Active fund managers have a new explanation for years of underperformance: index funds have made their old job harder. Don and Tom examine that award-winning excuse, revisit how indexing reshaped the business, and return to the stubborn arithmetic—when active management charges more, matching the market still means losing to it after fees.
Listener questions widen the lens. A UK investor wants to move from 60/40 to 50/50 without taking needless currency risk, while a family needs a sensible plan for a $200,000 windfall, a near-term car purchase, Roth contributions, and the money left for a brokerage account.
The show closes with a federal retiree’s TSP allocation and a critique of an AI-built income portfolio stuffed with dividend funds. The throughline is simple: start with the job the money must do, favor total return over yield theater, and keep the plan easier to understand than the sales pitch.
00:33 AI jingles on demand 02:31 Active managers blame index funds 08:34 A Social Security benefit wrinkle 10:00 A UK investor moves from 60/40 to 50/50 16:11 Planning a $200,000 windfall and car purchase 20:20 A federal retiree’s TSP choices 22:59 AI builds a dividend-income portfolio 28:24 The jingle experiment continues
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