Victor Haghani – The Last of the Tactical Allocators (S7E13)
Corey Hoffstein engages with Victor Haghani to delve into Victor's investment philosophy and the foundation of Elm Wealth. They explore the role of dynamic asset allocation and ETFs in modern investing, alongside client onboarding and portfolio construction. The discussion extends to expected returns, risk measures, and the simplicity versus complexity debate in investment metrics. Victor shares insights on market risk, the equity risk premium puzzle, and market efficiency debates. They also touch on private markets, benchmarking, and the challenges of expected returns. The episode wraps up with Victor's current research interests and future plans.
Key Points
- Dynamic asset allocation is guided by expected returns, risk levels, and personal risk aversion, aiming to adjust portfolios based on these factors rather than sticking to static allocations.
- Earnings yield, especially when cyclically adjusted, serves as a central metric for estimating long-term equity returns, although it must be compared to the real returns of safe assets like TIPS to gauge relative attractiveness.
- Managing risk through dynamic processes involves not only adjusting for expected return but also considering market volatility and investor sentiment, with the goal of maximizing risk-adjusted returns rather than merely focusing on absolute returns.
My guest today is Victor Haghani, founder of Elm Wealth.
Victor is, in many ways, one of the last tactical asset allocators standing after the 2010s. That might be because Victor wouldn’t categorize himself as such. Rather, he sees his dynamic index investing approach not as a tactical alternative to traditional static portfolios, but as the rational approach for anyone starting from first principles.
This conversation dances between theory and implementation. Victor is just as comfortable sharing his thoughts on where equity market risk comes from as he is defending payout-adjusted CAPE as a metric for forecasting long-run returns.
If you’re passionate about asset allocation, you’ll find lots to think about in this one.
Please enjoy my conversation with Victor Haghani.
Chapters
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| 1:19 | |
| 3:00 | |
| 9:13 | |
| 14:00 | |
| 20:12 | |
| 25:25 | |
| 32:06 | |
| 38:05 | |
| 44:33 | |
| 48:20 | |
| 51:35 | |
| 1:00:30 | |
| 1:05:05 | |
| 1:12:22 | |
| 1:13:00 | |
| 1:14:00 | |
| 1:15:00 |
Transcript
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