Episode Details

Can keeping up with financial news actually make you a better investor—or just make you more confident about making bad decisions? Don and Tom dig into research on how markets react to news, why investors tend to overreact to splashy stories and underreact to boring numbers, and whether sophisticated traders can actually exploit those inefficiencies. Then, a caller nearing retirement asks how to build a conservative brokerage account to bridge the years before Social Security. Plus, the guys compare Avantis global ETFs with Vanguard’s Total World Stock ETF, debate the value of factor tilts, and marvel at how quickly investors can pile billions into the latest hot investment idea.

• 00:05 Can financial news make you a better investor?
• 00:52 The illusion of being ahead of the market
• 01:44 Can investors profit from company news?
• 02:42 Are markets really efficient?
• 03:33 What 6.7 million Reuters articles reveal about news
• 04:40 How much financial news is actually predictable?
• 05:06 Why investing based on headlines is a fool’s errand
• 06:18 Bad news, numbers, and investor underreaction
• 07:06 Why investors overreact to ambiguous, high-attention news
• 08:10 Investment strategies that ordinary investors can’t realistically use
• 09:02 Be skeptical of your reaction to splashy news
• 09:36 Big news isn’t always new information
• 10:31 The factor zoo and the cost of complicated investing
• 11:04 Can expensive strategies overcome their fees?
• 12:28 Why diversified investors can mostly ignore the news
• 13:32 Soccer, summer football, and Orlando’s forgotten team
• 14:10 Listener call: Building a retirement bridge account
• 15:00 Retirement plans, Social Security, and a future inheritance
• 16:28 How soon will the retirement money be needed?
• 17:10 Matching asset allocation to short-term spending needs
• 18:04 Using bonds and cash for retirement stability
• 19:28 Is it okay to hold bonds in a taxable brokerage account?
• 20:43 A listener puts Don and Tom on his financial Mount Rushmore
• 22:02 Halloween in Celebration and 1,000 pieces of candy
• 22:46 Why did Avantis launch AVTM?
• 23:58 AVTM versus Vanguard Total World Stock ETF
• 24:06 Why Don and Tom prefer AVGE for a one-fund portfolio
• 25:29 The astonishing rise of a semiconductor ETF
• 26:45 Can VT plus AVGV replicate AVGE?
• 27:06 Why a 20% value tilt may not be enough
• 28:33 Factor investing, expenses, and expected returns
• 29:30 Tom returns from Greece and is ready for calls

Questions? Comments? Click!