need To Be a Successful Index Investor

Today on the show we are joined by Rick Ferri. Anyone who follows or is interested in index investing will probably have read something of Rick’s. He’s written seven books, working on the eighth, and he’s written a ton online as well. Rick opened Portfolio Solutions, the first low fee index fund based wealth management shop and built it up to over a billion dollar company. Rick created the model of low cost fiduciary advice, using index funds and putting the client first, so today we’re chatting to him all about it. Inside this episode Rick shares why he is so passionate about low cost index investing, the four levels of an index investor, and the requirements for being a good index investor in the long term. We also talk about his relationship with John Bogle, who recently passed away. It was a pretty meaningful conversation! For this and more, be sure to join us on today’s episode!

Key Points From This Episode:

  • Rick’s passion for low cost index investing. [0:02:24.0]

  • The four levels of an index investor. [0:05:0]

  • Dimensional funds: active management that uses factor based investing principles.[0:10:29.0]

  • None market risk factors fitting into a portfolio. [0:11:54.0]

  • Rick’s thoughts on the price and the value around behavioral coaching. [0:13:44.0]

  • The future of robo-advisers. [0:18:14.0]

  • Three things required for a person to be a good index investor in the long term. [0:18:54.0]

  • Not indexing yet? - You need repetition, repetition, repetition. [0:20:28.5]

  • Having more assets than they’ll ever need in term of their equity exposure. [0:22:40.0]

  • John Bogle as a person and how he changed the financial services industry. [0:24:33.5]

  • How Rick defines success. [0:29:05.0]

  • And much more!

Bonus Episode: Building a Future for the City: An Interview with Mayor of Ottawa, Jim Watson

We have a special, short bonus episode for you today! We are very glad to welcome the mayor of Ottawa, Jim Watson, to the podcast and although we are not strictly talking about investing and our usual topics, we do think it is a great and insightful conversation that you will enjoy, no matter where you are from. Mayor Watson tells us about his vision for the city, how he characterizes it, and the importance of the tech scene to its growth and success. We also talk about talent attraction and retention, social media in politics, budgeting, and his greater mission while in office. Be sure to tune and hear it all, here on the Rational Reminder Podcast!

Key Points From This Episode:

  • The mayor’s description of Ottawa. [0:02:24.7]

  • Ottawa’s tech scene and the impact of companies like Shopify. [0:03:16.2]

  • Attracting and retaining talent in the city. [0:05:48.8]

  • Implementing a vision through daily work. [0:07:38.4]

  • The role of social media in the job of the mayor. [0:08:53.7]

  • Mayor Watson’s greater mission in politics. [0:11:06.6]

  • Budgeting and balancing expectations around this. [0:12:55.1]

  • And much more!

Episode 32: Active or Passive Management: The Behavioural Explanations of Factors

Welcome back to another episode of the Rational Reminder Podcast. Our goal this year is to find our podcasting rhythm, creating a schedule that alternates between guests and these conversational episodes where it’s just us.

On today’s episode we want to pull the focus of the podcast back to answering a handful of client questions that have come up in the past little while.

So on today’s episode we are jumping right in to answer those listener questions, getting back on the factor train, and trying to get to the root of the desire for face-to-face investment advice. We also talk about a few articles as well, including some of the biggest headlines in investment news, and why it it critical to not only save for but also make plans to fulfill the vision of your retirement. So for another insightful episode answering all of your questions, stay tuned!

Key Points From This Episode:
• Discussing recent stand-out investment articles. [0:03:12.0]
• Unpacking the debate between active and passive investment management. [0:07:11.0]
• Why using factors is not another flavor of active management. [0:10:43.0]
• Understanding market caps surrounding factors. [0:14:41.0]
• Evaluating the worth of a stock that has not dividends or profit sharing. [0:16:46.0]
• Planning for retirement, or not retiring at all: the retirement trends of today. [0:19:53.0]
• Wealthsimple’s premium advice option: the value of dealing face-to-face [0:23:44.0]
• The lost Bitcoin wallets crisis; understanding centralized versus decentralized [0:30:44.0]
• And much more!

Episode 31: Single Decision ETFs: Unpacking XGRO and XBAL from BlackRock

Today on the show we are joined by Steven Leong who is the Head of Canada iShares Product at BlackRock. Steven is here to talk about single decision ETFs, the new XGROs and XBALs from BlackRock and whole lot more. We start off the episode with a bit of an introduction on BlackRock and iShares before Steven informs us on the new relationship between BlackRock and RBC Global Asset Management. From there we get into the meat of the episode looking at the portfolios in question and Canada’s current positioning in the global trends. We talk about some of the great advantages that these funds offer investors and Steven shares his ideas on the current role of the financial advisor with regards to the rise of passive investing. We are lucky enough to have Steven offer his perspective on a slew of related topics before ending off with two great pieces of advice for our listeners. For this and more, be sure to join us!

Key Points From This Episode:

  • A quick overview of BlackRock’s scope and size [0:02:44.0]

  • BlackRock’s relationship with RBC Global Asset Management. [0:04:35.8]

  • A little about the XGRO, the XBAL portfolios. [0:06:32.3]

  • Overweighting in Canada in common model portfolios.. [0:08:52.1]

  • The advantage of automatic rebalancing for the investor. [0:11:06.3]

  • The evolving role of the trusted financial advisor. [0:12:27.4]

  • Sharp downturns in fund fees and the results of this trend. [0:15:01.8]

  • Canada’s relatively slow uptake in index funds and iShares’ factor products. [0:19:46.9]

  • The future of active versus passive investing. [0:25:21.2]

  • Two pieces of investment advice from Steven! [0:27:14.7]

  • And much more!

Episode 30: The Authority Speaks: A Complete Guide to Investing and Retirement with Larry Swedroe

Today we are joined by a friend, hero, and a legend in the field fact based investing. Larry Swedroe is here to discuss his latest book, some of the timeless concepts he has been espousing for many years, and to give out a few golden nuggets of advice for your finances and retirement. Larry is so generous with his time and wisdom and we chat about a ton of chapters from his book, Your Complete Guide to a Successful and Secure Retirement, and he picks out a few ideas to focus on here in this quick discussion. Larry shares the biggest mistake he has noticed in retirement planning, lifestyle considerations moving into the final stages of life, estate transfer, underperforming stocks, and more! We draw on Larry’s wealth of experience to get some perspective on more current trends in the industry such as the fixation on costs of advisors and we finish off hearing from Larry about how he defines success as he nears the end of his professional career. For all this and more, be sure to join us for an extra special episode!

Key Points From This Episode:

  • The four horsemen of the retirement apocalypse. [0:03:03.4]

  • Larry’s pick for the biggest mistake made in retirement planning. [0:06:32.9]

  • Non-financial considerations for those heading into retirement. [0:09:22.7]

  • Day to day preparations for finding meaning in the retirement years. [0:13:04.5]

  • Why it is important to expose yourself to independent risk factors. [0:15:34.6]

  • Understanding the reasons for never actually avoiding factors. [0:26:53.9]

  • How to avoid losing assets during the transfer of an estate. [0:29:16.4]

  • Taking underperformance into account when considering your investments. [0:32:58.3]

  • Looking at the financial industry’s shift in focus towards costs. [0:37:06.1]

  • Larry’s own definition of success moving into the end of his career and retirement. [0:41:55.1]

  • And much more!

Episode 29: Clearing Up the Holiday Back-Up: Podcast Housekeeping and Round Up

Welcome back to The Rational Reminder Podcast! Today we are riding solo with no guests and just going over some recent developments, in-house news, and gearing up for some more great shows in the pipeline. We have had so many amazing guests recently, talking on a number of specific topics, so we thought we would take this opportunity to clean the mailbox, as it were, and set the table for the next few weeks. During the episode we cover the new partnership between RBC and iShares and what this means going forward and we also look at the state of ETFs and how much they have grown in the last few years. We talk about the impetus to go to cash that many investors and advisors seem to be considering and also discuss global diversification and how this is the truest representation of a belief in capitalism. We talk data, advertising, tax and the supposed market monopolies that the biggest companies in the world have right now. For all this and more, be sure to join us!

Key Points From This Episode:

  • We are hiring! [0:01:40.0]

  • The new alliance between RBC and iShares. [0:02:23.3]

  • The growth for ETF in comparison with mutual funds. [0:05:31.9]

  • Does it make sense for long term investors to go to cash? [0:06:14.7]

  • Globally diversified investments in international markets. [0:08:30.2]

  • Are we living in a winner takes all market right now? [0:14:36.4]

  • How data has overtaken oil as the most valuable resource. [0:20:54.2]

  • CPPIB’s controversial advertising strategies. [0:23:50.6]

  • A few quick tax updates. [0:26:30.6]

  • And much more!

Episode 27: Evidence Based Investing: Changing the Minds of Advisors and Investors with Robin Powell

In this episode of the Rational Reminder Podcast we welcome Robin Powell. Robin is a journalist and content creator who has dedicated the more recent part of his career to helping spread the word on research backed investing and turning the tide on the history of investment advice. For Robin, this all came about from an assignment he was working on and the feeling of shock he experienced when he discovered the wealth of information that is available to investors but how it is shielded by the majority of investment advisors. Robin explains these experiences and why we still see this in today’s marketplace. He chats to us about the films he has produced on the subject and the great characters and thought leaders with whom he has met. Robin is kind enough to open up about his thoughts on the future of investing, regulation and his hopes for the spread of this information. For all this and more, be sure to join us!

Key Points From This Episode: 

  • Some of Robin’s background and previous work experience. [0:01:40.6]

  • Why Robin started spreading the evidence based investment message . [0:02:38.9]

  • The experience of speaking with industry leaders to make a documentary film. [0:04:07.7]

  • The impact of this and the subsequent films Robin has produced. [0:05:44.0]

  • Robin’s perspective on the Canadian financial industry. [0:06:57.8]

  • The impact of the change of rules for financial advisors in the UK. [0:09:21.6]

  • The effect of RDR and claims about reduced access to advice. [0:12:24.2]

  • Difficulties in sharing information and changing people’s minds. [0:15:06.0]

  • The role of the press in this dynamic and whether it can change [0:16:52.2]

  • Robin’s favorite interviews and encounters over the years. [0:18:07.4]

  • Looking to the future of the financial industry. [0:19:53.5]

  • Considering the role of the human financial advisor with the rise of robo-advisors. [0:21:40.1]

  • Robin’s own measure of success in his work [0:22:59.9]

  • Regulation in the pursuit of changing the approach of advisors. [0:24:28.9]

  • And much more!

Episode 25: The Year End Round Up: Recapping Recent Market Performance

This week on the podcast we are starting to wrap things up for the year, doing some house keeping and looking back at recent trends in the market. First of all we talk a bit about the podcast going forward and have a few comments on ratings and reviews. We also look at some of the upcoming content you can expect early next year! We chat about the client survey we recently held and what the data from this tells us. From there we move into more general information on the relationship between risk and profitability and try and explain why they are so closely linked. We also get into the market’s performance this year and the apparently bad year it has had. This exploration is located in the broader context of historical data and evidence based investing strategies and we try our best to show how a bad year like 2018 is not a reason to be reactive in you investments. For this and more, join us today!

Key Points From This Episode:


  • The first critical review of the podcast. [0:01:52.3]

  • Some of the upcoming content for the new year. [0:02:52.0]

  • The recent client survey which we completed. [0:04:56.3]

  • Interesting data that we collected during this survey. [0:07:02]

  • The blog post from Michael James about our chat with Glenn Cooke recently. [0:08:57.8]

  • How is being profitable riskier? [0:12:39.9]

  • Behavioral explanations for factors and market timing. [0:15:10.7]

  • The market this year and how it has dipped. [0:16:13.3]

  • Comparing this year’s downturn with 2008. [0:17:38.6]

  • This generation’s investors and risk seeking. [0:21:04.7]

  • Understanding standard deviation in this context. [0:22:58.3]

  • The potential impact of social media on markets compared to 2008. [0:26:02.4]

  • The human bias towards action when in danger. [0:27:12.8]

  • Don’t leave your seat to get a hot dog! [0:29:04.2]

  • And much more!

Episode 24: Evidence: What To Follow And What Not To Follow

Welcome back to The Rational Reminder Podcast. Today, Benjamin is getting the factor fill off his chest. We are diving into a range of topics and we are talking about other factors or how far you can push the evidence. This is the first time in a while that we’ve really dug into factors. We cover other interesting topics like increasing CPP benefits, we talk about our regulatory bodies and the debate going on there, as well as the big news around Vanguard. It’s a fun debate and a  good conversation. So, keep listening to hear more!

Key Points From This Episode:

  • How CPP is expanding in 2019. [0:01:48.0]

  • Advocis putting the business interest of financial advisers before clients. [0:05:0]

  • The rumor circulating about Vanguard. [0:10:22.0]

  • A none story - How asset owners are falling out of love with index funds. [0:13:00]

  • Why the rich aren’t happy, why more money does not make people happier. [0:15:44.0]

  • Factors of a way to beat the market and why factors work. [0:17:38.0]

  • Factor regression on portfolios. [0:22:46.0]

  • Long versus short stock picking. [0:27:43.0]

  • And much more!

Episode 23: The Basic Rules of Purchasing Insurance: What, Why, When and How Much!

Welcome back to The Rational Reminder Podcast. Today we are joined by Glenn Cooke. Glenn is a fixture on the personal finance Canada sub-Reddit and spent many years as the President of Lifeinsurancecanada.com, which is an online platform for insurance information. Today, Glenn is the President of Insurance Squared where he works with market research departments at life insurance companies and shows life insurance agents how to generate leads online and sell non-face to face. Glenn has a very matter of fact, rational approach to insurance and that’s what we talk to him about in today’s episode. He shares with us about the mistakes he commonly sees in insurance, especially the fact that most people way under buy the amount of life insurance that they truly need. Glenn also describes permanent insurance, what it is, when it makes sense and what situations it is best suited for. We hear about when it’s important to use investments versus not and as long as consumers stick to those basic rules, it’s hard to go astray. So for an incredible interview, keep listening to hear more!

Key Points From This Episode:

  • Over the phone and online - why that approach worked so well for Glen. [0:02:24.0]

  • Understanding field underwriting. [0:03:17.0]

  • Why some people are hesitant buying insurance online and prefer in person. [0:06:27.0]

  • Most common questions people are asking when buying insurance. [0:07:27.0]

  • Mistakes people are making when buying life insurance. [0:07:56.0]

  • Justifying how much you need. [0:09:31.0]

  • How disability insurance ties in very closely to life insurance. [0:10:34.0]

  • Settling for group disability insurance through your employer. [0:13:23.0]

  • What is permanent life insurance and where would it make sense. [0:15:25.0]

  • Two general categories of permanent insurance. [0:19:30.0]

  • Glen’s views on critical illness insurance. [0:21:21.0]

  • Three ways you can use life insurance. [0:25:46.0]

  • Ways you can get money out of your insurance policy. [0:28:08.0]

  • Glen’s observation about financial literary in Canada. [0:32:05.0]

  • And much more!


“The amount of insurance that people buy is almost never enough.” — Glenn Cooke  [0:08:02.1]

“Head towards the guaranteed version. If you are just looking for the cheapest way to get life insurance when you die, you want level premiums, everything fully guaranteed.” — Glenn Cook  [0:20:27.1]

Links From Today’s Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on Twitter — https://twitter.com/benjaminwfelix

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

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

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

Reddit — https://www.reddit.com/r/PersonalFinanceCanada/

Glenn Cooke — https://www.linkedin.com/in/glenn-cooke-5320485/

LifeInsuranceCanada — https://www.lifeinsurancecanada.com/

Insurance Squared — http://www.insurancesquared.com/

Manulife — https://www.manulife.ca/personal.html