We hosted a fantastic webinar last Wednesday with Apollo Lupesco, PhD, Vice President at Dimensional Funds. Apollo has an incredible ability to contextualize the thorniest issues in investing.

Carve out an hour to watch or re-watch → Click Here.

Here are the highlights, but watch for the full experience:

• Politics and Investing

  • Politics touches on people’s core identities and triggers emotions. Successful investors acknowledge these emotions, but make pragmatic decisions rooted in data, evidence, and personal asset allocation.

  • There is no reliable indicator for stock market performance whether Democrats or Republicans are in charge.

  • Case in point, Ronald Reagan had a reputation for being business friendly and Barack Obama was known for social programs. The stock market performed identically over both eight-year presidencies.

• Artificial Intelligence (AI)

  • The closest analogy is that AI is a parrot – can repeat words but doesn’t understand context. If the input is unreliable (the internet’s information), then the output will be too.

  • For investors, AI gives further reason to believe that active stock picking will suffer. AI will make the market more efficient and identifying an information edge will be increasingly difficult.

  • It’s important to not get carried away with the frenzy. Diversify and pay attention to relative cost.

• Roger Federer

  • Federer wins 54% of the points he plays, 74% of the sets, and 81% of the matches.

  • He’s arguably the greatest tennis player of all time. If he loses a point, don’t panic! The way you win in investing isn’t by winning every day!

• Government Debt

  • The government’s interest burden (interest payments as a percentage of GDP) is actually lower today than in 1991.

  • The rate that U.S. Treasuries pay is still much lower than Apple and Ford pay. If we see that rate go up, then that may be a warning signal. But that hasn’t happened yet.