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Financial expert Larry Swedroe joins Joe Anderson, CFP\xae and Big Al Clopine, CPA, on YMYW podcast episode 40 to discuss active versus passive investing, comparing past performance numbers to illustrate which investment strategy has a more reliable outcome. Original publish date June 18, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro
07:07 - \u201cThe fact of the matter is, the most successful investors understand that markets will go down and they have a strategy of what they\u2019re going to do when they go down\u201d
08:16 - Start of Interview with Larry Swedroe
09:13 - \u201cLet\u2019s go over real quickly this active versus passive debate\u201d
09:36 - \u201cHe [Eugene Fama, Nobel Prize winner] defines \u2018active\u2019 as those who are engaged in individual stock selection and/or market timing\u201d
12:13 - \u201cAny decision to own any asset allocation that\u2019s different from the market is an active decision in terms of your strategy\u201d
15:06 - \u201cYou have to be prepared to accept long periods and stay the course\u201d
16:36 - \u201cThe market is getting smarter and it\u2019s getting harder to outperform the market itself\u201d
17:07 - \u201cBecause the market and investors are getting more intelligent, do you think these risk premiums would ever go away?
22:34 - \u201cIgnore the ups and downs of the market, and if anything be a rebalancer which means you\u2019re going to buy when everyone else is panic selling\u201d
27:11 - \u201cPeople\u2019s focus on dividends is a purely psychological one\u201d
31:16 - End of Interview with Larry Swedroe
33:18 - \u201cAnother way to help with the overall volatility of the portfolio is looking at the taxation of the portfolio. You have three different pools\u2026you want money in tax-free accounts, taxable accounts and tax-deferred accounts\u201d
36:51 - \u201cIf you can save more money in taxes then you can take less risk in the portfolio\u201d