Episode Details

Robert Pozen, senior lecturer at the MIT Sloan School of Management, says that investors with significant savings should eschew classic 60-40 diversification strategies for a mix that is almost entirely stocks, with no bonds at all. That strategy might sound odd, considering the source — Pozen is the former president of Fidelity Investments — but Pozen contends that long-term investors will be better off bucking up for the market's ride than they will be trying to protect themselves from downturns where the pain will be relatively short-lived. Pozen, who detailed his research in a recent Wall Street Journal column titled  "You're Probably Overinvested in Bonds," recognizes that his strategy will shake up portfolios, but says it also gives investors permission to let their winnings run, provided they don't have to tap the investments in order to meet living expenses.

In the ETF of the Week, Todd Rosenbluth, head of research at VettaFi, is highlighting an ETF focused on blue-chip stocks, which requires defining what blue-chips really are and how it's not just the Magnificent Seven or the current mega-cap market leaders. He also notes how active management with brand-name companies can deliver returns that are different from index results, even if there is significant overlap on the names in a portfolio. 

Plus, Ken Applegate, portfolio manager for the Wasatch International Growth and Global Opportunities funds, talks international small-cap investing in the Money Life Market Call.