September 10, 2020 Behavioural Finance Personal Wealth The Rational Reminder Podcast Episode 115: Actively Managed Funds vs. COVID-19, Behavioral Nudges, and a Sustainable Investing Update Our focus for this episode of the Rational Reminder is split into two sections; first, we cycle through our regular features, looking at a number of studies and articles of interest, the market during the pandemic, and our bad advice segment, and then Benjamin is joined by Tim Nash to talk about ethical investing and comment on Wealthsimple’s new sustainable portfolio. We start off our weekly round-up talking about the idea of broadening a knowledge-base and how reading widely and diversely on all manner of subjects can influence and benefit your investing. From there, we turn to the topic of quantitive easing before exploring Tim Wu’s thesis about information empires and how they cyclically influence economics. We then dive into the Ontario Securities Commission Investor Experience Study and Lubos Pastor’s paper, ‘Mutual Fund Performance and Flows During the COVID-19 Crisis’. Both of these shed light on investor behaviour and market performance during 2020 and also offer some interesting findings on the strength of some active management. Daniel Crosby has laid out what he calls ’22 Behavioral Nudges to Optimize Client Outcomes’, which we then run through, touching on each of his ideas and commenting where necessary. Our bad advice of the week comes from TikTok, and we listen in on two, worryingly misleading clips from TikTok personalities — the social platform may not be the best place to find sound financial advice! For the last part of the show we hear from Tim Nash; he shares his thoughts on Ken French’s appearance on the show recently and what the pandemic has proven about sustainable funds going forward. So for all of this and a whole more, in a jam-packed episode, be sure to listen in with us! Watch this conversation on the Rational Reminder YouTube channel Subscribe to the Rational Reminder podcast Key Points From This Episode: The importance of a wide range of reading material and looking at Peter Thiel’s Zero to One. [0:03:35.2] Quantitative easing and the important work that Frances Coppola has done on the subject. [0:09:22.8] Tim’s Wu’s economic theory around the cycle of information empires. [00:11:49] Takeaways from the Ontario Securities Commission Investor Experience Study. [00:13:53] Narratives about actively managed funds during the COVID-19 crisis. [0:20:04.1] The performance and flows of mutual funds; looking at Lubos Pastor’s paper. [0:28:35.7] Sustainable funds during the crisis — the past research that this now underlines. [0:38:03.3] Looking at the 22 behavioural nudges identified by Daniel Crosby for optimizing client outcomes. [0:43:23.7] Bad advice of the week: A couple of concerning clips of financial of content on TikTok. [0:58:46.2] An introduction to Wealthsimple’s new sustainable model portfolio. [1:03:45.5] Tim weighs in on what this progressive portfolio really means. [1:08:32.7] A response to the conversation we had with Ken French about ESG. [1:11:44.1] The increasing prioritization of sustainable companies during the pandemic. [1:16:47.8] Books From Today’s Episode: Zero to One: Notes on Startups or How to Build a Future — https://amzn.to/3ifHaBY Atomic Habits — https://amzn.to/2Ra5NnF The Case For People’s Quantitative Easing — https://amzn.to/35lADSI The Master Switch: The Rise and Fall of Information Empires — https://amzn.to/3h8CRXO Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Tik Tok Video on twitter – https://twitter.com/richtechexec/status/1298052743131729920 Prusa i3 MK3S — https://shop.prusa3d.com/en/3d-printers/180-original-prusa-i3-mk3s-kit.html Ontario Securities Commission Investor Experience Study — https://www.osc.gov.on.ca/documents/en/Investors/inv_research_20200819_osc-investor-experience-survey-final-report.pdf ‘Sustainable Investing in Equilibrium’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3498354 Mutual Fund Performance and Flows During the COVID-19 Crisis — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3648302 ’22 Behavioral Nudges to Optimize Client Outcomes’ — https://www.financialplanningassociation.org/article/journal/AUG20-22-behavioral-nudges-optimize-client-outcomes Share: Facebook Twitter LinkedIn Email CIRO Advisor Report
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