Rube Goldberg Investing
A chaotic day leads Don into a deep (and entertaining) dive into the futility of market timing, spurred by a recent Morningstar article on Pacer’s Trendpilot ETF. Don and Tom break down the mechanics of the fund’s strategy, its underperformance compared to a simple 60/40 portfolio, and the long-term cost of trying to avoid downturns. Listener questions bring up diversification, Roth IRAs, and the eternal struggle with ticker symbols. Plus, a special heads-up for federal employees about an upcoming webinar. And yes, kilt ventilation is discussed.
0:04 “It never rains but it pours” rant, helicopters, kilts, and chaos
2:02 Welcome and the evolution from market timing believers to skeptics
3:13 Trendpilot ETF’s moving average strategy explained (kind of)
5:45 Morningstar says: strategy failed, underperformed S&P by 5% annually
6:58 97-year 60/40 portfolio beats Trendpilot in return and volatility
8:32 2020 example: Trendpilot missed the 38% rebound—ouch
9:59 Why market timing fails most investors over time
11:05 Loss aversion vs. long-term strategy with fixed income
13:08 Trendpilot’s $3.3B in AUM—but it still doesn’t justify market timing
14:23 Listener mail: VTEB vs VTBE, Series 65 textbook gems, diversification
18:26 How much in a single stock? Almost none
19:10 Roth IRA allocation question—AVUS, DFIV, AVUV, and maybe just AVGE
22:24 One-fund to rule them all: AVGE breaks it down across 15 funds
24:11 Federal employee webinar pitch – June 7 at appellowealth.com
25:39 Wrapping up with call-in info, dreams about forgetting the phone number, and kilts (again)