Economic researcher, author, and speaker Larry Swedroe joins the podcast this week. He discusses national debt, the possibility for tax changes, and how to predict and measure inflation in a more objective way. He shares what paradigm shifts investors should be considering today to protect and preserve their purchasing power going forward.

With over four decades of experience in personal finance, Larry Swedroe is the Director of Research at Buckingham Strategic Wealth, one of the nation's largest evidence-based investment firms. He is responsible for reviewing academic research on financial and investing matters and determining how that research should inform Buckingham's investment strategy. His dedication to helping others make evidence-based decisions has made him a sought-after national speaker. Larry has made appearances on national TV shows airing on NBC, CNBC, CNN, and Bloomberg Personal Finance. He has also co-authored eight books about investing. His latest work, "Your Complete Guide to a Successful & Secure Retirement," was co-authored with Kevin Grogan and published in January 2019.

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Here are a few highlights from Jared's conversation with Larry Swedroe:

  • Markets are forward-looking and don’t go up just because the economic news is good, Larry explains. The markets only go up when the news is better than expected. Only unexpected events matter because being able to forecast the economy well still doesn’t accurately predict what the markets will do.
  • A likely scenario is that due to current economic conflicts, the value of the American dollar will be lessened, which will provide a tailwind for foreign assets. Another likely scenario is that the massive deficits in the economy will potentially cause central banks across the globe to dump dollars, as they did in late 2018.
  • Jared asks Larry how the market is currently pricing inflation. The 10-year nominal yield provides a proxy for the projected percentage of inflation, he responds. Additionally, he shares what role commodities play in protecting yourself and your long-term purchasing power.
  • Being a value investor is a hedge in your portfolio against the run-up in commodity prices, Larry comments. “Throughout history, value companies have historically done well during inflationary periods,” he says. “That’s part of the reason value stocks have outperformed in the last year.”
  • Gold is an awful long-term investment that has provided zero real return for the past 2,000 years. It’s a good inflation hedge, as it tends to do well in short bursts due to inflation, but it goes through much longer periods of bad performance.
  • Larry recommends that listeners move their assets out of their estates before the changes in estate taxes take effect next year. “It might be prudent to start looking at gains now because capital gains rates are going up regardless of what’s going on,” he advises.
  • Regardless of who is in the White House, there will almost certainly be massive tax increases over the next decade. “If deficits can’t continue, then they will end; it’s only a matter of when, not if,” Larry remarks.
  • According to Larry, the four horsemen of the retirement apocalypse are: high bond prices, high valuations, aging populations, and that populations are aging longer.