Fact or Fiction: Inflation, Taxes and the End of the Star Manager Era

Fact or Fiction: Inflation, Taxes and the End of the Star Manager Era

In this episode of Two Quants and a Financial Planner, we return to our Fact of Fiction framework. We cover a diverse set of investing and financial planning topics that are on many investors' minds. We debate whether inflation can truly be predicted, if legendary investment managers are a thing of the past in today's market environment, and how much emphasis to place on fees and taxes when constructing an investment strategy. Additionally, we dig into the question of whether your house should be considered part of your overall investment portfolio and have some discussion on the age-old question of whether avoiding small purchases, like a daily $4 coffee, can really have a meaningful impact on your long-term wealth.

00:00 Introduction
00:48 Can inflation be predicted?
06:15 Are we in an era of higher inflation for longer?
09:29 Thoughtful ways to consider inflation in your investment strategy
12:41 Can you name one legendary active investment manager today (besides Buffett)?
16:50 The era of the "legendary investment manager" is likely over
19:34 Should you use different investment strategies in different market regimes?
22:14 Most investors should pick one approach that works across regimes
26:05 Should taxes be a primary driver of your investment strategy?
29:48 Taxes should be a key consideration, but not the only driver
33:20 Should fees be a primary driver of your investment strategy?
37:51 Why do high-fee S&P 500 funds still exist in 401(k) plans?
40:37 Fees should be a major consideration, but not the only factor
42:18 Should your house be considered part of your investment portfolio?
48:56 Your house is a unique hybrid of a consumption and investment asset
52:34 Does avoiding a $4 daily coffee have significant investment implications?
56:34 Small purchases are fine if you can afford them; don't use coffee to shame people

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