Nothing Wins

Talking Real Money - Investing Talk

Don McDonald

Investing, Education, Business, How To

4.5 • 810 Ratings

🗓️ 9 October 2025

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

Don and Tom dive into a new Morningstar report showing that tactical allocation funds—those run by “smart” managers who actively shift investments—significantly underperformed simple buy-and-hold index portfolios. They unpack why doing nothing often wins, discuss investor behavior gaps, and revisit the power of staying the course. Listener questions follow on mortgage payoffs, TIAA advisory fees, and adjusting stock/bond splits in retirement. The episode wraps with Don revealing his personal ...

Transcript

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0:00.0	Reality Radio for a really great future.
0:08.0	We're talking real money.
0:10.5	Oh my gosh, it's time again for another exciting episode of talking real money.
0:15.3	We know you've waited ages for this, and so we better deliver something really good today and we think we've got something
0:23.0	really good for you because it's oh i love the headline i did i the minute i saw this headline
0:29.0	i said oh this is it this is our story it's from morning star we like morning star sometimes
0:35.7	we like some of their stuff we like this this kind of stuff. Love this headline.
0:40.3	These fund managers could have gone fishing. Fishing. Not fishing. Fish in. And earned double the return. A do nothing portfolio trouts the performance of the average tactical allocation fund, which is so important.
0:58.2	It's such an important message, and I hope people are getting it. By the way, it reminded me of
1:03.4	my father, the doctor, because he hated buy and hold investing. He thought it was horrible.
1:09.9	You know, wait, you're just going to watch the
1:11.4	market go down. You're not going to do anything. I can remember arguing with him.
1:15.2	A lot of people of particularly of his generation.
1:17.7	Thought it was really stupid. And some of ours think that that is just, that's just being lazy.
1:22.3	I know. What do you mean you're not there trading, et cetera? And we're not going to go into all the numbers on
1:29.2	that but timing the market hmm not a great strategy well and let's explain before we get into it
1:35.1	what a tactical allocation fund is these are they're kind of like they're kind of like hedge funds
1:43.1	their uh portfolios run by a manager they're kind of like, they're kind of like hedge funds.
1:53.6	Their portfolios run by a manager who believes they have the magical information based on their fancy algorithms to change the allocation of the portfolio in advance of things that happen to either impact securities
2:03.9	to the upside or the downside using their fundamental and technical charting squiggly line skills.
2:11.3	And they charge a lot more money for their services than do index or relatively passive funds.
2:19.1	So you'd think they would make you more money, right?
	...

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