Who Should Invest in (Cap Weighted) Index Funds? | Rational Reminder 227

In today’s episode, we pull relevant quotes from past guests (namely John Cochrane, Gene Fama, and Jonathan Berk) to extricate who should own market cap funds. We look at the variable risks of value stocks and factor investing and hear counter-views on owning the market. We also delve into the hot topic of tax loss selling, with an overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. This episode will get you up to date on the biggest finance news of the week, from crypto collapses to Amazon’s catapulting gains and losses. Tune in to hear all of this and more, including a recap of our conversation with Dave Goetsch and our Financial Literacy Month book reviews.

Timestamps:
0:00 Intro
8:51 Main Topic: Who Should Invest in Market Cap Weighted Index Funds?
11:42 CAPM
14:21 ICAPM
18:48 Average Investor Theorem
26:56 Empirical Multifactor Asset Pricing Models
35:10 Practical Challenges
41:30 Who Should Invest in Total Market Index Funds?
45:07 News
53:00 Tax-Loss Harvesting: An Individual Investor’s Perspective
1:04:54 6 Book Reviews for FinLit Month
1:11:50 1 Episode. 60 seconds
1:13:34 Podcast feedback

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Books From Today’s Episode:
The Geometry of Wealth — https://amzn.to/3Od9J3N
Retirement Income for Life — https://amzn.to/3GpkHRN
We're Talking Millions! — https://amzn.to/3UI3uaE
Common Sense on Mutual Funds — https://amzn.to/3AjUsIM
The Investment Answer — https://amzn.to/3UWeSPM
Money Like You Mean It: Personal Finance Tactics for the Real World — https://amzn.to/3g9bT7Q

Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/
Shop Merch — https://shop.rationalreminder.ca/
Join the Community — https://community.rationalreminder.ca/
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'An Intertemporal Capital Asset Pricing Model' — https://www.jstor.org/stable/1913811
'Risk and Return of Value Stocks' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=112553
'The Value Premium' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=351060
'A Consumption-Based Explanation of Expected Stock Returns' — https://repository.upenn.edu/cgi/viewcontent.cgi?article=1146&context=fnce_papers
'Who Are the Value and Growth Investors?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426823
'Is There a Replication Crisis in Finance?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3774514
'Amazon Becomes World’s First Public Company to Lose $1 Trillion in Market Value' — https://www.bloomberg.com/news/articles/2022-11-09/amazon-hits-unwelcome-milestone-with-1-trillion-in-value-lost?leadSource=uverify%20wall