The Rational Reminder Podcast

In this episode, Ben Felix and Ben Wilson tackle a wide range of listener questions covering portfolio construction, home-country bias, currency exposure, ETF selection, retirement decumulation, leasing versus buying a car, discounted cash flow valuations, and the real work of portfolio management. Along the way, they revisit the Rational Reminder model portfolios, discuss how new products like CAGE have changed the DIY investing landscape, and explore whether Warren Buffett's long-term record still provides evidence that active management can outperform.
The conversation also offers a behind-the-scenes look at PWL Capital's planning-centric approach to wealth management and why helping clients make better financial decisions often matters more than portfolio construction itself.
Key Points From This Episode:
(0:28) Why AMA episodes have become less frequent despite hundreds of listener questions waiting to be answered. 
(2:07) Ben shares observations from PWL's growing institutional investment business and why low-cost, planning-focused institutional advice remains surprisingly rare. 
(6:37) Revisiting the original Rational Reminder model portfolios and how newer products have simplified implementation. 
(10:09) Should U.S. investors underweight the U.S. market relative to global market-cap weights? 
(11:07) Research, home-country bias, and Ken French's arguments for overweighting domestic stocks. 
(18:11) Asset-allocation ETFs in retirement: Is there any benefit to separating stocks and bonds during withdrawals? 
(21:03) Leasing versus buying a vehicle, opportunity costs, depreciation, and convenience. 
(26:13) Currency exposure, RRSPs, withholding taxes, and common misconceptions about USD-denominated ETFs. 
(30:30) If Dimensional funds were unavailable, what would Ben choose instead? 
(31:26) Are there any popular ETFs investors should avoid? A look at Canada's largest ETF holdings. 
(38:28) Why discounted cash flow models often produce wildly different valuation estimates. 
(41:47) What portfolio managers at PWL actually do when they are not trying to beat the market. 
(45:57) Concentrated stock positions, client coaching, and helping investors make better long-term decisions. 
(50:02) Why financial planning questions are often portfolio management questions—and vice versa. 
(52:53) Helping clients navigate the transition from wealth accumulation to wealth preservation and spending. 
(58:06) Revisiting Berkshire Hathaway's long-term performance versus broad-market index funds. 
(1:02:35) The challenges of active management as assets under management grow larger. 
(1:04:22) Aftershow: Ben reflects on his experience appearing on Diary of a CEO with Steven Bartlett.
Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/



Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we are joined by Morley Conn, Director of Sales and Strategy, ETF Services at Scotia Global Banking and Markets, for a deep dive into the mechanics of the ETF ecosystem. With more than 30 years of experience across equities, foreign exchange, and money markets, Morley pulls back the curtain on the creation and redemption process, ETF liquidity, block trading, market making, and the often-overlooked infrastructure that allows ETFs to trade efficiently every day.
We explore how authorized participants and market makers facilitate liquidity, why ETF liquidity is driven by the underlying holdings rather than trading volume, and how large institutional ETF trades are executed. Morley also explains the differences between Canadian and U.S. ETF markets, discusses common misconceptions investors have about ETF trading, and shares practical advice for retail investors seeking better execution. This conversation offers a rare look at the operational machinery behind one of the most important innovations in modern investing.



Key Points From This Episode:
 
(0:04) Introduction to Morley Conn and his role in ETF market making.
(4:29) The key participants in the ETF ecosystem: issuers, custodians, market makers, advisors, and dealers.
(5:53) What market makers and authorized participants actually do.
(7:03) How ETF creation and redemption works and why it matters for liquidity.
(10:58) How ETF portfolio management differs from traditional mutual fund management.
(12:44) Why ETF trading volume often greatly exceeds primary-market creations and redemptions.
(13:35) The capital gains refund mechanism and its relationship to ETF trading activity.
(16:04) What happens when ETF market prices diverge from net asset value (NAV).
(18:24) Lessons from the March 2020 bond ETF dislocations and what they revealed about market pricing.
(19:16) How market makers price ETFs when underlying securities are illiquid or difficult to value.
(20:38) Managing ETF market-making risk when underlying markets are closed.
(21:35) The major factors that influence ETF bid-ask spreads.
(23:26) Why market makers prioritize trading volume and investor experience over wide spreads.
(26:45) How large ETF block trades are executed and hedged behind the scenes.
(29:26) Why ETF liquidity is determined by the underlying holdings rather than visible trading volume.
(30:43) The difference between NAV trades and at-risk trades.
(32:46) How market makers contribute to the development of new ETF products.
(34:20) Best practices for retail investors when trading ETFs.
(37:34) Factors that determine when block trades make sense.
(38:46) Why pricing ETF blocks is both an art and a science.
(43:14) What happens when an ETF is shut down and how investors are affected.
(46:22) The balance between retail and institutional participation in the Canadian ETF market.
(48:27) How institutions and retail investors use ETFs differently.
(51:23) Key differences between Canadian and U.S. ETF markets.
(54:56) ETF tax efficiency in Canada versus the United States.
(56:23) Common misconceptions investors have about ETF liquidity and assets under management.
(1:00:13) How CRM3 total cost reporting could influence ETF adoption in Canada.





Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/



Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we are joined by Ben Carlson, Director of Institutional Asset Management at Ritholtz Wealth Management and author of Risk & Reward, for a wide-ranging conversation about market history, investor psychology, and the realities of long-term investing. Ben brings his trademark blend of data-driven thinking and plainspoken storytelling to topics like market crashes, inflation, diversification, and why investors are so tempted to time the market.
We explore the lessons from Japan's historic asset bubble, the lingering impact of the Great Depression, and why diversification remains one of the few true free lunches in investing. Ben also explains the difference between volatility and risk, why the stock market is not the economy, and how investor behavior—not market performance—is often the biggest determinant of success. Along the way, we discuss inflation hedges, lost decades, speculative behavior, and the psychological challenge of staying invested through inevitable downturns.
 
Key Points From This Episode:
(0:00:20) Introducing Ben Carlson, his new book Risk & Reward, and his long-running blog A Wealth of Common Sense.
(0:03:16) Why investors shouldn't panic about investing at all-time highs.
(0:03:58) The Japanese bubble and crash as one of history's biggest market anomalies.
(0:05:39) Why Japan's long-term returns look very different when viewed over 50 years.
(0:06:27) Lessons from the Great Depression and the worst stock market crash in U.S. history.
(0:07:43) Why the best long-term returns often follow the worst crashes.
(0:08:53) The role of diversification and self-awareness in managing portfolio risk.
(0:09:55) Defining investment success by achieving personal goals—not beating benchmarks.
(0:10:42) Why inflation feels so painful psychologically for investors and households.
(0:11:42) Ben's three favorite long-term inflation hedges: human capital, housing, and stocks.
(0:13:47) Why market timing is psychologically seductive—and so difficult to execute successfully.
(0:15:00) Why handling losses is the single most important skill in investing.
(0:16:13) How devastating the economic side of the Great Depression really was.
(0:18:49) What policymakers learned from the Great Depression and 2008.
(0:20:39) The difference between recessionary and non-recessionary bear markets.
(0:21:52) Why the biggest up days and down days tend to cluster together in bear markets.
(0:23:18) Preparing for inevitable bear markets with a durable long-term plan.
(0:25:07) Why the stock market and the economy can diverge dramatically.
(0:28:10) The difference between volatility and risk—and why risk is often personal.
(0:29:37) Why comparing the stock market to a casino is fundamentally wrong.
(0:31:55) How modern investing platforms encourage speculative behavior.
(0:33:18) How extreme Japan's 1980s asset bubble became before collapsing.
(0:35:43) The most important diversification lessons from Japan's lost decades.
(0:37:39) How common "lost decades" actually are in stock market history.
(0:40:58) Three dimensions of diversification: geography, asset class, and strategy.
(0:41:53) Why there is no perfect portfolio—only the right portfolio for you.
(0:42:52) Common ways investors lose money in markets.
(0:44:03) Why investors should be skeptical of billionaire market predictions.
(0:45:57) Ben's evolving definition of success and raising good, kind children.
 
Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/



Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, Ben Felix and Braden Warwick unpack the surprisingly complex world of expected return modeling and why it matters so much for retirement projections, portfolio construction, and financial advice. They explain how PWL Capital currently estimates expected returns across asset classes, why traditional Monte Carlo methods relying on Gaussian distributions may miss important market behaviors, and how new research could improve the realism of long-term financial planning simulations.
The conversation also explores a fascinating collaboration between PWL and Columbia Engineering student John Yang, who worked with Professor Michael Robbins on a project to build more realistic synthetic return data for financial planning. John explains how his team used empirical distributions, t-copulas, and Extreme Value Theory to better capture market crashes, fat tails, and asset co-movements during periods of stress. Ben and Braden then analyze how these improved simulation methods affect financial planning outcomes, sustainable spending estimates, and projections for long-term wealth accumulation.
 
Key Points From This Episode:
(0:00:00) Introduction to expected return modeling and why it matters for financial planning. 
(0:00:25) The importance of volatility, correlations, distribution shape, and time-series behavior in portfolio projections. 
(0:01:26) How Scott Cederburg's research on block bootstrapping influenced PWL's thinking on simulations. 
(0:02:03) Introduction to Columbia Engineering student John Yang and the industry research collaboration. 
(0:03:30) How Conquest Planning allows PWL to upload custom return simulations. 
(0:04:05) A new PWL client's detailed reasoning for moving from DIY investing to working with an advisor. 
(0:06:22) Why financial planning and Monte Carlo simulations were central to the client's decision. 
(0:07:22) Cross-border financial complexity and the value of professional advice. 
(0:08:03) Estate planning, cognitive decline, and the role of trusted financial relationships. 
(0:10:02) Research on cognitive decline and its impact on financial decision-making. 
(0:12:00) Delegation, accountability, and reducing mental overhead through advisory relationships. 
(0:13:47) Why the client chose PWL specifically and the appeal of evidence-based investing. 
(0:15:25) Ben and Braden discuss the perceived disconnect between online discourse and demand for AUM advisors. 
(0:16:12) Overview of PWL's methodology for estimating expected returns across asset classes. 
(0:17:05) How PWL combines historical returns with market-implied expected returns. 
(0:18:07) The use of factor premiums and expected return composition in taxable projections. 
(0:18:48) Why PWL previously relied on Gaussian multivariate normal distributions for simulations. 
(0:19:41) Arithmetic vs. geometric mean returns and why the distinction matters. 
(0:21:01) A simple example illustrating volatility drag. 
(0:23:29) Why diversification benefits must be incorporated into expected portfolio returns. 
(0:25:15) How correcting portfolio math improved expected return estimates by 20–30 basis points. 
(0:27:12) Transition to John Yang's interview and introduction to synthetic data generation. 
(0:30:07) John explains the limitations of Gaussian return assumptions. 
(0:31:04) Why realistic sequences of returns matter for retirement planning. 
(0:32:16) Empirical evidence that returns are not truly random. 
(0:33:25) The three modeling challenges: unique asset behavior, realistic co-movement, and tail risk. 
(0:37:49) Separating marginal distributions from dependency structures in the modeling process. 
(0:38:48) Using a t-copula to better model asset co-movement during market stress. 
(0:39:39) Why historical data alone struggles to capture rare crisis events. 
(0:40:06) Applying Extreme Value Theory and Generalized Pareto Distributions to model tail risk. 
(0:42:15) How Monte Carlo simulations generate many realistic future return paths. 
(0:43:00) Imposing forward-looking expected returns and volatility assumptions onto the simulations. 
(0:44:56) How the new framework better preserves skewness and kurtosis. 
(0:46:38) Evaluating the new model using marginal shape, tail behavior, and co-movement scores. 
(0:48:10) Why the new model significantly improved tail realism without sacrificing correlations. 
(0:49:05) Future extensions including dynamic correlations and volatility clustering. 
(0:50:28) Potential future use of GANs and machine learning for synthetic financial data. 
(0:52:02) Key takeaway: financial planning requires realistic return paths, not just summary statistics. 
(0:53:41) Braden analyzes how the new simulation framework affects financial advice. 
(0:55:04) Why monthly index data produced fatter tails than long-term annual DMS data. 
(0:58:47) The new model improved Monte Carlo success rates by roughly 2–3%. 
(1:00:25) Sustainable spending estimates changed only modestly under the new simulations. 
(1:02:27) Why the improved methodology matters more for alternative asset classes. 
(1:04:25) The surprising finding that median wealth outcomes increased while mean outcomes decreased. 
(1:05:47) Why Gaussian simulations can create unrealistic runaway wealth scenarios. 
(1:07:20) The practical implications for estate planning and multi-generational wealth projections. 
(1:08:30) Why better simulation methods are especially important for concentrated and alternative investments.
 
Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
 
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we are joined by Shelly Antoniewicz, Chief Economist at the Investment Company Institute (ICI), for a data-rich exploration of the modern fund industry. Shelly walks us through the staggering scale of global regulated funds, how ETFs and mutual funds shape capital allocation, and why the rise of indexing may not be as disruptive as critics fear.
We discuss the growth of ETFs versus mutual funds, increasing concentration among large fund sponsors, and how financial advisors are reshaping portfolios around low-cost investment products. Shelly also explains why fund fees keep falling, how 401(k) plans have democratized investing for middle-class households, and why investor choice remains central to healthy capital markets. Along the way, we unpack active ETFs, intraday liquidity, interval funds, private credit exposure, and the evolving role of retail investors in financial markets.
 
Key Points From This Episode:
(0:00:00) Introducing Shelly Antoniewicz and the role of the Investment Company Institute. 
(0:01:14) The Investment Company Fact Book and why it has become a foundational resource for fund industry data. 
(0:03:31) Regulated funds globally now account for roughly $88 trillion in assets. 
(0:04:47) The U.S. market contains nearly 17,000 investment companies across mutual funds, ETFs, and related structures. 
(0:05:40) U.S. equity funds alone hold roughly $27 trillion in assets. 
(0:06:52) More than half of mutual fund and ETF assets are now in index strategies. 
(0:07:40) Why index funds still represent only a minority share of the overall U.S. stock market. 
(0:09:48) What academic research says about indexing's impact on price discovery and market efficiency. 
(0:13:10) There are nearly 770 fund sponsors in the U.S., though industry concentration continues to rise. 
(0:13:42) ETF sponsors experienced enormous inflows in 2025, with 90% receiving net new cash. 
(0:15:23) Why the largest fund complexes now control a much larger share of industry assets. 
(0:16:06) Compliance costs and regulation as drivers of industry consolidation. 
(0:17:31) Falling expense ratios as evidence that the industry remains highly competitive. 
(0:19:28) How investor flows often reflect rebalancing behavior rather than performance chasing. 
(0:22:32) Why ETF investors highly value intraday liquidity, even if most do not actively trade. 
(0:23:27) Research on ETF trading behavior among younger investors and retail participants. 
(0:27:11) The massive shift from actively managed U.S. equity mutual funds toward indexed products. 
(0:27:51) How financial advisors increasingly use model portfolios built around ETFs. 
(0:31:20) Why active ETFs exploded in popularity after the ETF rule streamlined launches. 
(0:32:31) The growing distinction between ETF wrappers and investment strategies themselves. 
(0:33:05) Leveraged and niche ETF products, investor choice, and financial education. 
(0:35:48) More than half of U.S. households now own regulated investment funds. 
(0:36:41) How 401(k) plans dramatically increased middle-class participation in capital markets. 
(0:39:16) Households remain the dominant owners of mutual fund assets. 
(0:40:28) The demographic profile of the typical mutual fund-owning household. 
(0:41:16) ETF-owning households tend to skew younger, wealthier, and more risk tolerant. 
(0:42:03) Mutual fund assets continue to grow despite persistent outflows toward ETFs. 
(0:43:39) How investor risk tolerance changes with age and market conditions. 
(0:46:22) Economies of scale and the continued decline in fund fees. 
(0:47:51) Interval funds, BDCs, and the rise of regulated private credit products. 
(0:49:36) Redemption caps and liquidity management inside interval funds. 
(0:52:51) Shelly reflects on the enduring popularity of the Investment Company Fact Book. 
(0:55:05) Shelly's definition of success: raising children who tell you they love you.
 
Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
 
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)