Episode summary
Ben Carlson: Investing at All-Time Highs | Rational Reminder 412
The Rational Reminder Podcast
· · Hosts: Benjamin Felix · Guests: Ben Carlson
Summary
Ben Carlson argues that investing at all-time highs is usually not a warning sign in itself: historically, returns have often been better after buying near highs than on random days. He uses the Japanese bubble and the 1929 crash to show that extreme outliers exist, but they do not invalidate long-term investing or diversification. Japan’s peak was an enormous asset bubble, yet its long-run returns look far less catastrophic once the earlier boom is included.
The conversation repeatedly returns to risk management through diversification, self-knowledge, and a plan durable enough to survive bear markets. Carlson distinguishes volatility from risk, saying the real issue is whether an investor’s willingness, need, and ability to take risk match their portfolio. He also emphasizes that investors win by meeting goals, not by beating the S&P 500, and that inflation mainly matters because it erodes purchasing power over time.
He is skeptical of market timing, analogizing the stock market to the opposite of a casino because staying invested improves the odds. The host and Carlson also stress that the stock market is not the same thing as the economy: prices move on expectations, while economic data lag and households experience inflation differently. That makes emotional discipline, not prediction, the key edge.
Key takeaways
- Carlson says buying at all-time highs is usually fine, and historical returns after highs have often been better than average over 1-, 3-, and 5-year horizons.
- Japan is a powerful outlier, but Carlson argues its bubble does not invalidate diversification because the rest of the world did not break after Japan peaked.
- Carlson says the best risk management is diversification plus understanding your own willingness, need, and ability to تحمل risk.
- He argues that investors should judge success by reaching their goals, not by beating the S&P 500.
- Inflation is mainly a long-term purchasing-power problem, and Carlson says the stock market remains the best long-run inflation hedge for most households.
- Carlson says market timing is tempting but dangerous because it requires being right twice and often leads to not getting back in.
Notable quotes
“They should be freaking out right now. No. Uh the funny thing is is that I think some investors think like the next alltime high is going to be like the high”
“I don't think that showing exceptions to the rule necessarily invalidates the rules”
“I'm of the mindset that there really are no free lunches when it comes to investing”
“I think it's how you deal with losses”
“I think the stock market is still the best long-term inflation hedge”
How the episode opens
This is the Rational Reminder podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, chief investment officer, and Dan Bordotti, portfolio manager at PWL Capital. — Welcome to episode 412. We got a good interview on this episode. Yeah, it's honestly kind of surprising that this is the first time that we've had Ben Carlson on this podcast. Uh we've kind of been creating content in parallel for years. I've read lots of his blog posts. Uh we've had Barry and Josh Barry Rholtz and Josh Brown on the podcast was great. Oh, and Nick Muli twice.
Those are all guys that are at Ben's firm Roltz. Uh Ben writes uh a wealth of common sense blog. He's also got a book of the same name.
He's got a new book out which is what we talked to him about roughly. I mean it's more like the conversation was guided by what's in the book. We didn't really talk about the book but well indirectly.
Uh the book is called Risk and Reward. It's just out from Heramman House. It was a nice read.
Uh and Ben spoke about the content very well as he always does. Uh Ben Carlson for people who do not know is the director of institutional asset management at Rholt Wealth Management. Uh he's been managing institutional portfolios for his entire career and he's also got a very popular blog that I mentioned the name of and he is the author of four books on saving investing and money.
Um yeah I don't know D what do you think of the conversation? Yeah, I think Ben is really one of a small number of financial writers out there who really I mean he backs up what he says with the data and the evidence, but he writes with a very distinctly non-academic style.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market all-time highs
- investor psychology
- diversification
- market crashes
- inflation hedges
Companies and tickers mentioned
- Ritholtz Wealth Management
Watch the episode
Watch “Ben Carlson: Investing at All-Time Highs | Rational Reminder 412” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Rational Reminder Podcast, this episode and its artwork belong to Benjamin Felix, Cameron Passmore, and Dan Bortolotti. Octagon is not affiliated with the show; this page is an independent summary.
