Nobody Knows Nothing

Why is financial forecasting so persuasive when its track record is so poor? Don and Tom open the Book of Financial Physics to Law No. 6—“Nobody Knows Nothing”—and explain why stock pickers, market timers, and highly paid pundits cannot reliably tell you what comes next.

Then they answer listener questions about permanent life insurance and deferred income annuities, trusted contacts and two-factor authentication, and whether a wealthy client can copy an advisor’s portfolio while paying for advice on only part of the assets.

Finally, they simplify a 529 allocation for a three-year-old and detour through vacation smoke, Disneyland prices, and the value of ignoring suspicious messages.

00:39 The sixth law of financial physics
01:48 Nobody Knows Nothing
04:19 The real cost of active management
05:14 What prediction makes investors miss
07:00 Active funds lose market share
10:22 Pundit performance versus the index
12:00 Send in your questions
13:27 Permanent life insurance and deferred annuities
17:36 Securing investment accounts
21:02 Why trusted contacts matter
22:14 AUM fees and copying a portfolio
25:45 The simple 529 allocation
28:24 Smoke, Disneyland, and family vacation

Questions? Comments? Click!