Bogleheads® 2022 Conference – Panel Discussion on Investing with Bogleheads Experts, Karen Damato
00:00:00.000 | [ Applause ]
00:00:06.000 | >> Hello, everyone.
00:00:07.200 | Let's get into our next session.
00:00:08.760 | I'd like to introduce our ACE moderator here, Karen D'Amato.
00:00:13.900 | You'll be seeing her on several sessions throughout the conference.
00:00:17.780 | Karen is joining us on a volunteer basis.
00:00:20.460 | She has been a great addition to our Bogleheads team over the years,
00:00:24.940 | and we're so happy to have her here.
00:00:26.480 | Karen is very good at asking questions.
00:00:29.860 | And it's probably not surprising because she has had a long, fabulous career asking questions
00:00:37.040 | and answering questions and reporting on financial matters.
00:00:41.100 | She was an assistant managing editor at Time Money Brand, and before that,
00:00:45.720 | spent more than 30 years as a writer and editor at the Wall Street Journal.
00:00:49.960 | She's now the content manager of a major New York law firm and has graciously donated her time
00:00:57.260 | to be here and to moderate a number of sessions for us.
00:01:01.180 | So, Karen, I'll let you take it from here.
00:01:02.780 | [ Applause ]
00:01:08.800 | >> Well, thank you all.
00:01:10.340 | Very wonderful to see so many people here, to see so many first-time Bogleheads attendees.
00:01:17.820 | Thank you to Bill and Jason for kicking us off with an amazing session.
00:01:24.680 | Two incredibly smart, thoughtful people who made us laugh a lot as well,
00:01:30.600 | who shared a lot, which we appreciate.
00:01:33.340 | I'm enjoying towering over Jason Zweig.
00:01:36.820 | I don't think I've ever had that experience before.
00:01:39.500 | So, for our panel on investing, we welcome back Bill and Jason.
00:01:47.100 | >> I'm the ringer.
00:01:48.680 | >> And you know our other panelists as well, but let me take a moment to introduce them as well.
00:01:57.060 | Rick has worked in the investment industry for about 35 years.
00:02:02.580 | He is the founder and CEO of Ferry Investment Solutions, which serves individuals
00:02:08.900 | on a fixed rate and hourly fee basis.
00:02:11.880 | He's written several books and is the current president
00:02:15.440 | of the John C. Bogle Center for Financial Literacy.
00:02:19.400 | And Jim Dolley is our second outstanding representative from the medical community.
00:02:25.740 | Jim is an emergency room doctor, a writer, a speaker.
00:02:30.640 | He started the White Coat Investor website in 2011 to provide investing
00:02:36.320 | and personal finance advice to the medical community.
00:02:40.840 | And yesterday, many of you heard Jim as the host and a panelist at Bogleheads University.
00:02:47.200 | He was very busy for a good chunk of the day.
00:02:49.640 | This is a little intimidating, starting a panel on investing after the setup we got from Bill
00:02:56.700 | and Jason talking about how many errors people make in looking at the markets
00:03:04.560 | and in our own emotions and trying to make sense of what's going on outside
00:03:11.940 | and then bringing it back to our personal portfolios.
00:03:16.600 | I think it's fascinating that we're having this conversation.
00:03:19.520 | We did a panel, oh, about 15 months ago, maybe a little more, a year and a half ago,
00:03:24.640 | when the major questions we got from people, attendees ahead of time were
00:03:30.920 | about stock prices are so high, I can't find any bargains,
00:03:35.460 | bond yields are so low, what am I going to do?
00:03:38.160 | So obviously, we have a very different environment now to talk about.
00:03:42.660 | And many of us should be gleeful.
00:03:45.500 | Whether we really truly feel gleeful is another story.
00:03:48.460 | So just looking at the environment we find ourselves in, a year of steep losses across stocks
00:03:56.740 | and bonds around the globe, high inflation, possible recession, just big picture,
00:04:04.320 | how should I be thinking about the environment we find ourselves in?
00:04:09.640 | And Bill, why don't you kick us off because you went halfway there in the previous session?
00:04:14.640 | >> Well, let me get the other half of the way there and say that I'm as optimistic now
00:04:19.420 | as I have been in a long time.
00:04:23.960 | Why? Because if you're an accumulator, you can buy stocks cheaply now, okay, for the most part,
00:04:30.780 | not all of them, but a lot of sectors are very inexpensive.
00:04:34.460 | And if you're a geezer, and you don't have any human capital left, you can now,
00:04:39.940 | as I said earlier, de-fees your future liabilities, your future living,
00:04:44.240 | real living expenses with very plump tips yields.
00:04:48.520 | Now, you know, I think things may actually be worse on the short term than we think they are.
00:04:53.900 | I mean, I think there's a good chance we're looking at a new global financial crisis.
00:04:57.760 | But the market already knows that.
00:05:00.240 | Okay, that's why it's going down 25%.
00:05:02.300 | During a real financial crisis, markets go down 50%.
00:05:06.760 | Well, what the 25% fall in the market is telling you is
00:05:10.280 | that the market thinks there's a 50% probability of that.
00:05:13.240 | And if it doesn't occur, market's going to rebound.
00:05:15.560 | And if it does occur, it's going to go down, but not an awful lot more.
00:05:19.620 | >> I have two announcements that I was told during the break.
00:05:24.880 | Social security will increase by 8.7%.
00:05:31.020 | That's the CPI, or the inflation increase next year.
00:05:33.800 | I bonds, the number we've all been waiting for, will be 6.48,
00:05:42.960 | basically the inflation rate with no interest.
00:05:45.980 | But still, getting back to Bill's point, I like to look at things.
00:05:53.000 | I wish that the market never went up a lot in 2021.
00:05:59.080 | And I wish that real estate didn't go up a lot.
00:06:01.860 | And I wish that NFTs and cryptocurrencies and all of these things,
00:06:06.060 | this speculation that occurred in there didn't happen.
00:06:09.580 | And that stock prices didn't go up 20-some odd percent in 2021.
00:06:14.720 | Because if they didn't, then where would we be today based
00:06:18.460 | on where things were at the end of 2020?
00:06:21.840 | And we'd all be looking, saying, ah, things aren't really too bad.
00:06:24.420 | I mean, the market's up a little bit.
00:06:26.080 | Interest rates are maybe up a little bit, but not too bad.
00:06:28.860 | But what happened was not what's happening this year.
00:06:32.460 | What's happening this year is everybody's focusing
00:06:35.600 | on what happened from January until today.
00:06:39.100 | Stocks went down, bond interest rates went up, bond prices went down.
00:06:43.820 | Of course, crypto and everything else, everything speculative went down.
00:06:46.660 | But if you started this whole evolution two years ago, and you said, well,
00:06:50.380 | where are we from two years ago, you'd have a whole different opinion.
00:06:53.520 | So if you were able to do the Rip Van Winkle thing, invested two years ago and just look
00:06:58.480 | at where we are today, it would be kind of a non-event.
00:07:01.720 | This conversation, this question wouldn't even come up.
00:07:04.380 | >> Fair enough.
00:07:05.840 | Let's talk a little bit more about the U.S. stock market.
00:07:10.700 | So when you look at the market, are there areas of the market that are still overvalued?
00:07:17.680 | And where do you see the greatest opportunities, areas that seem most undervalued?
00:07:23.660 | >> Well, that's a tough question.
00:07:26.220 | Overvalued and undervalued is in the eye of the beholder.
00:07:29.740 | And the truth is that the market is probably smarter than any of us individually.
00:07:34.500 | And so theoretically, it's never overvalued or undervalued.
00:07:38.960 | And it's a tough question you're asking because you're saying in the U.S. market,
00:07:45.280 | what do you see as being undervalued or overvalued?
00:07:48.440 | And when I start looking for value, the U.S. market is not where I look these days.
00:07:55.260 | >> I mean, I would just echo what Jim said.
00:07:58.020 | I mean, I think international markets
00:08:00.900 | on a relative basis are a lot more attractive than the U.S.
00:08:05.360 | >> And I think there are a lot of people in the audience who would be happy to hear that.
00:08:10.240 | You know, we got a number, we got questions from people
00:08:13.680 | about a perennial Fogelhead's question of investing in, can you just invest in U.S. stocks
00:08:20.520 | or should you also have international stock exposure?
00:08:23.860 | One of the questions from the audience was,
00:08:26.160 | will international equities ever outperform U.S. equities or even equal perform?
00:08:32.960 | >> That's an easy question.
00:08:34.540 | The answer to that is yes.
00:08:35.640 | The hard question to answer is when.
00:08:38.260 | You'll all remember, well, maybe you won't all remember, but you should remember
00:08:43.340 | if you've been a student of market history, as Bill has recommended you be,
00:08:46.440 | a decade we called the lost decade was not that long ago
00:08:51.380 | in which people all said U.S. stocks stink.
00:08:55.080 | Why would you invest in U.S. stocks?
00:08:57.300 | U.S. stocks haven't returned anything in a decade.
00:08:59.680 | It wasn't that long ago.
00:09:01.660 | And now I'm hearing the exact same thing about international.
00:09:04.800 | Well, what did great the last 10 years?
00:09:06.880 | U.S. stocks did.
00:09:08.120 | You know, Jack Bogle was always saying the pendulum swings back and forth.
00:09:13.220 | It returns to the mean.
00:09:14.680 | And it tends to do that.
00:09:16.060 | You don't know exactly when, but over time, every asset class has its day in the sun.
00:09:21.100 | And you want to be in it when it has its day in the sun.
00:09:23.960 | And the only way to really do that is to own it in the long term.
00:09:26.720 | >> And in the stock market in particular, staying in the stock market,
00:09:31.860 | do you recommend investing with a total stock market dollar weighted type approach
00:09:38.040 | or do you tilt your portfolios, large, small, growth value?
00:09:42.660 | >> Well, just to, you know, put a point on it,
00:09:48.840 | obsessing over precisely what your asset allocation is.
00:09:51.700 | Do you tilt?
00:09:52.300 | Don't you tilt?
00:09:52.900 | How much international?
00:09:53.940 | How much U.S.?
00:09:54.960 | That pales in importance to the question, how disciplined are you?
00:10:00.820 | In other words, sticking with your asset allocation is far more important
00:10:05.640 | than picking the right one, and so the wrong thing to do right now would be
00:10:11.400 | if you did have a total, if you did have a significant foreign allocation,
00:10:15.400 | would be to abandon it right now at a 55, 45 probability.
00:10:19.640 | That's probably a bad bet.
00:10:23.200 | >> So I'd write it up or make the analogy between a cake,
00:10:27.600 | the icing on the cake, and the decorations on the cake.
00:10:31.780 | Okay, we tend to focus on the decorations, right?
00:10:35.160 | What's going up now, what's not going up now?
00:10:37.040 | The icing on the cake is should you have small value, should you have more international,
00:10:42.260 | should you have international, what the real thing that you eat
00:10:45.940 | and that you bring it home with you, what really matters is your asset allocation
00:10:51.440 | between risky and non-risky assets, the thing that Bill was talking about earlier.
00:10:55.520 | This drives 90% of your return, 90% of the variability of your portfolio.
00:11:02.760 | How much you have in safe assets, how much you have in risky assets.
00:11:06.080 | Everything else after that, these are icing on the cake, such as how much in international,
00:11:10.860 | how much in U.S., what factors you have, if you decide to have factors,
00:11:15.940 | and then there's the sprinkles, which seems to be the thing that occupy a lot of time.
00:11:20.980 | This is the cryptocurrencies and all of these other things that really don't matter.
00:11:25.660 | They're sort of shooting stars, but we spend an awful lot of time looking
00:11:28.980 | at shooting stars rather than the ingredients that go in the cake.
00:11:33.080 | >> Let's talk about the bond market some.
00:11:36.080 | We had a number of questions from the audience about bonds.
00:11:39.180 | One was a request for your views on the choice of duration and quality and your rationale.
00:11:45.340 | So short treasuries versus intermediate treasuries versus total bond.
00:11:49.400 | And similar, a question is, is total bond funds still considered good enough
00:11:55.020 | for the bond portion of a 60/40 portfolio for a retiree?
00:12:01.480 | >> Yes.
00:12:02.960 | >> Now it is.
00:12:03.720 | >> I'm a big fan of staying pretty safe with bonds.
00:12:11.300 | I tend to take my risk on the equity side, and I take a lot of risk there.
00:12:16.280 | And so I tend to be pretty safe on the bond side.
00:12:18.980 | I've divided my bonds into nominal and inflation indexed bonds, 50/50.
00:12:26.060 | And the nominal ones, if I could, would all be in the safest bond investment I know of,
00:12:31.960 | which is the TSPG fund.
00:12:34.240 | My entire TSP from my time in the federal service is in the G fund, which is basically,
00:12:42.560 | you know, bond yields with money market risk.
00:12:44.440 | Hasn't been the right investment for the last 16 years until this year,
00:12:48.000 | but this year it's the right investment.
00:12:49.320 | It's a great investment.
00:12:50.840 | But it's not risky at all.
00:12:52.940 | It's a very safe investment.
00:12:54.700 | And then on the inflation index side, it's primarily TIPS and, you know, IBONs,
00:13:02.000 | basically insured by the federal government, backed by the federal government.
00:13:06.240 | And so I don't take a lot of risk.
00:13:07.600 | I don't own corporates.
00:13:08.520 | I don't own junk bonds.
00:13:10.600 | You know, if I'm going to take risk, I take real risk, you know.
00:13:14.160 | I take it in my real estate holdings.
00:13:15.880 | I take it into my stock holdings, but I don't do it on the bond side.
00:13:20.080 | So the only risky thing I've got over there in the nominal side is some muni bonds.
00:13:24.200 | I'm forced at this point to hold some of my bonds in a taxable account.
00:13:27.840 | And so I have a Vanguard Municipal Bond Index Fund there.
00:13:31.640 | I don't know if it's an index fund.
00:13:32.920 | It's a bond fund from Vanguard, which is very index-like.
00:13:36.160 | And it hasn't had a great year this year, like every other bond fund.
00:13:39.440 | But it certainly isn't a risky bond fund.
00:13:42.040 | It's just getting clobbered, so.
00:13:43.480 | >> Yeah, I mean, half of investing is math, and the other half is Shakespeare.
00:13:50.860 | And you gear the fixed income part of your portfolio to deal with the Shakespeare,
00:13:57.680 | being able to sleep in the worst states of the world.
00:14:01.780 | Probably 90%, excuse me, 90% of your returns
00:14:05.920 | derive from how you behave in the worst 2% of the time, all right?
00:14:10.500 | And it may be the T-bills that you have that used to yield close to zero,
00:14:15.500 | were the best performing, highest performing assets in your portfolio.
00:14:19.140 | Because they enable you to stay the course with the rest of it.
00:14:23.540 | Jason, you can correct me if I'm wrong.
00:14:24.940 | But I think at any one moment, about 20% of Berkshire is in T-bills.
00:14:30.540 | There's a reason why Warren Buffett likes T-bills.
00:14:34.220 | >> Yeah, I mean, I would just add one very quick note,
00:14:39.380 | which is to a group like the Bogleheads, I mean, Treasury Direct is like candy.
00:14:47.100 | I mean, a lot of people find the government website kind of
00:14:52.020 | old-fashioned and annoying and hard to use.
00:14:55.140 | I think for Bogleheads, that probably isn't an issue.
00:14:59.500 | And building a ladder of either nominal or
00:15:06.420 | real treasuries in the form of tips is really easy on Treasury Direct.
00:15:13.740 | And I mean, you're getting like a 4% yield on short-term treasuries,
00:15:20.460 | probably more today, and that's nominal.
00:15:24.660 | And you're getting a real return on tips of, as we've talked about,
00:15:29.380 | like in the 2% range, that's, I mean, to me, that's like a free lunch.
00:15:35.460 | >> So let's talk a little bit more about tips.
00:15:39.780 | This morning's CPI report, inflation in September was running 8.2%,
00:15:45.180 | prices 8.2% higher than a year ago.
00:15:48.380 | Core inflation, the highest since 1982.
00:15:51.620 | Inflation index bonds sound great.
00:15:56.420 | And yet, when people have looked at their portfolios, and
00:16:00.180 | you see the Vanguard Tips Fund so far this year is down 13%,
00:16:05.140 | not much less than total bond down 15%.
00:16:10.580 | So, Jim, do you want to talk to us about why?
00:16:15.580 | Let's just start with understanding what has happened this year with the tips.
00:16:20.140 | >> This is one of my biggest frustrations of the year.
00:16:22.820 | And I was discussing this with Bill at dinner last night.
00:16:25.460 | I hold these tips for years and years and years and
00:16:29.140 | years for this moment of unexpected high inflation.
00:16:33.940 | And I just know that's going to be their day in their sun and
00:16:36.620 | they're going to do awesome.
00:16:38.660 | And while everything else is plummeting, at least I'm going to have those tips.
00:16:42.780 | And then this year, you look at intermediate treasuries and
00:16:45.740 | they're down 11%, 12%, and you look at the Vanguard Tips Fund,
00:16:50.660 | which has a slightly longer duration.
00:16:52.420 | So it's a little bit riskier in that respect, down 13%.
00:16:56.380 | It's kind of disappointing to me.
00:16:58.420 | And that even with that inflation factor into it, they're still bonds,
00:17:03.220 | they still act like bonds.
00:17:04.540 | When rates go up, their value goes down.
00:17:07.660 | And rates have gone up a lot this year, both nominal rates and real rates.
00:17:12.860 | And it turns out that I think that factor
00:17:16.580 | is a bigger factor than the inflation adjustment is.
00:17:20.500 | And I'm going to let Bill give you the answer he gave me last night when we were
00:17:23.980 | having this discussion.
00:17:24.940 | >> Yeah, looked at from 50,000 feet, it's pretty simple,
00:17:29.060 | which is that nominal short treasuries are riskless in the short term.
00:17:35.340 | But they're very risky in the long term, because you've got to reinvest them and
00:17:37.940 | you never know what you're going to reinvest at.
00:17:39.820 | And you could wind up reinvesting at a terrible rate,
00:17:41.900 | which is what's happened over the past ten years.
00:17:44.380 | On the other hand, tips are riskless as long as you hold them to maturity, okay?
00:17:51.700 | So I just bought some 20-year tips the other week, and
00:17:56.260 | they're going to be absolutely riskless the year I turn 94, all right?
00:18:00.060 | >> [LAUGH] >> And which is important to me,
00:18:04.140 | because I don't want to be eating cat food when I'm 94.
00:18:06.500 | But tomorrow, they may not be riskless.
00:18:09.700 | And simply because you believe a certain precept in finance
00:18:15.300 | doesn't relieve you of the duty, the absolute duty of estimating expected returns.
00:18:21.860 | And so if you were buying tips a year and a half ago,
00:18:24.900 | you were buying them at the short end, in five years, at a negative 1.5% return.
00:18:32.820 | Which means that basically to get, if you put a dollar into the now,
00:18:39.020 | in five years, you're going to be getting $0.92 worth of consumption value.
00:18:43.460 | Maybe you could justify that on theoretical grounds, but I couldn't.
00:18:46.620 | And so good things come to those who wait.
00:18:53.620 | And that's particularly true of stocks, and it's also true of tips.
00:18:56.180 | >> Two comments, just for clarification.
00:19:00.980 | What Bill said is correct.
00:19:02.300 | If you buy new issue tips, then you'll get the positive rate of return.
00:19:08.860 | You'll get your money back, because the government guarantees if you put $100,000
00:19:13.260 | into a new issue tip, that at maturity, you get $100,000 back.
00:19:16.380 | If you bought a 20-year tip
00:19:22.180 | that has, and you, let me get this right.
00:19:26.620 | So if you bought a tip that was issued ten years ago, okay, at a certain level,
00:19:32.300 | you could lose money on that tip if you didn't buy it at the new issue price.
00:19:37.020 | So new issue tips are guaranteed to get the money back.
00:19:40.860 | But buying a used tip, if you will, something that's been out there for
00:19:44.140 | a while, secondary market tip, that may not be the case.
00:19:47.380 | If it was issued at a price that was lower than what you bought at that,
00:19:54.820 | that's the base price.
00:19:56.340 | So if the new issue tip was issued at a price that was lower than what you bought
00:19:59.500 | it at, it could actually lose value between now and the time that it matured.
00:20:03.980 | >> There's one exception to that, and now we're really getting to the weeds.
00:20:07.060 | There's one exception to that, and
00:20:09.140 | that is there is a tips that matures in February or January, I forget, of 2043.
00:20:14.340 | Which is the one I'm talking about.
00:20:16.060 | Which, if you multiply the inflation factor times its market price,
00:20:18.900 | it's still less than par, and it's got a one-eighth of a point coupon.
00:20:23.780 | So you're basically buying a zero, so there's one exception to that rule.
00:20:28.020 | >> [LAUGH] >> One more thing,
00:20:32.580 | I just wanted to clarify, what Jim was saying.
00:20:35.580 | So the correlation between inflation and
00:20:41.420 | a tips index fund isn't very high, and which we've seen, negative 13%, right?
00:20:47.780 | But the correlation between short-term tips and inflation is much higher.
00:20:52.700 | So if you're buying tips for the inflation hedge,
00:20:56.220 | you would really wanna focus on short-term, like the Vanguard short-term tips fund.
00:21:00.420 | >> And I guess a related question that we often come up against in bond investing
00:21:06.740 | is buying individual bonds versus buying funds.
00:21:10.180 | So if I want tips exposure as an inflation hedge,
00:21:15.380 | do I have to buy the individual bonds, or do I buy the fund and
00:21:19.060 | I just avert my eyes when the price fluctuates?
00:21:22.180 | >> Personally, I think that it's either, if you wanted to do a bond ladder,
00:21:27.180 | that works fine.
00:21:27.860 | If you wanted to just do a fund, the duration is going to be the same.
00:21:31.260 | So I don't see much difference, and I used to manage a lot of money in bonds, and
00:21:34.820 | I really don't see much difference.
00:21:39.020 | >> Okay, so it's just a psychological one.
00:21:41.020 | I have to just not look.
00:21:42.980 | Right. >> Yeah, I own both.
00:21:44.940 | So in my 401(k)s, I use a tips fund.
00:21:48.420 | And now that I'm having to buy some in my taxable account,
00:21:51.580 | I'm just buying them at Treasury Direct.
00:21:53.100 | I'm buying the individual issues.
00:21:55.100 | And they both have pluses and minuses.
00:21:57.220 | And if those pluses and
00:22:00.460 | minuses matter a lot to you, then choose one over the other.
00:22:03.300 | But for most of us,
00:22:04.660 | it's probably not a big question when it comes to your portfolio construction.
00:22:08.980 | >> I guess I would just add one distinction, which is if your choice,
00:22:14.740 | for whatever reason, is between buying one single issue of tips and buying a fund,
00:22:22.780 | I would definitely buy the fund.
00:22:24.820 | But if you can build a ladder or
00:22:27.060 | a diversified portfolio of individual tips,
00:22:30.420 | then I don't really think there's much difference.
00:22:33.260 | >> Thank you.
00:22:34.500 | Let's talk about real estate.
00:22:36.740 | So REIT funds are among the many asset classes that are off sharply this year.
00:22:41.980 | The Vanguard REIT fund is down about 32%.
00:22:46.100 | One question we had from the audience is,
00:22:49.180 | are REITs still considered a separate asset class?
00:22:52.220 | Are they worthwhile to have in a portfolio?
00:22:54.300 | You can take those as two separate but related questions.
00:22:56.860 | >> Go ahead, you're the REIT guy.
00:23:00.620 | >> I'm the real estate guy now, huh?
00:23:02.180 | >> [LAUGH] >> I treat them as a separate asset class.
00:23:05.460 | My portfolio is 60% stocks, 20% real estate, and 20% bonds.
00:23:09.900 | Of that real estate allocation, 5% is simply in the Vanguard,
00:23:14.460 | publicly traded REIT index fund.
00:23:16.860 | I own all the publicly traded REITs there.
00:23:19.220 | I technically own them also in my total stock market fund.
00:23:21.940 | They're all there, so I'm overweighting it.
00:23:24.740 | And the reason I overweight it is because there's an awful lot of real estate in
00:23:28.700 | this country and in this world that is not publicly traded.
00:23:32.100 | Much more so than other businesses.
00:23:35.180 | And so I think you can justify overweighting real estate from that argument.
00:23:41.820 | I also have about 15% of my portfolio that is not in publicly traded real estate.
00:23:47.060 | It's in private real estate.
00:23:49.220 | And the reason there is because I find some aspects of those investments
00:23:52.580 | to be attractive.
00:23:53.860 | I see an illiquidity premium there.
00:23:56.700 | I see some high expected returns.
00:24:00.100 | And I find that I have enough money that I can actually diversify in that space,
00:24:04.500 | which is a tough thing for a lot of investors to do.
00:24:06.820 | But I'm a big fan of real estate.
00:24:10.380 | I do think it is a separate asset class.
00:24:13.860 | The real downside of publicly traded REITs is that their correlation with
00:24:18.180 | the overall stock market is moderate to high.
00:24:22.260 | And that's disappointing when you're looking for something that has high
00:24:25.380 | returns, but low correlation with your stocks.
00:24:28.860 | Publicly traded REITs do that somewhat, but not awesome.
00:24:32.860 | >> Okay, there is periods of time when REITs have been negatively
00:24:37.860 | correlated with the rest of the market.
00:24:41.260 | So I know we haven't had one of those times, but there are times when it occurred.
00:24:46.180 | It's a very variable thing.
00:24:47.660 | And lately, yes, it has had high correlation.
00:24:51.140 | I think you have to look at REITs.
00:24:53.340 | And by the way, the return of REITs versus the private market has actually been
00:24:57.300 | a little bit better.
00:24:58.020 | I did a podcast with Antti Ilmenen from AQR recently,
00:25:03.100 | maybe some of you caught that podcast.
00:25:04.740 | We were talking about real estate.
00:25:06.220 | And we were talking about private real estate versus REITs.
00:25:08.500 | And it turns out that, in his research, REITs have done better.
00:25:12.660 | Now, REITs are a little leveraged, perhaps, and
00:25:14.940 | that's what he believed was the reason.
00:25:19.620 | And I thought his view on REITs were good, though.
00:25:21.860 | He was basically saying that the dividend yield that the REITs are providing.
00:25:28.620 | So if you have a REIT index fund, which right now is probably close to a 3%
00:25:33.980 | dividend yield, is probably the real return over inflation
00:25:39.380 | that you're gonna get from that investment.
00:25:41.700 | Because the real estate portion of that
00:25:44.500 | is going to eventually increase with the inflation rate.
00:25:48.220 | So if inflation goes up by 3%, the price of the REITs eventually will reflect that,
00:25:55.060 | and they'll go up by 3%, and the dividend yield on top of that that you're getting,
00:25:59.260 | the other 3%, is what your real return is.
00:26:02.540 | And I think that's probably pretty accurate.
00:26:04.940 | He also said that real estate was probably expected to return a little bit
00:26:09.300 | less than equity, so somewhere between equities and fixed income.
00:26:13.020 | And I do think that having real estate in your portfolio
00:26:16.260 | as a separate asset class makes sense.
00:26:18.260 | Because as Jim said, there's so much of it out there, and so
00:26:21.220 | much of the real estate is privately owned, that if you want your portfolio to
00:26:25.660 | more reflect what the economy is, or what GDP is, rather than what
00:26:30.780 | the stock market is, then you would own a little more real estate.
00:26:33.940 | >> Wanted to hit on another question about dividends.
00:26:38.220 | This was a question from the audience.
00:26:40.180 | It's a more philosophical question.
00:26:42.820 | Do dividends matter?
00:26:44.900 | That is, on a fundamental level, why should a corporation pay a dividend and
00:26:49.940 | create unwanted income for taxable investors?
00:26:53.740 | >> Boy, isn't that a good question?
00:26:55.060 | There's something called the Miller-Mavigliani theory that says it
00:26:59.220 | doesn't matter whether a company gives the dividend out to you or reinvests it.
00:27:06.460 | There's a school of thought that says that
00:27:09.620 | companies shouldn't pay dividends at all.
00:27:11.340 | They should just be buying back their own stock,
00:27:13.860 | which is actually more tax efficient.
00:27:17.060 | But the history of finance suggests that companies do not
00:27:21.380 | make good use of eternally generated capital, all right?
00:27:25.780 | Think Snapple, okay?
00:27:27.380 | Think Time Warner AOL.
00:27:30.420 | And in general, my philosophy is that it's better that companies
00:27:35.820 | give you those dividends.
00:27:37.580 | Now it also, companies that, a high dividend rate is also a marker for
00:27:43.060 | a value company as well, for the value factor,
00:27:47.620 | which also suggests a slightly higher return as well.
00:27:51.220 | So I'm a big fan of dividends, because you can use that capital
00:27:55.420 | a lot better than some megalomaniacal CEO can.
00:27:58.100 | >> [LAUGH] >> I would just add one note.
00:28:03.700 | Many years ago, back in the 80s, I think it was,
00:28:08.820 | Hugh Leetke, who then was the CEO of Pennzoil,
00:28:13.660 | said that he had come to believe in what he called the bladder theory of dividends.
00:28:20.500 | Which was, it was good for companies to pay them so
00:28:22.980 | they wouldn't piss their money away.
00:28:24.540 | >> [LAUGH] >> So
00:28:28.500 | I just wanna make a comment on dividends.
00:28:30.260 | It has to do with taxes, taxes, okay?
00:28:33.020 | So if your dividend-paying stock is in your taxable account,
00:28:36.060 | then you have to pay taxes on that.
00:28:38.060 | If it's a US total market fund, usually it's long-term capital gain, about 90%.
00:28:42.780 | If it's an international fund, only 70% would be long-term capital gain,
00:28:47.380 | and the other would be ordinary income.
00:28:49.260 | So if you're looking for dividends in your taxable account to live off of,
00:28:55.300 | you could say, well, I could have some internationally, I could have some US.
00:28:59.140 | Or I could do something Alan Roth, who's sitting over here, suggested one time,
00:29:03.460 | is that buy a US total market fund in your taxable account, which pays low dividend.
00:29:08.660 | And if you need to sell some stock, at least when you sell it,
00:29:12.140 | it'll be at a long-term capital gain, so you're gonna pay that rate.
00:29:15.380 | But if you don't need to sell it because you don't need the money,
00:29:17.300 | then just leave it in there.
00:29:18.260 | So from a tax standpoint, you really gotta think about
00:29:23.100 | dividends in your taxable accounts, just wanted to bring that up.
00:29:26.540 | >> Let's talk a little bit more about taxes.
00:29:29.020 | So obviously, with the market down a lot, there are people who will have
00:29:34.420 | losses from when they purchase some of their investments,
00:29:37.420 | that they can do tax loss harvesting.
00:29:40.900 | I'd be interested in your thoughts on how helpful tax loss harvesting is,
00:29:46.980 | in any particular strategies or
00:29:48.940 | ways you think people should be thinking about that this year.
00:29:51.860 | >> So my view on a taxable portfolio, again, because we're talking tax loss
00:29:56.580 | harvesting, is you want forever funds in your taxable account,
00:30:00.300 | total stock market, total international, things you're gonna hold forever.
00:30:04.100 | That's what you want in your taxable account.
00:30:06.700 | But if you have the opportunity to do a tax loss harvest using tax lots,
00:30:11.620 | because you bought in over time, because you have different tax lots,
00:30:14.420 | some that might be down, you wanna go ahead and
00:30:16.420 | sell the Vanguard total stock market, and you buy the iShare total stock market.
00:30:20.100 | You wanna sell the Vanguard total international,
00:30:21.860 | you wanna buy the iShare total international, ETF.
00:30:24.180 | You wanna take the tax loss, then you can take that tax loss,
00:30:26.980 | you can write off $3,000 worth of ordinary income, and you can use it to write off
00:30:31.140 | long term capital gains that you may have later on down the road as well.
00:30:34.340 | And if you die, your kids get a stepped up basis, or
00:30:36.700 | your ears get a stepped up basis, so they never have to make it up.
00:30:39.580 | So there's no recapture of that.
00:30:41.020 | >> Can you really get away with that?
00:30:43.620 | I mean, aren't the iShares and say the Vanguard Fund substantially similar?
00:30:49.820 | I worry about that, it's a practical issue.
00:30:54.540 | It may not be important, so you don't worry about it, all right.
00:30:57.620 | >> I don't worry about it.
00:30:59.020 | If it's got a different Q-SIP number, does anybody know anybody who's ever been
00:31:03.900 | audited over their tax loss harvesting?
00:31:05.580 | I've asked this question to a lot of audiences, and
00:31:10.380 | nobody's ever raised their hand.
00:31:11.980 | I'm not worried about that swap at all.
00:31:14.460 | And those are the two partners I use.
00:31:17.740 | So when I was getting my master's, I did a paper on tax loss harvesting.
00:31:21.900 | What does this substantially identical mean?
00:31:24.500 | And you have to go back years to find cases of tax law that says,
00:31:29.060 | there was this case that was brought up in front of a tax court where they sold
00:31:32.420 | a five-year treasury bond, and they bought another five-year treasury bond.
00:31:35.300 | But the coupon was a half a percent different.
00:31:38.180 | Sell one five-year treasury, buy another five-year treasury,
00:31:40.540 | half a percent difference in the coupon rate.
00:31:43.220 | The judge threw out the case, not substantially identical.
00:31:45.980 | The coupons were different.
00:31:47.220 | So certainly, if you have a fund that's issued by Vanguard, and you sell it, and
00:31:50.780 | you buy a fund issued by iShares, it can't be substantially identical.
00:31:55.540 | >> Totally agree with that.
00:31:59.140 | >> [LAUGH] >> The value of tax loss is beyond
00:32:04.060 | the $3,000 a year, really depends on how you're going to use them.
00:32:08.820 | If those are shares you're gonna sell later anyway,
00:32:11.940 | you're just deferring taxes on them.
00:32:13.700 | Maybe you can defer them to a time when you're in a lower capital gains bracket,
00:32:17.780 | and you get a little bit of an arbitrage there.
00:32:19.700 | But it really depends on how you're going to use those, and
00:32:22.260 | whether you're gonna have a use for them.
00:32:24.100 | And possible uses down the road for collecting hundreds of thousands of
00:32:27.780 | dollars of tax losses might be if you're gonna sell a really valuable house,
00:32:32.340 | for instance.
00:32:33.060 | Remember, only your first $250,000 or first $500,000,
00:32:37.180 | if you're married, of your house gains are tax-free.
00:32:41.180 | After that, it's a capital gain.
00:32:43.900 | If you're gonna sell a small business, for example,
00:32:47.620 | that would be something you could use all of those tax losses for.
00:32:51.540 | So even though I've got enough tax losses to subtract $3,000 a year from my taxes
00:32:57.220 | every year from now until the time I'm 150, I'm still grabbing those
00:33:02.460 | tax losses for other purposes, for other capital gains I could have down the road.
00:33:07.620 | So I think it's an exercise worth doing.
00:33:10.300 | It's not very hard to do.
00:33:11.460 | I'm not in there every day trying to do it.
00:33:13.580 | I'm not hiring an advisor to do it.
00:33:16.460 | If you just check every couple of months in a bear market, that's enough tax loss
00:33:20.460 | harvesting for most of us to have enough losses to do at least the $3,000 a year
00:33:25.980 | for the rest of our lives.
00:33:27.980 | >> Let's talk a little bit about rebalancing.
00:33:30.140 | Just going across the panel, I'd be interested in how often you rebalance
00:33:35.380 | your portfolio, how often you think people should look at their portfolio and
00:33:39.660 | rebalance.
00:33:41.260 | >> Well, I guess one quick note I would mention is that Jack Bogle didn't really
00:33:48.060 | believe in rebalancing, but everybody else does.
00:33:54.260 | [ Laughter ]
00:33:58.780 | You know, I'm quirky.
00:34:01.140 | Like I have an HSA.
00:34:04.340 | Christine will be happy to know I shovel as much money into that thing as I can.
00:34:09.540 | And I rebalance that every paycheck.
00:34:14.900 | I don't know why, but it makes me feel good somehow.
00:34:21.380 | And elsewhere in my portfolio, I rebalance very, very seldom.
00:34:30.860 | And typically what I do is I rebalance by harvesting some losses, and that's the
00:34:39.460 | way I do it.
00:34:41.780 | >> I think the data is pretty clear that the ideal interval to rebalance is greater
00:34:45.940 | than a year.
00:34:47.420 | It's between one and three years I think is what most of the data has shown on that.
00:34:52.460 | What do I do?
00:34:53.460 | Well, I'm still enough of an accumulator that I'm pouring enough money into the
00:34:56.180 | portfolio every year that I can just rebalance with new contributions.
00:34:59.900 | So I invest once a month.
00:35:01.700 | I take all the income from all sources that I have in the previous month, add it up,
00:35:05.660 | determine how much of it is going to be invested, and then I tend to look at my
00:35:08.940 | investments and go, "Well, what's behind?
00:35:11.660 | Let's throw all the money in there."
00:35:13.340 | But I can tell you over the last 16 years or so that I've been investing, 18 years,
00:35:18.500 | I've come to worry much less about having my portfolio exactly in balance.
00:35:23.940 | Close enough is good enough.
00:35:25.580 | This is horseshoes and hand grenades terrain.
00:35:27.660 | Yes, if you've gone from an 80% portfolio to a 50% portfolio, you need to rebalance.
00:35:33.340 | But if we're talking about 80% and 77%, those portfolios perform almost identically
00:35:38.180 | anyway.
00:35:39.180 | I certainly wouldn't accumulate any tax cost or transaction cost to do a rebalancing like
00:35:45.700 | that.
00:35:46.700 | Yeah.
00:35:47.700 | I mean, the pluses and minuses of rebalancing aren't all that big.
00:35:55.620 | One thing we haven't talked about is are you in a taxable or a sheltered environment?
00:35:58.780 | If you're in a taxable environment, the cost of rebalancing is substantial.
00:36:02.380 | Whereas, if you're in a tax-free or sheltered environment, it's not.
00:36:06.900 | I think that you rebalance for two other reasons that have nothing to do with return.
00:36:12.060 | Number one, you're doing it to limit risk, all right?
00:36:15.020 | You don't want to wake up one morning with an 85-15 portfolio and then be devastated
00:36:20.300 | when you get hit with a huge stock market fall if that prevents you from sleeping.
00:36:27.240 | If it doesn't prevent you from sleeping, then God bless.
00:36:30.540 | But the other reason why you rebalance is for emotional conditioning.
00:36:34.460 | It customs you to buying low and selling high.
00:36:40.340 | And both of those are not easy emotional things to do.
00:36:44.020 | And it sort of keeps you in financial shape, which is the reason why I do it, is just to
00:36:51.500 | keep my contrarian muscles moving.
00:36:55.180 | A lot of times, if you're going to run into taxes because all your equity is in your taxable
00:37:00.460 | account and I believe your Roth accounts and your HSA should all have equity in it,
00:37:07.580 | because why not take advantage of that tax-free status of those accounts?
00:37:12.100 | So that means that you need to have equity in your tax-deferred accounts to do rebalancing
00:37:18.260 | and not pay taxes.
00:37:19.980 | And if that's the case, fine.
00:37:20.980 | You know, go to your 401(k), 403(b), IRA, and if you can do some rebalancing there,
00:37:26.780 | that's fine.
00:37:27.780 | But eventually what might happen is you might end up with all fixed income in your tax-deferred
00:37:31.700 | account, all equity in your tax-free accounts, and then your taxable accounts are the only
00:37:36.980 | ones you could really rebalance.
00:37:38.660 | And you really can't do much there, except if you're doing tax-less harvesting or you're
00:37:42.860 | adding more money, then you would just use the cash to do it as best you can.
00:37:47.660 | Okay.
00:37:48.660 | Let's take a break.
00:37:49.660 | I want one more thing.
00:37:50.660 | I want to thank the three of you for making me feel like a sick old geezer for still having
00:37:54.740 | money left in their HSA.
00:37:59.060 | And on that note, I think we'll see if there are people in the audience who have questions.
00:38:02.700 | Do you want to take one of our mics?
00:38:07.300 | And then I'll hand you this one.
00:38:14.420 | Okay.
00:38:20.080 | Just one clarification.
00:38:22.260 | I'm investing, as I posted in the forum, for my mom who's near end of life, tax-less harvesting.
00:38:29.900 | When a person passes and you have existing losses, that loss gets washed out.
00:38:34.720 | So the capital, I forget which way it goes, but be careful if you're in that situation
00:38:39.540 | because those capital losses get washed out when they get passed on.
00:38:53.700 | Good morning.
00:38:54.700 | My question is around ESG investing and trying to make sense of that, get some returns.
00:39:02.140 | I've heard different opinions that it's not needed, it's not efficient, but at the same
00:39:07.220 | time I know I like to sleep at night knowing that my money is not coming from tobacco companies
00:39:11.740 | and the like.
00:39:12.860 | So I would like to hear your thoughts on the matter.
00:39:16.180 | I have strong feelings about ESG investing, but I'm going to let somebody else go first.
00:39:20.740 | Oh boy.
00:39:22.540 | Yeah.
00:39:23.540 | Okay.
00:39:24.540 | If you think about it from the point of view of equilibrium finance, just because you've
00:39:27.460 | sold the stock doesn't mean that someone else isn't going to open it, own it.
00:39:30.920 | So if half the people in the world don't want to own tobacco stocks, the other half of those
00:39:35.660 | people who do own the stocks, who the stocks get sold to, are going to be getting it at
00:39:39.580 | a bargain price and are going to be having a higher return.
00:39:42.800 | Those stocks will still be owned even if you don't, all right?
00:39:48.020 | And so a better way to do it is to own the market, own the sinful stocks, then calculate
00:39:52.260 | how much excess returns you've made from the sinful stocks and put that money into advocacy.
00:39:57.220 | That's the way to do it.
00:39:58.220 | That's another reason why ESG is kind of a scam, which is that, don't get me started,
00:40:06.900 | all right, which is that if a company gets cheap enough, it gets taken private, okay?
00:40:13.820 | So would you rather be dealing with green energy policy with ExxonMobil or with Koch
00:40:19.580 | Industries?
00:40:20.580 | All right?
00:40:21.580 | So that's the second big reason to do it.
00:40:24.020 | And then third reason is just from the investment point of view, the investment industry point
00:40:27.340 | of view, it's an enormous scam.
00:40:29.100 | There are all these different scales for using them.
00:40:31.260 | It's used as a marketing tool.
00:40:32.940 | It's a Wall Street, it's a Wall Street hop, skip, and jump.
00:40:37.740 | So if you think about, so Larry Suedro wrote a book about this, and I also interviewed
00:40:44.660 | a couple of other people on a podcast, and I thought about this as well.
00:40:49.180 | If you do not own the stock, you have no say in what the company does.
00:40:54.600 | So by doing ESG and saying, "I don't want to own ExxonMobil," you have no say and no
00:40:59.640 | vote in what happens.
00:41:04.220 | I think there are just far better ways to change the world.
00:41:08.300 | If you really care to try to stop a company that you think is bad, lead a boycott of their
00:41:13.540 | products, right?
00:41:15.100 | Strike in front of Exxon gas stations, or start a letter writing campaign, or pressure
00:41:23.540 | their sponsors, or there's just all kinds of things that are more effective than picking
00:41:29.140 | an ESG fund and patting yourself on the back and feeling good about what you're doing for
00:41:33.260 | the world.
00:41:34.260 | I just don't think it's very effective in actually changing the world.
00:41:37.940 | Yeah, and paying actively managed fees for it.
00:41:41.580 | It's just, you're far better off, just invest in all of them and donate to the charities
00:41:47.340 | that are going to change the world.
00:41:48.540 | I think you're much better off doing that.
00:41:50.300 | Yeah, I mean, I would just add a quick thought, I think ESG has become popular for two reasons.
00:41:58.220 | One, actively managed firms on Wall Street view it as their salvation, because from a
00:42:06.460 | marketing point of view, their message is indexing doesn't really work with ESG.
00:42:13.460 | You need an active manager to probe these companies to see whether they really are E
00:42:20.120 | and S and G. And of course, that's B, S. But it's good marketing, and it's very effective
00:42:30.460 | at the institutional level.
00:42:32.860 | Pension funds are very lightly indexed in ESG.
00:42:37.980 | They've decided, they and their consultants have decided that you need active management
00:42:42.860 | if you do ESG.
00:42:43.860 | So, I mean, that's the first thing you should realize.
00:42:46.300 | I mean, if you're a boglehead, because you're skeptical about active management, you should
00:42:51.260 | be really skeptical about active ESG management.
00:42:55.860 | The second thing, which to me is more personal, is I worry that ESG investing is a way of
00:43:05.620 | shifting the responsibility for making the world a better place from each of us to somebody
00:43:13.540 | else.
00:43:14.540 | I mean, I can't tell you how many times I've been in a grocery store parking lot and seen
00:43:21.540 | somebody get out of their Land Rover SUV, no offense to the Land Rover owners in the
00:43:28.940 | room, they get out of their Land Rover SUV and they leave the motor running while they
00:43:33.980 | go into the grocery store, and like a half hour later, they come out with their grocery
00:43:41.140 | cart.
00:43:42.140 | I mean, if that's you and you want to buy an ESG fund, then I have a big problem with
00:43:50.260 | that, and it's not the fund.
00:43:53.260 | Okay, my question is around market timing.
00:43:59.380 | So we're all bogleheads, and we're not supposed to market time.
00:44:02.620 | But I think generally we all love tips right now, it seems like.
00:44:06.620 | So is that market timing?
00:44:09.820 | And if it is, what could go wrong?
00:44:12.100 | What are we not seeing about tips that we should be worried about?
00:44:15.460 | I mean, I've owned tips for 16 years as 10% of my portfolio.
00:44:19.940 | I owned 10% last year, I own 10% this year, I'll own 10% next year.
00:44:23.860 | So this year has not been good to me in that particular asset class, but I don't see any
00:44:29.940 | market timing there.
00:44:30.980 | I don't change my portfolio based on the fact that tips yield 1.7% this year.
00:44:37.880 | But it sounds like Bill might, so let's give this question to him.
00:44:42.540 | Yeah, I mean, I'll repeat what I said before, which is just because you believe in the efficient
00:44:46.780 | market hypothesis doesn't mean you shouldn't be looking at expected returns, all right?
00:44:51.980 | And if an asset class has gotten particularly cheap, well, okay, I'm guilty, I'm a market
00:44:58.380 | timer.
00:44:59.900 | I knew you were.
00:45:01.340 | Those short-term bonds for the last 15 years, I knew it.
00:45:07.140 | Okay, tips are the only investment grade bond that is not included in the total bond market
00:45:14.500 | fund.
00:45:15.500 | Okay, so if you wanted to have a total, total bond market US fund, then you would have to
00:45:20.540 | include, say, 10% of your portfolio in tips anyway, just to have the market.
00:45:26.220 | Of course, you're leaving out the international bonds, if that's all you're doing.
00:45:33.300 | Well, I'm just saying.
00:45:36.020 | Yeah.
00:45:37.020 | Hi, my question has to do with buying on the dip and rebalancing.
00:45:46.860 | Is there anything wrong with rebalancing now while your equities are down twice as much
00:45:52.860 | as your bonds and putting your bonds more in the equities to buy on the dip to rebalance?
00:45:59.340 | I'm not sure which dip you're talking about.
00:46:00.660 | Are you talking about the dip in bonds or the dip in stocks?
00:46:03.380 | They're actually both.
00:46:04.780 | They're actually both, but the equities are down twice as much as the bonds.
00:46:10.100 | Double dip.
00:46:13.480 | There's nothing wrong with doing that.
00:46:15.140 | No, you're rebalancing.
00:46:17.700 | I mean, there's a lot of market timing going on in every little daily decision we make,
00:46:22.420 | right?
00:46:23.420 | Are you going to invest your monthly WAD that you have to invest today, or are you going
00:46:27.540 | to do it tomorrow?
00:46:28.700 | Every month, you got this question, and am I going to rebalance this month, or am I going
00:46:35.420 | to rebalance next month?
00:46:37.020 | You'll drive yourself crazy if you're thinking about this every time you have to make a little
00:46:41.420 | investing decision, so try to automate as much as possible.
00:46:45.020 | Try to just do it blindly as much as possible, and I think that's better behaviorally.
00:46:51.380 | Even if there are times when it is not as good mathematically, I think your behavior
00:46:55.500 | in the long run trumps the math in that respect.
00:47:00.420 | Hi.
00:47:03.860 | I'm in my mid-60s, and I'm-- No, you're not.
00:47:10.380 | Get out of here.
00:47:15.700 | I receive a pension from my career that I left some years ago.
00:47:24.420 | I work now, still part-time when I want on my own terms.
00:47:28.740 | I enjoy my work.
00:47:31.040 | I've postponed taking Social Security for a few more years, like at 70.
00:47:36.740 | I own my house outright.
00:47:38.540 | Am I an accumulator?
00:47:39.940 | Am I a retiree?
00:47:41.140 | Am I an accumulator-iree?
00:47:44.340 | Am I a retiretor?
00:47:47.420 | I'm just trying to figure out which breakout session I should be going into.
00:47:57.180 | I think we'll take that as a great reminder that it's time to wrap up this session.
00:48:04.180 | I think you raise a good point, though, that applies to everything we talk about in personal
00:48:08.980 | finance, that we are all multifaceted individuals.
00:48:14.660 | We can't put ourselves into a bucket and say, "Well, you're this or that."
00:48:19.300 | You have pieces of each of those.
00:48:22.020 | I would encourage you to look at all the sessions and figure out the particular topics or speakers
00:48:27.620 | that most seem relevant to you, and don't worry which label.
00:48:32.460 | I like the idea of coming up with new labels, and certainly an issue for people as retirement
00:48:38.860 | becomes a very different thing than it was decades ago, and people are trying to redefine
00:48:44.500 | that next episode of their life.
00:48:46.900 | Maybe you will come up with the right label for us.
00:48:50.180 | I think on that note, we're going to wrap up this session.
00:48:53.940 | Thank you to four amazing panelists.
00:48:57.380 | Thank you also to the audience.
00:49:03.860 | Your questions in this session and the previous session were amazing, thoughtful, and really
00:49:11.260 | got our panelists to say some very interesting things.
00:49:14.900 | Thank you.
00:49:15.900 | [end of transcript]
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