Low Risk Fantasies

Talking Real Money - Investing Talk

Don McDonald

Education, Business, Investing, How To

4.5 • 811 Ratings

🗓️ 23 June 2025

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

Don and Tom expose the seductive illusion of “wealth without risk” by dissecting the explosion of equity-hedged ETFs and mutual funds. They tear into the high fees, low returns, and false promises sold by funds claiming to protect investors from market drops while capturing the upside. With support from recent Wall Street Journal coverage and AQR data, they explain how these “hedging” strategies—especially options-based ones—often underperform simple stock/bond portfolios. Listener questions ...

Transcript

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0:00.0	Reality Radio for a really great future.
0:08.0	We're talking real money.
0:10.9	Wouldn't it be nice?
0:13.1	If you could get everything you wanted from your investments,
0:17.7	wouldn't that be a wonderful world?
0:20.4	And we all dream of such a wonderful world,
0:23.5	a magical place where you can invest your money and yet not worry about the market going down.
0:31.7	You get to make money when the market goes up, but you don't lose it when it goes down.
0:38.4	The dream of every investor.
0:40.8	Except, you know, your real dreams, when you wake up and you go, oh, yeah, none of that
0:45.9	stuff actually could happen in real life.
0:48.2	Well, that's the case with any investment that promises to protect you from the downside while still delivering
0:57.3	the upside.
0:58.9	And for me, by the way, it's not money.
1:01.1	It's chocolate.
1:02.1	I want that thing where I can eat all the chocolate I want and I never gain any weight.
1:05.7	And still this never happens.
1:07.8	You do love your chocolate.
1:09.0	I know.
1:09.3	I do.
1:09.7	So that would be my dream. And I guess there is a shot now kind of for that, but I haven't tried that aspect. A chocolate shot? Yeah, you could get like chocolate liqueur, a little shot. Shot in your mouth. All right. So this is fascinating to me because, yes, this is what everyone wants. And guess what? They're being sold this all over the place.
1:28.3	Americans have poured money.
	...

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