109: Why Modern Portfolio Theory Fails Investors with Daniel Peris

Invest Like a Boss

Sam Marks Johnny FD Derek Spartz

Investing, Business

4.8 • 518 Ratings

🗓️ 11 November 2018

⏱️ 73 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

DANIEL PERIS, Ph.D., CFA, is Senior Vice President and Senior Portfolio Manager at Federated Investors, Inc., in Pittsburgh where he oversees $20 billion dollars in equity portfolios the firm's dividend-oriented funds.

Before transitioning into asset management, Peris was a historian focuses on modern Russian history. He is the author of two prior books in investing, The Strategic Dividend Investor, and The Dividend Imperative, and the new book Back to Business.

During this episode, Daniel will talk about how you can bring some common sense back to your investing. He’ll speak on some old strategies that just don’t work anymore including why Modern Portfolio theory may not be the answer. Expect to learn how to achieve higher yields including tips to managing your Index funds, Mutual funds, and SMAs. Find out if you really need a financial advisor to get the most out of your investing and how to choose one properly.

Listen to the end for insight into Sam Marks and Johnny FDs percent earnings and thought on incorporating this concept into their portfolio.

Where are we:

Johnny FD & Sam Marks: Chiang Mai, Thailand
Daniel Peris - Pittsburg, Pennslyvania

Links:

Book:

Getting Back to Business: Why Modern Portfolio Theory Fails Investors and How You Can Bring Common Sense to Your Portfolio

Time Stamps:
06:06 - Managing $20 billion in equity portfolios
07:45 - Being interested in modern portfolio theory
11:01 - Modern Portfolio Theory vs Efficient Market Theory
16:41 - “You don’t have to believe in mean-variance optimization, Modern Portfolio Theory, to want to be a passive investor” - Daniel Peris
19:45 - Is the Modern Portfolio Theory failing investors?
20:33 - “This idea of mean-variance optimization simply doesn’t make sense in modern investing anymore” - Daniel Peris
25:26 - Achieving higher yield
33:08 - Managing your Index funds, Mutual funds, and SMAs
36:55 - Dividend investing and tax bracket benefits
38:44 - Do you need a financial advisor to get high yields?
48:55 - “At the end of the day what really matters… is trust” - Daniel Peris
53:29 - Mutual funds to highlight
56:50 - The superior open approach 50 years from now
01:00:52 - Cashing out your dividends & calculating earnings

Keywords:

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Transcript

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0:00.9	Welcome to the Invest like a Boss podcast.
0:03.0	I'm Sam Martz.
0:04.0	And I'm Johnny FD.
0:04.9	We're self-made entrepreneurs who invest our own money and use modern technology to invest like a boss.
0:09.4	Join us each week for exclusive interviews with our network of modern investors, business owners, and multimillionaires to discover new ways to invest our hard-earned cash.
0:18.9	Hey guys, this is Johnny and welcome to episode 109 of the Invest Like a Boss podcast.
0:23.6	Really happy to be sitting across from Sam Marks here in Chang Mai.
0:29.0	It's good to be back sitting next to you, Johnny, and it's a beautiful place you got here.
0:32.9	Great location. Nice find.
0:34.8	Thank you very much. And it's only $450 a month, which is giving me more
0:39.2	money to invest. Yeah. And I would imagine that you're paying for that with some of your
0:43.6	passive income, maybe dividends, which we're going to be covering in this episode. Oh, I wish I had
0:48.8	more dividends. I think I love getting that quarterly check from Vanguard and from everywhere else that I invest in.
0:57.1	Actually, this month, during our kind of Q3 update, we talked about how much money we lost.
1:02.1	This month, I've lost $20,000 in net worth.
1:04.5	Yeah.
1:04.9	But I got a $1,000 dividend check for the quarter.
1:09.3	So in my mind, I'm a thousand dollars richer.
1:12.7	And that post that you made in Boss Lounge about that got me thinking about this and why I wanted
1:16.9	to push up this episode of Daniel Paris that we're talking about dividend investing because I started
1:21.7	looking at my portfolio as well looking at yours as comparison. And I started looking at the gains
1:27.0	and losses. And I was like, wow, it does actually feel really I started looking at the gains and losses.
	...

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