527: Challenging the Conventional Wisdom of Stocks vs. Bonds and Common Retirement Planning Strategies with Edward McQuarrie
Retire With Purpose - The Retirement Podcast
Casey Weade
4.7 • 556 Ratings
🗓️ 13 October 2025
⏱️ 60 minutes
🧾️ Download transcript
Summary
Today, I'm speaking with Edward McQuarrie. Ed is the Professor Emeritus at Santa Clara University, where he taught in the marketing department for more than three decades before retiring in 2016. After stepping away from teaching, Ed pursued a new passion in researching financial market history and retirement income planning.
His work has been featured in the Wall Street Journal, MarketWatch, and Barron's, and he frequently contributes to our Weekend Reading for Retirees series. He was introduced to us by past guest William Bernstein, who insisted Ed would be a must-hear voice on the show.
In this conversation, Ed challenges decades of conventional wisdom around investing. He explains why "stocks for the long run" isn't always the safest bet, how cherry-picked data can mislead investors, and why separating risk-free assets from growth assets may be more important than diversification alone. Ed also shares the insights from his extensive historical research, covering stock and bond returns going back to the 1700s, and how it relates to retirement planning today.
We also dig into the evolving conversation around Roth conversions, the limitations of relying solely on stocks and bonds, and why tools like TIPS ladders or annuities can help secure baseline retirement income. Ed's clear-eyed, historically grounded perspective will challenge the assumptions you've been taught and help you build a more resilient, reality-based plan for the future.
In this podcast interview, you'll learn:
- Why "stocks always outperform bonds" is a myth—and what 200 years of history actually reveal.
- The risks of relying on cherry-picked data in financial planning.
- How economic "regimes" shape investment returns across decades and centuries.
- Why risk separation, not just diversification, is key to retirement planning.
- The pros and cons of Roth conversions—and why sometimes doing nothing may be the smartest move.
- How to use TIPS ladders, annuities, and other tools to secure your baseline retirement income.
Show Notes: HowardBailey.com/527
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ABOUT HOWARD BAILEY FINANCIAL: Our mission is to help others gain clarity in purpose and elevate meaning in their lives through personal and practical financial strategies. Our Retire With Purpose™ Framework starts with establishing your unique financial philosophy — the true meaning and purpose for your money in retirement. Through continued education, one-on-one meetings, and a comprehensive team planning approach, we have helped retirees across the country secure their financial futures. And while we can't work with everyone, our goal is to provide value to everyone we meet. Our team of advisors and support specialists strive to deliver the very best experience in pre-retirement and retirement planning. Learn more about our process here: https://howardbailey.com/our-process
Transcript
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| 0:00.0 | If you're going to be a stock investor, more power to you. |
| 0:03.8 | Understand that you are placing a bet. |
| 0:07.3 | You are making a wager. |
| 0:09.7 | And with any wager, you can win or you can lose. |
| 0:26.3 | Today, we're going to do a little bit of myth busting. |
| 0:29.8 | Is stocks for the long run always the safest bet? |
| 0:35.0 | Today, we're speaking with financial historian Edward Macquarie as he challenges decades of conventional wisdom on investing, diversification, and |
| 0:38.1 | Roth conversions. Discover what investors often get wrong about the market's history and how a more |
| 0:44.5 | realistic view of risk can lead to smarter, more resilient retirement planning. Ed was referred to |
| 0:51.3 | us by William Bill Bernstein, who joined us on episode number 510 of the podcast. |
| 0:57.9 | I know some of you truly enjoyed that interview. |
| 1:00.8 | Ed Williams said, if you enjoyed this, you're going to want to talk to Ed. |
| 1:03.9 | And he is the professor emeritus at Santa Clara University. |
| 1:07.5 | And after three decades of teaching in the marketing department, Ed retired from |
| 1:11.9 | Santa Clara in 2016 to pursue research interests in the financial market history and retirement |
| 1:17.5 | income planning realm. He received his PhD from the University of Cincinnati, Go Bearcats. |
| 1:23.0 | And he also has authored several books, and you'll see his research show up periodically in our |
| 1:28.6 | weekend reading for retirees email series. You've probably seen it in the Wall Street Journal, |
| 1:32.7 | maybe Market Watch, or even Barron's for that matter. Today, I'm excited to have Ed here with us |
| 1:38.4 | to not only discuss his research, but also why it's important to rethink risk, returns, and |
| 1:44.1 | assumptions we build our retirements on. |
| 1:47.4 | We'll also be discussing some maybe misconceptions around Roth conversion later in the show. |
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