Ben Carlson, CFA, author of Risk & Reward and a member of the investment committee at the wealth management firm where he works, answers questions the Bogleheads sent in from the forums and Reddit — on private equity, on what a bond portfolio should look like after 2022, on inflation hedges, and on the tax-aware strategies now being sold to people sitting on a concentrated low-basis stock position. Jon Luskin puts the community's questions to him, teaches around the edges of the answers, and closes with his own view on where those tax strategies belong.
👤 Guest: Ben Carlson, CFA, who writes A Wealth of Common Sense
🎙️ Host: Jon Luskin, CFP, financial planner
📰 Published: 30 August 2026
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 53 min | ✅ Time saved: 26 min
Key Takeaways
The book opens by refusing the premise of the question everyone asks
"Let me tell you the secret to investing. There is no secret."
Wealthy clients know there is no holy grail and ask anyway
Private equity's problem is not the fees, it is that you cannot tell how you are doing
Capital calls, distributions and marks the manager sets himself
"I think private equity is a really challenging space to be as an investor, because you don't really ever know how you're doing."
Complexity is a downturn problem, not an intellectual one
A strategy you do not understand is one you sell at the bottom instead of buying more of
Bonds stopped being a one-decision asset class in 2022
The old playbook was a total bond fund, a decent yield and a price bump as rates fell
"There were four years when stocks and bonds were both down in the same year"
The fix inside the bond sleeve is cash and short-duration TIPS, not abandoning bonds
Long-duration TIPS behave like bonds when rates rise; short ones strip that out
A bond ladder is a psychology product
It spreads reinvestment risk, but "it's not like the total savior that some people make it out to be"
The three best inflation hedges are personal-finance decisions, not portfolio ones
A good job, a 30-year fixed-rate mortgage, and stocks for the long run
"I do think a 30-year fixed rate mortgage is kind of like you're shorting the US dollar"
TIPS are the only asset that pays one-for-one for inflation
Gold works sometimes and does not work other times
Looking at your portfolio less often is a real strategy, because losses sting more than gains feel good
He updates his own portfolio values about twice a year and refuses to look during a downturn
Ignoring the noise is advice from a world that no longer exists
"it's harder than ever to actually ignore the noise today because you have these little pieces of glass in your pocket that are giving you 24/7 alerts"
His answer is to pay attention constantly until it stops registering — his colleague's Hulk analogy
Portfolios should change when your life changes, not when the headlines do
Rebalancing bands get set in advance; the market only forces a hand at the extremes
What he changed his mind about: a fun-money sleeve is a legitimate behavioral tool
"I need to take 10% of my portfolio and just go nuts because that's going to allow me to deal with the other 90%."
He tried it himself and gave it up — "I was spending 90% of my time worried about this 10% of my portfolio"
He treats factors as diversification, not as alpha
"I look at factor investing as a source of diversification."
Momentum works as a diversifier because "it acts as something of a chameleon"
Long-short direct indexing is a hedge fund sold as a tax strategy
"this is effectively a hedge fund that you're implementing"
The tax savings are mostly a deferral, and the fees are not
Luskin's own take: put tax-optimized strategies in the fun-money bucket
"The thing with any sort of tax projections is that they're just that. They're not guaranteed. But what is guaranteed? The fees."
The Book Opens by Refusing the Question Everyone Asks
Asked to read the opening lines of Risk & Reward, Carlson did it from memory: "Let me tell you the secret to investing. There is no secret."
He said the people who most want a secret are the ones who already know there is not one. Working in wealth management with wealthy individuals, he finds they understand intuitively that there is no holy grail and no easy way to do it — and then ask anyway.
On what clients are really asking for: "there has to be some wink-wink secret path here, right? There's some way to do this, right?" — all of the upside, none of the downside, sidestep the bad stuff, invest once the dust has settled
"my years of experience in this industry have just taught me that it really doesn't exist"
Luskin said he hears the same thing from do-it-yourselfers, who tell him they want high growth with no downside
Private Equity's Real Problem Is That You Never Know How You Are Doing
Carlson came up in the institutional world just as David Swensen was becoming a household name among institutional investors. Swensen's argument was that an endowment invests in perpetuity, so it can carry more risk, and he took it through illiquid investments into a space that was not yet crowded. The Yale returns were phenomenal, Carlson said, and one of the books Swensen later wrote told individual investors to index instead.
His own introduction to the asset class was as the junior member of a three-person team managing money for a billionaire family that wanted hedge funds, private equity and venture capital. He was given the job of tracking the private investments, and that is where the difficulty showed up.
The mechanics are the problem before the returns are. You do not hand the manager the money on day one — it comes due when they have an investment ready to make, and it comes back when they sell one
You may be committed for ten to twelve years before the money is actually invested, and you do not know how the fund is doing for years, because it is illiquid and because "they're kind of climbing up the marks themselves"
On the illiquidity some investors say they like: "even though it's kind of like Schrödinger's cat in a lot of ways, right? Schrödinger's portfolio, I guess"
"I think private equity is a really challenging space to be as an investor, because you don't really ever know how you're doing."
Evergreen funds built for advisors and individuals have tried to fix the operational half — you give them the money and much of it is already invested — but the underlying issue is unchanged "the illiquid nature of them and the sort of black box behind it and not understanding and knowing what you're investing in makes it way more challenging than public markets"
Luskin pointed listeners to the show's recent interview with Ben Felix on the same subject, and to a Bogleheads Conference session with Bill Bernstein, both of which he said he would link in the show notes
Complexity Is a Downturn Problem, Not an Intellectual One
Luskin said the do-it-yourselfers he works with want to build the most complicated investment plans they can, and asked Carlson to expand on what the book says about that.
Carlson traced his view to watching highly educated people with long strings of designations behave as though complex were better, and then to living through the Great Financial Crisis with them. "complex is way harder to manage during a downturn", he said, because the question a downturn forces is whether to double down on the assets that are performing worst — and that is very hard to do with something you do not understand or believe in.
The advantage of simple is that you can act on it: "it's way easier to rebalance into the pain" when you know what you own and why you own it
The failure mode of complex is the eject button — abandoning a strategy that is not working for one that sounds better and has been doing better lately "you get into this game of musical chairs when you have more complicated strategies"
Simple is not the easy option: "simple in many ways is harder because it requires you to do a lot of heavy lifting upfront" — choosing a handful of strategies, sticking with them, and accepting that other perfectly good strategies are not for you
Bonds Stopped Being a One-Decision Asset Class in 2022
Luskin opened the bond section by saying "investors are still shell-shocked from the 100-year bond flood we had", and relayed the question the community keeps asking: are bonds still a good diversifier?
Carlson answered with the record he had assembled for the book. "The average return for stocks in 26 years, these are the down years, was negative 13.5%. During those same years, bonds averaged gains of 4.3%. That's pretty good."
Then he went straight to the year that broke the pattern. "High-quality bonds were down roughly 18%. If you owned a bond index fund, that's about what it was down. Pretty much the same as the stock market." He quoted his own line back: "Diversification doesn't work all the time. There were four years when stocks and bonds were both down in the same year" — the point being that everything underperforms eventually. What made 2022 different is that the bond market was one of the reasons the stock market fell, because inflation was higher.
On the four decades that taught investors the wrong lesson: with rates in a steady decline, "bonds were a one-decision asset class" — buy government bonds, the AGG or a total bond index fund, collect a decent yield, take a price bump as yields fell
After 2022 the question changed from whether to diversify to whether to diversify within bonds
The bond sleeve now has to be set up for more than one economic environment — not just falling rates or a flight to safety in a recession, but rising rates and inflation running above the last fifteen or twenty years
The Bond Sleeve After 2022: a Total Market Fund, Cash, and Short-Duration TIPS
Luskin noted that the Bogleheads Three Fund Portfolio typically uses a total market bond fund, and asked what the alternative looks like. Carlson kept the total bond fund as the anchor and added pieces around it.
He argued it is premature to give up on bonds, because the yield is finally there. "I think I looked this week, the AGG was a yield to maturity of like 4.7%." — better, he said, than at any point in the past fifteen years, with the last twelve months the best of it
Cash earned its place back, and the reason is duration rather than yield. "there's always been this idea that cash is trash and why would you ever use it in your portfolio?" — money markets, CDs, high-yield savings accounts and T-bills carry so little interest-rate risk that they avoid the price losses bonds take when rates rise fast
The TIPS complaint from 2022 and 2023 was a duration complaint. Investors who bought a TIPS fund expecting inflation protection got a bond instead, because a fund with duration behaves like a bond when rates rise A TIPS ladder helps, and so does going shorter: "if you go more short duration in TIPS, it rips out the bond piece and gives you more of just that inflation protection" It may not raise the yield, and that is not what it is for
Floating-rate notes and private credit are now available to bond investors who were shut out of them before, but he came back to the same conclusion he reaches on the equity side — the simpler approaches help here too
Luskin pointed listeners to the show's Bill Bengen interview on the role of cash, and to a Bogleheads Conference presentation on building a TIPS ladder
A Bond Ladder Is a Behavioral Tool, Not a Savior
A forum question from a user named Chicagoprof asked about ladders versus bond funds. Carlson said he had written a blog post on it years ago and got more feedback than almost anything else he has written, because people hold strong views here.
The case for individual bonds is psychological, and he grants that it is real: a fund can fall in price, but a bond held to maturity comes back at par. The catch is that it is the same trick illiquidity plays in private equity — a bond fund is simply a fund of individual bonds targeting a maturity, duration or credit quality. If rates rise, your laddered bonds are still costing you the higher rate you could have got in the market.
Where a ladder genuinely helps is reinvestment. "You're spreading your interest rate bets, sometimes higher, sometimes lower when they mature and if you reinvest." — dollar cost averaging, applied to interest rates
You do not need individual bonds to do it. A maturity profile can be built out of mutual funds or ETFs, and target maturity ETFs already exist
"I think the biggest benefit to a ladder for most people is just the psychology behind it" — not having to watch the price fall, even though the price of the individual bonds is falling too
"So I think that's more of a behavioral tool than anything. And maybe it does help with interest rate risk a little bit, but it's not like the total savior that some people make it out to be."
He closed the topic with a joke aimed at the host: "any hate mail on individual bonds versus bond funds, send them to Jon, not me" — to which Luskin suggested the YouTube comments instead
The Three Best Inflation Hedges Are a Job, a Mortgage and Stocks
Carlson said inflation is the topic people had least experience with, because four decades of tame prices — one to two percent a year coming out of the Great Financial Crisis — ended in an inflation rate of nine percent. He wrote about it because he thinks people go looking for the wrong kind of answer: the perfect portfolio hedge, gold or Bitcoin or TIPS. His three are household decisions.
A good job. "the best inflation hedges are a good job where you can hopefully increase your salary at or above the rate of inflation" — and being desirable enough to an employer to get it
A 30-year fixed-rate mortgage, which he framed as a position rather than a product. "I do think a 30-year fixed rate mortgage is kind of like you're shorting the US dollar" — cash buried in the backyard loses to inflation, so a fixed payment is a bet the dollar falls He noted that Europe and Canada lean on adjustable-rate mortgages, where rising rates crank the monthly payment up instead He said the number he uses in the book is that at a 3% inflation rate the value of a dollar is cut in half in 20-plus years, something like 22
Stocks for the long run. High or rising inflation can hurt equities in the short run, as it did in 2022, "but in the long term, the stock market still remains your best bet to beat inflation" "the number of the past 100 years is in the 6 to 7% range of real returns for stocks" — above inflation, and better than bonds, cash or anything else
Luskin added a fourth for people already retired: delaying Social Security, because the larger benefit itself rises with inflation
TIPS Are the Only Asset That Pays One-for-One for Inflation
Asked whether an investor holding stocks still needs TIPS, Carlson made the case that TIPS are technically a bond but function as something closer to an alternative asset class.
"There's no asset class that really gives you a one-to-one for inflation like TIPS do." — gold works against inflation sometimes and does not work other times
With nominal yields above roughly 2%, where he said they are today, he called it good value
The argument is the uniqueness rather than the yield: it is a form of diversification an investor cannot get anywhere else
Timing the Bond Market Only Pays at the Extremes
Luskin pushed on the implication — if TIPS look good now, does a long-term investor act on that? Carlson said it depends how much of a bond fund manager you want to be, and framed the decision the way his firm's investment committee does: what risk are you being paid to take right now, and what does the reward look like.
He accepts there are moments when TIPS make more sense than others. Negative TIPS yields in the early 2020s were simply not a good investment, and that is part of why they struggled
The bond sleeve is supposed to be boring. Take volatility where you are paid for it, which to him is the stock market
"trying to squeeze a little bit more juice out of the bond market and trying to time these things by jumping in and jumping out, it sounds interesting, but it's probably only helpful at the extremes"
His example of an actual extreme: the pandemic, when the whole Treasury yield curve sat at 1% or lower. Taking duration there made no sense, because any rise in yields would crush it — which is what happened "I don't think anyone was predicting that the Fed was going to take yields from 0% to 5% in that short of a timeframe" The asymmetry was the whole argument: a little more toothpaste out of the tube if yields kept falling, a crushing if they rose
Why Looking at Your Portfolio Less Often Is a Real Strategy
Luskin asked him to read another line from the book: "The more frequently you look at your portfolio, the more likely you are to experience a sting from loss aversion since losses are more frequent in the short term." Carlson said he titled loss aversion the most important concept in all of finance.
He explained it the way he explains it to his children, using their favorite sports teams — a win feels good, a loss feels worse, and his daughter had no trouble telling him which one she felt more.
The arithmetic underneath it is that short-run outcomes are close to a coin flip. "the stock market is up like 53 or 54% of the time" on a daily basis, with the odds improving the further out you go
The number from the book that makes the point: "since 1950, 7% of all trading days are all-time highs", and "93% of the time you're kind of looking up at an all-time high from a drawdown" Not always a large drawdown, but enough that anchoring to the high means seeing a loss most of the time
He applies it to himself. He updates his portfolio values maybe once every six months, and thinks twelve would be better "I have this thing where I will not look at my account statements or my portfolio values when we're in a downturn" — he does not think seeing the lower number helps him Putting space between yourself and the feeling is the point, because everyone has the feeling
Ignoring the Noise Is Advice From a World That No Longer Exists
Luskin drew the contrast directly: the book is evergreen and long-term, while Animal Spirits is timely and spends its time on things like IBM losing 23% in a day. How does he hold both?
Carlson started by attacking the cliché. Every financial advisor tells clients to ignore the noise — "I think you get your CFP and they hand you a plaque that says this phrase on it" — and it is good-sounding advice that has become impossible to follow. "it's harder than ever to actually ignore the noise today because you have these little pieces of glass in your pocket that are giving you 24/7 alerts", he said.
The comparison that shows how much changed: a reader who lived through the 1987 crash emailed him — "I didn't know it happened until I was driving home and I turned the radio on. And then they tell me that the stock market fell 20% and we might go into a depression."
His answer is not abstinence but filtering: "you have to have good filters in place", sorting what is useful from what is merely interesting
He also admits the selfish reason he follows markets — he thinks they are one of the most interesting case studies in human nature there is, because people are the ones controlling it
The analogy he borrows from his colleague Josh Brown is the Hulk's answer when asked how he learned to control his rage: "Well, the thing is, I'm just angry all the time." Constant attention is what makes him immune to it. Fifteen years of hearing that this is the next crisis and this is the bubble ends, he said, like the boy who cried wolf
The people who get hurt are the intermittent watchers, who tune in only when there is smoke and conclude they have to do something
Portfolios Should Change When Your Life Changes, Not When the Headlines Do
Asked to distinguish when a long-term investor should and should not be paying attention, Carlson said the market forces your hand only at the extremes, and that for most people the trigger is personal rather than financial.
He called it one of the misnomers of portfolio management that people plan to act at a valuation level. Rebalancing bands and guidelines should be set in advance and then allowed to run
"the time you really have to make portfolio changes is when your life changes" — spending more, spending less, saving more so you can take more risk, saving less so you have to take less
"do you want to make wholesale portfolio changes because of what's in the headlines? No, I think that's a huge mistake."
Luskin agreed and listed the life events he sees: approaching retirement and wanting less risk, or a windfall from selling a business or an inheritance that allows more
What He Changed His Mind About: a Fun-Money Sleeve Is a Legitimate Tool
A Reddit question from a user named DiegoMilan noted that JL Collins, a US-only investor, had recently changed his mind and added international, and asked Carlson what he had changed his own mind about.
He started from where he began — John Bogle's example, index funds making immediate sense to him, and a day job full of active managers struggling to beat the market. What years of working with investors of every size changed was his view of how many right answers there are.
"there really isn't one way to succeed in investing. But I think that there are just a small number of ways to fail in investing." Not everyone has to invest the same way
Some people genuinely are "spreadsheet warriors and robots" — the Spock investor who sets an allocation, rebalances occasionally, sits on their hands through a crash and is more or less hardwired for it
Others need a release valve, and this is the part he used to argue against: "I need to take 10% of my portfolio and just go nuts because that's going to allow me to deal with the other 90%." Stock picking, tactical trading, crypto, whatever scratches the itch He now thinks that works, borrowing a phrase for it: "the idea of sinning a little bit, to steal a phrase from Cliff Asness" — provided you understand your lesser self and size the position properly The failure is size, not activity. Take too much risk in too big a chunk and it stops being a release valve
Luskin's reservation about the cowboy account: "it has you pay attention more to what the markets are doing with that 5%, and then that may impact how you treat the rest of your money"
Carlson has run the experiment on himself, with 10% of his portfolio in individual stocks. It showed him how hard stock picking is and that he underperformed his own index funds — and then it showed him something worse "I was spending 90% of my time worried about this 10% of my portfolio", checking it constantly, watching for an earnings release that could move a position 20% in either direction He stopped because it was not worth the attention, and says he hopes young investors do the same thing with small amounts, "maybe pay some tuition to the market gods", and come out the other side
His Favorite Charts Show a Decade of Drawdowns and a Market That Rose Anyway
A Reddit question from a user named buffinita asked for his favorite charts on passive investing and market timing. His answer was the drawdown record of this decade, laid against what the market did anyway.
The drawdowns he listed: 35% in COVID, a bear market in 2022 with "the S&P was down 25%. The Nasdaq was down 35%", and almost another 20% on Liberation Day
"And yet this decade, the stock market is up 15% per year"
Overlaying the economic data makes it stranger, not clearer: "the unemployment rate went to 14% while the stock market was bottoming and already moving up"
Why waiting for the dust to settle fails: "when this stuff is in the headlines, it's already too late". The market moves before the data does, and it is not always right — but it is usually early
He said COVID was the clearest lesson: terrible headlines, worsening numbers, a rising market, and investors insisting it made no sense
His second chart is a colleague's. Michael Batnick's Reasons to Sell plots the market's rise against everything bad that happened along the way The asymmetry underneath it: "the good news is more like a process and not an event. But the bad news is an event. It's a headline." Good news accumulates over years and never gets a headline
Given every headline of this decade in advance — the pandemic, nine percent inflation, tariffs, wars — he said he would have been completely wrong about the market's reaction to all of them
Luskin added the point that the good news is corporate profits and economic growth, which is where the returns come from, and flagged buffinita's own chart on low correlation not being inverse correlation
Factors as Diversification, Not Alpha — and Why Momentum Acts Like a Chameleon
A forum question from a user named jocdoc asked about "the Porterhouse portfolio". Carlson described it as "a momentum strategy. It's totally rules-based." and used it to explain how he thinks about the active component of client portfolios.
His argument is that index funds are not special in themselves. What is valuable is the set of properties they happen to have — rules-based, long-term, tax-efficient, low turnover — and those properties can be applied to other strategies. Rules-based is the one he cares most about, because deciding in advance is what keeps the lesser self out of the process.
He rejects the standard sales pitch for factors. "I don't look at them as a source of alpha" — advisors have long used small-cap value that way, but he thinks factor returns are too cyclical for it
"I look at factor investing as a source of diversification." If part of the portfolio is going to lag, another part should be positioned to pick it up
The experience behind that view is the lost decade for the S&P 500 and a Vanguard Total Stock Market Index Fund at the start of the century, when diversification saved you — followed by fifteen years in which VOO or VTI would have been the better answer
Momentum is the awkward factor to explain. Value is intuitive — buying a dollar for fifty or sixty cents, Warren Buffett, Benjamin Graham — while momentum is behavioral, driven by herding and recency, with more turnover It is not a tech bet. "it acts as something of a chameleon", picking up whatever is working, which could be dividend stocks or consumer staples or any sector
Why rules-based matters for the manager as well as the investor: "no index fund has ever closed because the portfolio manager is getting a divorce and wants to spend more time with their family", which he noted happens to hedge funds constantly
The strategy is offered as a lever rather than a default — core models for every client, and additional options for those who want something more concentrated. Some clients decline it, which he said is fine
Long-Short Direct Indexing Is a Hedge Fund Aimed at After-Tax Alpha
Luskin raised direct indexing with tax-loss harvesting, and the newer long-short factor version of it. Carlson said the demand is coming from clients rather than advisors, and described who those clients are: people who bought Nvidia or Tesla or Apple years ago, or took stock options from an employer like Google, and now hold a very low basis and a very large capital gains bill.
They know what they should do, he said, and they cannot make themselves do it. "You concentrate to get rich. You diversify to stay rich."
Zero commissions made direct indexing possible — buying the individual stocks rather than the fund so losses can be harvested
Harvesting has a ceiling in a bull market, because not enough stocks fall. "I think the average in a given year is something like, even if the stock market is up, 30% of stocks on average will fall in a given year." Eventually you run out of losses
The workaround is leverage. "we're going to open a margin account and we're going to do a 130-30 fund where we borrow money, we tack on an additional 30% long strategies, but then we offset that with shorting 30% of stocks on the other side" — still 100% net long, with far more positions to harvest against His firm works with Canvas as a direct indexing platform, and with AQR
He is blunt about what it is. "this is effectively a hedge fund that you're implementing", and "I also think this is not the kind of strategy that you can implement yourself as a DIYer just yet"
The demand traces to a shift in where investors look for an edge. Having accepted that stock picking will not produce alpha, "I'm going to find after-tax alpha." is where a lot of people landed "everyone knows the only returns that matter are your net returns after all fees and after all taxes"
It is situational, he said — a large capital gain from selling a business, a property or a concentrated low-basis stock position — and hard to see as a baseline strategy
The Downsides: Fees, Leverage, and a Tax Bill You Are Only Deferring
Asked when the strategy is not a fit, Carlson listed the objections in order.
Complexity is the first filter, and for some people shorting and leverage are an immediate no
Execution requires the right investment manager, not just the right advisor, because the positions have to be managed against a tracking-error budget and a target for how much to harvest each year
Fees can eat the benefit. Some managers charge a great deal for this, and the question is whether the tax savings are worth what you pay for them Leverage varies widely between managers — he mentioned 130-30, and said others run 200 or "a 250-50 or something", with hedge-fund-style fees to match
The taxes are mostly deferred, not avoided. "it's not like you're totally getting rid of the taxes" — you get diversification and a longer runway for compounding, and the bill still arrives There is also lock-in: selling out down the line defeats the point, so you may be stuck in the strategy for years
How to judge the trade: run the numbers year by year, mapping how much can be harvested in year one, year two and year three, against the fees Much of it depends on the market — a bear market produces far more losses to harvest — so it cannot all be planned in advance and needs an ongoing conversation about turning the dial up or down
The counter-argument comes from his firm's tax expert: "It's painful to pay taxes, but guess what? It also means you did something right and you won the game." Some clients simply pay and move on, and he said that is fine too
Three Words on the Way Out
Luskin said he would see Carlson at this year's Bogleheads Conference, which will be his first, and asked for a final thought. He gave the line he writes when he signs copies of his book: "Less is more."
Luskin's Closing Take: Most Spreadsheet Warriors Do Not Maintain the Spreadsheet
The host closed the episode with his own reactions to two parts of the conversation.
On the spreadsheet warriors: "a lot of people think they're spreadsheet warriors and they create a spreadsheet and they create a plan, but then they don't maintain it". His advice is a plan that needs less maintenance, because that is what raises the odds of sticking to it
On the tax-aware strategies: he understands the pain point, but the asymmetry bothers him. "The thing with any sort of tax projections is that they're just that. They're not guaranteed. But what is guaranteed? The fees." His own framing is to treat them as speculation: "I would put any sort of tax optimization investment strategy like long-short direct indexing, tax loss harvesting into a sort of a fun money bucket" — money he would be fine losing to underperformance or to fees eating the savings He said going in with that framework is what helps someone decide whether one of these strategies actually makes sense for them
Carlson's bottom line is that there is no secret and no single right portfolio — only a small number of ways to fail — so the work is choosing something simple enough that you will still be holding it when it stops working.
Products, Companies & Tools Mentioned
Yale Endowment Fund and David Swensen (The template for institutional illiquidity; Carlson credits the returns to going where the crowd was not, and notes Swensen told individual investors to index)
The AGG and total bond market index funds (The anchor of the bond sleeve; he cited a yield to maturity of about 4.7% the week of the interview)
TIPS, TIPS ladders and short-duration TIPS funds (The only asset he says pays one-for-one for inflation; short duration strips out the bond behavior that hurt TIPS holders in 2022)
T-bills, money markets, CDs and high-yield savings accounts (The cash sleeve he says earned its place back, because short yields carry almost no interest-rate risk)
Target maturity ETFs, floating-rate notes and private credit (Newer options inside the bond market; he still prefers the simpler approaches)
Evergreen private equity funds (Built for advisors and individuals to fix the capital-call problem; the black box remains)
S&P 500, Nasdaq and Vanguard Total Stock Market Index Fund, VOO and VTI (The drawdown chart he likes, and the lost decade that taught him to diversify — followed by fifteen years when the index would have won)
Nvidia, Tesla, Apple and Google (The concentrated, low-basis positions that send people to direct indexing rather than to a taxable sale)
Canvas and AQR (The direct indexing platforms his firm works with, including the long-short versions)
130-30 and higher-leverage long-short funds (Margin plus shorting to create more positions to harvest losses against; he calls it effectively a hedge fund)
IBM (Luskin's example of the kind of single-day move Animal Spirits covers)
Gold and Bitcoin (The portfolio hedges people reach for on inflation; he says gold works sometimes and not other times, and prefers household hedges)
Social Security (Luskin's inflation hedge for people already retired — delay it and the larger benefit rises with inflation)
Books & Resources Mentioned
Risk & Reward – Ben Carlson (The book the interview is built around; the source of the loss-aversion line, the down-year return record, and the inflation-hedge chapter)
A Wealth of Common Sense – Ben Carlson (His blog; Luskin says he sends people the post on bond funds versus individual bonds rather than answering the question himself)
Owning Individual Bonds vs. Owning a Bond Fund (That post, from the episode's own show notes)
The Animal Spirits Podcast (His co-hosted show, the timely counterweight to the book's long horizon)
Reasons to Sell – Michael Batnick (A chart plotting the market's rise against every bad headline along the way)
David Swensen's books (He wrote a couple; one of them told individual investors to index)
Ben Felix on Simplicity, Private Equity, Factor Investing, & Living a Good Life: Bogleheads on Investing Episode 95 (Luskin's pointer for more on private equity)
Financial Historian Mark Higgins in Fireside Chat with Bill Bernstein (The Bogleheads Conference session Luskin said he would link)
You Can Spend More in Retirement with Bill Bengen: Bogleheads on Investing Episode 92 (Recommended for the role cash plays in a portfolio)
TIPS Ladders with Kevin Esler (The conference presentation on building a TIPS ladder)
Bogleheads Live with J.L. Collins: Episode 19 (Collins came up in the community question about changing your mind)
2025 Bogleheads Conference Recordings (Where the conference sessions referenced in the episode live)
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