Roger G. Ibbotson

Once you are persistently saving and avoiding the fee traps, you have to determine your asset allocation.

The research cites a landmark study by researcher Roger Ibbotson, who mathematically proved that over ninety percent of an investor's total return variance is determined strictly by their high-level asset allocation, what percentage is allocated to domestic stocks, international stocks, bonds and real estate, and not by the specific individual stocks they attempt to pick.

Asset allocation is the primary driver of outcomes.

The research provides five asset allocation principles to guide this structural decision.

And then we got into the conversation about the fixed index annuity.

And you've got a Yale professor we're going to talk about, renowned economist, Robert Ibbotson.

You saw this.

You wanted to discuss it.

But if you serve me a dish that I'm really liking, I'm really happy, right? So there's different strokes for different folks.

And what we're talking about today is the fixed index annuity, a product that lets you participate in the market gain if it's up and never lose when it goes down.

And that, it turns out, according to Roger Ibbotson, is actually a better alternative for your portfolio than the bond piece.

We were talking last segment about how most of us have been losing money in bonds.

So kind of right there kind of gives you a pretty vast longitudinal study on, okay, the smallest segment outperforms over a long period of time.

when you layer on some other white papers and some other research, you know, such as the work that Roger Ibbotson did, he was a Yale finance professor that he used to put out every year, would update his white paper.

And what he looked at was illiquidity as a factor to outperformance.

And he looked at all stocks in the U.S. since 1970 up until I think 2017 or 18, up until he stopped publicly updating his white paper.

What's up, everybody? My guest today built the numbers, the entire industry quotes for long-term returns, data going back to 1926.

My guest is none other than Roger Ibbotson, finance professor at Yale Bulldogs, for four decades, founder of Ibbotson Associates, chairman of Zebra Capital.

Roger, welcome to the show.

Great to be here.