MTI019: Is Modern Portfolio Theory Wrong? with David Stein

Money Tree Investing

Money Tree Investing Podcast

Stockmarket, Valuestocks, Investing, Finance, Passiveincome, Wealth, Business, Personalfinance

4.6 • 658 Ratings

🗓️ 26 December 2014

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

Interview David Stein of podcast Money for the Rest of Us about the flaws in asset allocation and modern portfolio theory. What are your other options and how can you manage your investment portfolio better. Resources Money For The Rest

Transcript

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0:00.0	Welcome to the Money Tree Investing Podcast.
0:04.6	Stock market, wealth, personal finance, value stocks, invest in your life.
0:12.3	Welcome to another episode of Money Tree Investing Podcast.
0:15.8	Today I'm your host, Larry Ludwig.
0:18.4	For those who wish to check out the show notes, this is episode number 19.
0:22.2	And you can go to our website at moneytreadpodcast.com slash 19.
0:28.4	Today's topic is modern portfolio theory, asset allocation, and its flaws.
0:33.8	Today our guest is David Stein.
0:36.3	David is the host of Money for the Rest of Us, a weekly personal finance show.
0:40.7	It's an educational platform on money, how it works, and how to invest it.
0:45.5	Previously, he was the chief investment strategist and chief portfolio strategist at Fund Evaluation Group,
0:52.0	a $35 billion institutional investment advisor.
0:56.0	You can find him at money for the rest of us.net or on Twitter at J.D. Stein.
1:02.2	Let's welcome him to the show.
1:04.8	Hi, David. Welcome to the program.
1:07.3	Hi, thanks for having me.
1:08.9	So I actually got interested in your podcast from a friend of mine, and they talked about one of the interesting things that really caught my eye in your podcast was the whole idea of modern portfolio theory and why it's flawed.
1:23.4	Can you talk to me a little bit about why you think that is so? I actually agree with you.
1:27.9	So to start off with the argument that I'm not,
1:31.6	just if anything, play devil's advocate and all this stuff.
1:34.2	But tell me more about why you think modern portfolio theory is flawed.
1:39.7	Well, the short answer is it puts supposedly statistical rigor around something that isn't terribly statistically rigorous.
	...

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