Using the Science of Investing to Create More Efficient Portfolios
Larry Swedroe Overview:
Most individual investor's portfolios are dominated by two asset classes: public domestic equities and bonds, the "risky" and "safe" asset classes, respectively. This traditional portfolio is colloquially referred to as "60/40," reflecting an allocation of 60 percent equities and 40 percent bonds. What most investors don’t realize is that because equities are far riskier than bonds, about 90% of the risk of the traditional portfolio is in equities. And while stocks and safe bonds have on average been uncorrelated, 2022 provided a reminder that both can crash at the same time (stocks and bonds were both down double digits), increasing the risk that investors will be unable to achieve their financial goals.
This presentation was developed for those looking to expand their knowledge of investment strategies, and learn how to build more efficient portfolios, ones with greater risk-adjusted returns that will also significantly reduce tail risk-the risk of "black swans"-through "hyper" diversification across unique risks using systematic strategies that are replicable and transparent. Active management, individual security selection and market timing plays no role.
In this world, evidence and peer-reviewed academic research, not instinct, opinion, or ego, are used to design portfolios. Whether you are an advisor looking to better serve your clients, an investor looking to become more knowledgeable about the workings of your portfolio, or even a financial oracle, you will benefit from this presentation. While it is short in length, its content is heavy. It is data-rich and full of detailed examples. The empty rhetoric or the distracting noise often heard in the active investment world has no place here. Science and hard data make the case. There is no need for elaborate prose or the hyperbolic statements so frequently heard on the other side of the investing aisle.
The information presentation provides the roadmap to the Holy Grail of investing-an investment strategy that can deliver higher returns without increased risk, or the same return with reduced risk. Consider your search ended.
Finally, if you tend to be daunted by data or unfamiliar terms, don’t worry. I have made great efforts to explain concepts in as simple terms as possible. Know that by attending the webinar you are taking steps toward becoming a better, more informed, hands-on investor.
Areas Covered in the Session:
- You will learn that traditional 60/40 portfolios have almost all their risk in equities because equities are much riskier than bonds
- You will learn how adding unique sources of risk and return can create more efficient portfolios, reducing tail risks
- You will learn how adding alternative investments such as long-short factor strategies, reinsurance, and alternative lending provide diversification benefits that lead to more efficient portfolios
- You will learn how adding unique sources of risk significantly improve your odds of achieving your financial goals and allow you to increase the safe withdrawal rate in retirement
Who Will Benefit:
- Individual Investors
- Institutional Investors
- Researchers
- Investment Advisors
Speaker Profile
Larry Swedroe Since joining the firm in 1996, Larry Swedroe has spent his time, talent and energy educating investors on the benefits of evidence-based investing with enthusiasm few can match.
Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” The second edition was published in 2005. He has since authored eight more books: “What Wall Street Doesn’t Want You to Know” (2001), “Rational Investing in Irrational Times” (2002), “The Successful Investor Today” (2003), “Wise Investing Made Simple” (2007), “Wise Investing Made Simpler” (2010), “The Quest for Alpha” (2011), “Think, Act, and Invest Like Warren Buffett” (2012) and Enrich Yourself (2024).
He has also co-authored nine books about investing: “The Only Guide to a Winning Bond Strategy You’ll Ever Need” with Joe Hempen (2006); “The Only Guide to Alternative Investments You’ll Ever Need” with Jared Kizer (2008); “The Only Guide You’ll Ever Need for the Right Financial Plan” with Kevin Grogan and Tiya Lim (2010); “Investment Mistakes Even Smart People Make with RC Balaban (2012); “Reducing the Risk of Black Swans with Kevin Grogan (2014, second edition 2018); “The Incredible Shrinking Alpha” with Andrew Berkin (2015, second edition 2020); “Your Complete Guide to Factor-Based Investing” with Andrew Berkin (2016); “Your Complete Guide to a Successful and Secure Retirement” with Kevin Grogan (2019, second edition 2021); and “Your Essential Guide to Sustainable Investing” with Sam Adams (April 2022)..
Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television shows airing on NBC, CNBC, CNN and Bloomberg Personal Finance. Larry is a prolific writer, contributing regularly to multiple outlets, including Morningstar, Wealth Management, The Evidence Based Investor, Financial Advisor, Alpha Architect, and Seeking Alpha.