Is Now a Good Time to Pick Stocks? The Pros & Cons of Active Investing with Jack Raines

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 29 June 2022

⏱️ 44 minutes

🔗️ Recording | iTunes | RSS

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Summary

Given current market conditions, it seemed like a good time to revisit the age-old temptation for investors: Should I…try to stop the bleeding and make more active investment choices? Surely I could do better than -22%! In most personal finance circles, this question is heresy—but lucky for you, I like to rock the boat. We’re digging into the case against active, some oddly compelling arguments for it, and everything in between in this week’s episode. Don’t call the FI/RE department on me! (See what I did there?) I'm joined by Jack Raines of the blog Young Money (https://www.youngmoney.co/) today to discuss 'the true cost of alpha.' (Alpha = an investment's ability to beat the market.) This is also our first episode with a listener Q&A. Today’s is about commission income: How it’s taxed, how to budget for it, and how to invest it. Got a question you want answered? Make sure you’re following Money with Katie on Instagram, where you’ll see our call for questions! — Mentioned in the Episode Jack's article, A New Definition of Alpha Nick's article, Why You Shouldn't Pick Individual Stocks Dalio's book, The Changing World Order Mike Green interview on Resolve's Gestalt University Follow Along Listen to Money with Katie here: https://www.podpage.com/money-with-katie-show/ Read Money with Katie: https://moneywithkatie.com/ Follow Money with Katie! Instagram - https://www.instagram.com/moneywithkatie/ Twitter - https://twitter.com/moneywithkatie TikTok - https://www.tiktok.com/@moneywithkatie This episode is sponsored by Betterment. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back Rich Girls and Boys to the Money with Katie Show.
0:10.3	I'm your host, Katie Gatti Tossan, and today we are going to talk about something that's
0:15.4	practically financial independence, heresy, individual stock investing, and more broadly,
0:23.1	active management strategies.
0:26.4	So, one thing I noticed when I first immersed myself in the personal finance world was that
0:37.7	the devotion to passive investing, like the bogal heads theory, if you will, was strong.
0:43.9	So strong, in fact, that active investing really isn't even entertained as a conversation
0:50.5	in the financial independence communities.
0:53.1	It's practically a given in those circles that buying the total stock market, like VTS
0:58.3	I X and calling it a day, is the undisputed best path forward.
1:03.3	And I think it's probably a strategy that owes its popularization to JL Collins who published
1:09.6	the book The Simple Path to Health.
1:12.1	And I myself mostly subscribe to that dogma with a few tweaks, but it always interested
1:17.8	me that we totally ignored active investing as a viable strategy altogether.
1:23.3	To be fair, the data is there to mostly disprove active management's viability over the long
1:29.3	term, so it's, you know, treated as a case closed for retail investors with mostly good
1:34.9	reason that said, I can't help myself.
1:38.5	Anytime anything is treated as a given that's not even worth exploring or talking about,
1:44.1	I just want to get in there and mess it up.
1:47.0	And I realize this might be a relatively frustrating episode as a listener because I'm
1:50.7	not providing a clear conclusion or answer, but that's kind of the point.
1:55.3	I want to encourage you to come to that conclusion on your own and give you some new things
	...

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