The State of Retirement Research | #419 (Jean-Pierre Aubry)

25:18And so they slowly shifted from basically being in not just treasuries, but mostly municipal bonds to starting to allocate more towards equities, with the thought being that it would be cheaper. You can grow your pile faster with less money and still provide the benefits to retirees that you're promising. And that, on the whole, worked out pretty well, I would say. Republic plans did exactly what they thought. Their pile grew. And by the 2000s, they had trillions of dollars in aggregate in the markets saved to pay retirees benefits. You know, cops, teachers, police officers, DMV workers. And so starting in the 2000s, though, we had a series of downturns.

26:02Dotcom bust in 2002, global financial crisis in 2008 and 2009, blip in COVID. And so those bumps really changed how public plans started thinking about stocks in particular. What happened essentially is they shifted away from vanilla stocks and bonds, which they've done well by up until 2000. and started shifting towards alternatives. Alternatives are basically private equity, more real estate, private, generally, commodities. I think primarily one of the initial favorites was hedge funds, which are basically more analogous to stocks, but just taking bets. The stocks will go down. It's just a little bit more of a taking bets on stocks.

26:45And that part has not turned out well. Our research has shown continually that that transition, when you look at public plans, those who have made more significant shifts away from stocks, vanilla stocks and bonds, towards these alternatives, have underperformed the others. In particular, those that made shifts after the global financial crisis, which is when a lot of plans said, whoa, stocks are scary. They had seen other plans who had dipped their toe earlier do pretty well because these markets were nascent. They were underdeveloped, so there were still opportunities. But they jumped in, you know, when the, towards the tail end, I think, or tailor end of these trends, they said they jumped in after 2009.

27:26It really underperformed peers. And we've looked at plans against other plans. We've looked at state and local plans in aggregate against the basic index fund, which is our most recent research. And it's all ways come up the same, that it hasn't worked. They said it has worked. The gains have just been minimal. Public plans are in a position where they have to really defend why it's worth all the trouble to make its transition. These asset classes are opaque. They're difficult to explain. And they're in a political economy where transparency is king. They aren't nimble investors. They can't jump in and jump out of opportunities because, again, transparency is king.

28:08So to decide they want to make an allocation shift, they have to have five board meetings over the course of a year. By the time they make the leap, whatever they saw a year ago is no longer an opportunity. And so they just aren't, I think, well suited for this kind of nimble institutional investor game because they really aren't well suited to turn on a dime given market trends. That's kind of the story of public plans. So, you know, the shift to equities worked out pretty well since 2000. the shift away from stocks towards alternatives has not been as fruitful and has also come with lots of headaches politically for public plan investors trying to explain what's going on because they're just such a different animal and oftentimes pretty opaque.

28:55And fees have gone up and liquidity has gone down. And when we study public plans, we actually give them a lot of credit for the things they've done rights to the global financial crisis in terms of like, there were lots of benefit increases in the early 2000s when the pie was growing after the 80s and 90s and stock run-ups. And so they've kind of curtailed the system of some of the excesses of that period. They've really tried to rectify how they fund the system. They're more conservative in how they fund and their assumptions and their benefits. In terms of asset allocation, from what I can tell, they're just actually doubling down on this approach of shifting to alternatives.

29:33And actually, recent research not done by my CRR, but used our database, the public plans database. Researchers are coming out of Harvard and I think USC. They were asking the same question, like, what's driving this transition? Because a lot of it is going from stocks to alternatives, not even getting out of bonds is one more risk, but changing your risk profile. And to do that, you have to have some really strong beliefs that like these other things are better than stocks. That's why you'd shift. And what's driving that belief? and they provide evidence that's primarily consultants, essentially.

30:08Yeah, I've seen that paper. It's consultants, and I think is peer effects another big one in that paper? Peer effects, too, yeah. Anecdotally, I think that rings true. I mean, our system is set up where board members are not experts. They're representatives of factions, and they rely heavily on outside expertise for all the decisions. Actuarially, I think if you're looking towards for any of the whys around what public plans are doing in particular. It's around the professional consultants and service providers they have, because they rarely push back. I don't have the expertise to push back. It's the same as individuals.

30:45It's like that same dynamic, but you're putting trust in them. So it is what it is. Warren Buffett's talked about that conflict with consultants for a long time now, where consultants won't command the fees that they do if they just come in and tell you to buy index funds. Yeah. So there's that funny conflict there. We are going to ask more about the public plans versus index funds research, but have you also found that public plans with higher allocations to alternatives have performed worse than public plans with lower allocations? Before we did this index analysis, we had done two papers that looked at the shifts in alternatives and always looking just within public plans.

31:22So looking relative to each other, you know, who's done better or worse based on their allocation. And what we found was those that had higher allocations to and mostly to private equity hedge funds, commodities underperformed their peers. The real driver of that was hedge funds and commodities, to be honest. Private equity basically held its own. But hedge funds and commodities were really drags on public plan performance. And again, in particular, in terms of private equity, prior to the global financial crisis, plans that went into private equity outperformed after the global financial crisis.

32:06They underperformed. So on the whole, it's a wash for private equity. For the other asset classes, they just were basically a net negative. Can you talk about the approach you took to evaluating the performance of the pension funds relative to index funds? We had to create a benchmark. We were looking at the performance of pension funds relative to indexes. We had to figure out what index are we talking about? What do we mean in terms of index funds? And so we wanted something that was somewhat representative of overall what public plans are trying to do, because we're kind of trying to present an alternative approach to see if they're doing better than that or not.

32:46At the same time, we wanted something that was salient and understandable by the public. I mean, the point of our research is for it to be accessible. So I think the tried and true simple 60-40 allocation for stock index and bond index was kind of fit the bills, what we're looking for. Some can argue that that's not really the risk profile or the intended risk profile of pension funds, that it might be more like 70-30. and maybe you want to put in some international stocks in there, index international stocks to really kind of map what a passive index approach for public pensions would look like in aggregate and compare.

33:26But you can quibble about exactly. But 60-40 was salient and it's hard to argue with as kind of an alternative when you're saying, has all this fancy stuff public plans have been doing, using my hands here, is that really done anything for you? That's what we wanted the readers to lead with. And I think when you do the other types of index allocations, you still get essentially the same story. It may not be as significant like the differences, but you still get the same story that public plans underperform relative to this index approach. But we don't want to get too caught in that world of trying to match what they're doing too much.

34:02So we look at this 60-40, basically the Wilshire 5000 on the stock side and Barclays Ag Index on the bond side. 60-40, track that over time. Pretty straightforward. On the pension side, we have their actual returns, how they've actually performed year over year for about 250 pension funds in our sample. Clearly, that's not all the cities and towns in America, but it actually is 95 % of all the pension fund assets and 95 % of all public sector workers are in these plans. So everything we've left out, all that little tail, they don't add up to much. There are definitely states with a bunch of small towns that have their own little pension.

34:45And that's a different analysis that might be interesting to see how these very small plans do. But this is where everybody is, where all the money is. And when we look at how these larger public plans have performed throughout the index, no matter how we cut it, they underperformed. I think one thing we're trying to do is really look at this many different ways in terms of the time periods. I think that's one knock people always have because of analysis. Well, if you're looking from 2009 to 2018, of course you're going to see this. If you're looking from 2001 to 2008, of course you're going to see this.

35:18There's always this idea that you're cherry picking your time period, right, for the point you're trying to make. So we wanted to avoid that. And so we did rolling periods of five and 10 years from 2001 to 2018. So we kind of got 2001, 2005, 2002 to 2007, 2003 to 2008. And we kept doing that. So you get kind of all these five-year chunks, all these 10-year chunks. And let's see how many of them end up positive and how many of them end up negative kind of idea. And the majority of the time across all these little ranges from 2001 to 2018, all these five-year periods, all these 10-year periods, the majority of time pension funds underperformed the index.

36:01So the point we're trying to make there is, yeah, there were some periods probably here or there where Hedgehog Fund outperformed. But on the whole, they've lost more times than they've won. Our call to action for public plans from that research was that if you're going to keep doing this, you need to find a way to defend yourself. Like, is it worth the trouble anymore to keep doing this? You know, we've looked at all the different periods, all different times. It's just hard to make a strong case for this complex approach that hedge fund have shifted to over time. And it may not be that indexes have to be the right answer, but it's just, this is relative to, I think, more vanilla asset classes at the very least.

36:40You can still do active investment and other things. Indexes probably are the right answer though. Yeah. That debate is for a different time. But I do agree, now's a weird time in the broadest stock market. also with some of the concentration issues. I can kind of appreciate the argument against indexes a little bit more than I used to, given the current situation. Yeah, that's fair. Isn't the Nevada State Pension Fund that's kind of famously an index investor? He comes in with his ramen noodles every day, clicks one button and goes home. Yeah, something like that. And has whatever top quartile performance relative to everybody else.

37:16Yeah, he doesn't have to defend himself in meetings. It's easy. You summarize other research in the paper, so I do just want to ask about it. How do your findings in this research compare to other research that has tried to look at how public plans or just institutional investors more generally have performed by investing in alternatives? It jives with our own work from before, showing that allocating away from vanilla spots and bonds towards alternative asset classes has been a net negative. It jives with the more recent research coming out of Harvard and USC by Emil and Julianne. It tries to understand the reasons for this shift, which seems to be kind of a consultant class.

37:55And I think importantly, it pushes against the main argument whenever analysts try to look at specific periods to argue against public plan investments. One argument refuting that is always public plans say, hey, you're cherry picking your period. I am sympathetic to that argument. And so I think in a really important aspect of what we did was trying to look at all different periods over time. because you can always say something about a given period, the context, what's happening in the world markets. We try our best to kind of nip that in the bud with our approach. I don't think it's hard also for the average individual who kind of follows these asset classes at some level to feel this too.

38:43It's not hard to find a story of private equity not being able to offload their assets, having tons of dry powder, not finding investments of only top or top performers actually doing well. There's a drumbeat of this that I think cooperates to the more in-depth academic and academic light, I guess, research. You said your sample ended in 2018? The recent research we did ended in 2023. Okay, 2023. Since then, I mean, I'm just thinking about like out of sample for that research, I don't think things have turned around. I think it's probably gotten worse. Yeah, which is at the center why we struggle to wrap our heads around the desire to add private assets before we get lineups.

39:30I get that everyone should have access. You do this research and you show this in pretty solid analysis that's hard to argue against. You addressed, as you mentioned a couple of times, some of the common criticisms. Now the research is out there. What kind of feedback do you hear from the actual people that it impacts? We are very proud of the fact that at the center, we are seen as objective. Whenever you see our name in the media quoted in Wall Street Journal or somewhere else on a minister, wherever, there's never a qualifier in front of our name, like the left-leaning, right? The right-leaning, the center, right?

40:05It's just the Center for Retirement Research. That is, we work so hard to keep that, our name, qualifier-free. And so we just kind of call it as we see it. There were years where public plans were under serious attack for having egregious benefits. Every time there's a story of a firefighter that went on disability and they caught him on a beach, like every public pension plan should be closed down, right? You spend years kind of being the defenders saying, actually, you know what, look at total compensation. They get paid less in wages. That's why they get a bigger pension. They're actually getting the same money over their time, just getting less of it in the front end, more of it in the back end.

40:38You could kind of get that in the private sector, too. We just get all wages. You could just put more of that in your bank account. But no one wants to do that, of course. And I get that. And so you can be weighted that way, too. But what we found is basically the overall compensation package is the same. There are other times, too, where we had to kind of step up and call it a BCA, which has given us credibility in the public plan space to say the things we're saying now. Because a union member once said, I love the center. I just don't know if they're with us or against us. That's like two thumbs up for me.

41:06You know, it's like depends on the issue. And so we think the issues are wrong. So going back to what you asked about the response here, behind closed doors with investment teams like CIOs of other pensions, what I do here is that we're asking ourselves these same questions. They're working within constraints. They have a board. They have other entities who want to keep costs low. So shifting away from things that promise higher returns has a cost. So they're navigating a different landscape. but the investment officers and their teams are definitely on this and trying to figure out, is this really worth it?

41:46And how do we unwind? If we want to unwind, what does the next space look like? And also those in the investment community, I mean, especially those who have like left the space right now so they can speak more freely. I got a lot of input from those from individuals who used to be CIO, used to work investment team, but now about like, let me tell you what it's really like in these rooms kind of thing. I've had those conversations too. And those conversations are crazy. Yeah. Always. And so nothing officially from public plans generally, which I wouldn't expect. I think the crickets is like what I would hope for best because again, I think we've gained enough respect in the community where they were calling something like this because it deserves looking at and they kind of leave it at that.

42:25So to bring this segment home, how would you articulate the key practical takeaways from your research? So for public plans generally, I think it really righted the ship across all facets of public plan administration. The major ones for us in terms of creating a more stable system going forward, other than the investment side. This is the last element, and this one is arguably the most challenging because it will lead to higher costs, what we think probably over time, as they start really internalizing long-term expectations, shifting out of risky assets. The bottom line here is we thought retirement costed X and actually costed Y, which is bigger.

43:08And that reality takes a while to sink in. And what's really going to reflect that new cost most painfully is when they start shifting their asset allocation. I understand that. That's been our takeaway of our work since really trying to give public plans kind of the space to start thinking about this shift by continuing the jumpy, but also giving them credit. for other things that they've done, which have also been painful and politically costly, has resulted in lower benefits for public sector employees, higher costs for state and local governments. I mean, these aren't easy decisions. I don't want to make it sound like they are easy.

43:46There's lots of trade-offs. They don't work in a silo. But this is the final frontier for public plans, I think, in terms of the last steps they need to do to get their house in order for the long term. Super interesting. It's such a hard problem because it's like, obviously, we can't predict the future. Maybe it happens that to your point earlier about the state of the US market, maybe we do have a lost decade or more and private assets all of a sudden look really smart. Like we see this in Canada too, where the Canada pension plan, which is our actually funded version of social security, sorry.

44:17They take a ton of criticism for their active management strategy, which has a ton of alternatives and has underperformed their index benchmark. I mean, And there's lots of other stuff they get criticism for related to that too. But that can change in two good years for alternatives relative to public markets. And then all of a sudden, they look really smart as opposed to not so smart. It's such a hard problem. It really is. And I'm glad you mentioned that too, because we often look to Canada as our more sober neighbors for thoughts on how to approach this. They had made this shift. And I saw the pieces against their own indexes, which are also giving credit for reporting that and just reporting it and not hiding behind it.

44:54Well, I mentioned that they have taken criticism for other things around that. They've stopped reporting their performance against their index. They've created a new benchmark. Anyway, it's a whole thing up here. That's too bad. Yeah. So you're right. I think that's all. I think we, our former director, who's not kind of emeritus, she still writes a blog. And she did one of those Canada when they came out, performance analysis of the index to bring it back to the US because all we do is think about ourselves, right? It was kind of like if Canada can't do it, Like they pay their investors. You guys actually pay your investment teams real money.

45:27You're competing with the private sector in Canada and elsewhere for top-notch investors. Well, we don't do that in America, for sure. You go to the public sector as an active service with a pickup. So take that for what you will. But in a world where people are playing with money and thinking about money, you're not giving them money. It's hard to think you're going to be getting the best of the best. That was kind of our takeaway from that. Like if Canada can't do this, we should be taking our approach as well. That's an interesting point because they do get paid very well. I mean, that's one of the things Canada Pension Plan Investments has been criticized for is that they are paid really, really well, and yet they're underperforming.

46:03So it's kind of a different angle on what she's talking about. Okay. That was an awesome discussion. I want to move on to some of the stuff you've done on retirees, starting with inflation. Can you talk about what effect inflation has on older households specifically? So I guess I should back up and say at the center, we are engaged in kind of a longish term research agenda, assessing various risks in retirement. The paper you referenced earlier about desired allocations for individuals and recommended allocations for advisors comes out of the market risk portion of that series. We've also done health risks, family risk, policy risk.

46:43So all the risks in retirement we're kind of doing research pieces on. This piece was on inflation risk. It was particularly salient as the risk, given what we went through in the wake of COVID, and are still going through to some extent today, or more like the repercussions of that we're still going through today. Inflation is not going up anymore, but we still have high prices relative to before COVID. People feel that. But what we saw from our research, what we found is inflation is good if you're holding things like stocks and other things that go up with prices. Businesses, when inflation goes up, those things rise.

47:21It's also good when you have debt because debt payments generally are fixed. And so everything else is going up. Anything else that you own that rises with inflation is going up, but the debt's not. So your wages are going up. With inflation, people often don't think of it that way, but it's happening. Another little side note, there's a cute little research piece that looked at how people view inflation. And when it comes to wages, they see it not being driven by inflation, but only their hard work. The prices of everything else is purely inflation. The raising of your wages, though, has nothing to do with inflation at all.

47:59It's just you and your hard work is what they can do. It's like they just don't always appreciate the connection between all of them. And so when we look at retirees versus other cohorts, let's think about that. So retirees often have more fixed income. They don't want to hold less than equities because they want to take on less risk, which means they're not getting some of the gains that equities appreciate during inflation. They also often have less debt to pay off their house. They don't have these kind of fixed mortgage payments that are declining relative to everything else. they don't have wages which is like the primary source of income for workers and those who are not retired and that's going up so they have all these things that are actually making inflation pretty painful relatively compared to other cohorts less equity no wage less debt sounds like a good thing but it can be in terms of like your net gains an inflationary period you lose that effect and then they have a lot of fixed income which doesn't go up with inflation actually decreases their value as well.

48:58If you're getting fixed income from that, it's also not going up. They're in a particularly tough spot. I think the one good thing for retirees is they have social security, which goes up with inflation. But for those who have to rely on their financial assets, well, right, the signals that we kind of think about when we do our research, then all these things matter much more of the fact that your bonds aren't going up. You don't have much in stocks. You don't have debt. You don't have wages. Social security is a small part of what you're relying on. that is inflation index, but it doesn't matter as much to you.

49:28So for retirees, it's tough. Inflationary periods can be tough. You kind of touched on this. Can you just maybe more explicitly talk about how the effect of inflation varies across the age and wealth distribution? The reasons I just mentioned on the age front, they have these different allocations and often less debt. So I kind of explained the age differences in the age profile just a moment to go. In terms of wealth, it's somewhat similar the way that that looks. I mean, if you have less wealth, then you are relying more on social security. That's better for you. In terms of inflation protection, not in absolute terms, which is how what you rely on moves with inflation.

50:08If you have less wealth, then we're likely to still have debt, other forms of debt. And those two things make your, at least relative to inflation, make you kind of better off than the wealthy. That's a little more of a complicated narrative because having more money is always good. The wealthier individuals have more money, but in terms of how their situation changes, I guess, with inflation, the situation changes more dramatically if you're wealthy because you're relying on more non-inflation index stuff to retire. You're relying on financial assets that are more likely to be invested in bonds.

50:43you're less likely to have debt because you've paid it off and you rely less on social security. So as you go up the wealth gradient, you're also relatively more affected in terms of how your situation changes with inflation than those with less, which is a good thing. I think policy-wise, if I was thinking about who can bear periods of inflation, like who can bear some other downside, it's those with more means. That's the reason social security is inflation indexed. Those that are at the lowest rung and they're really relying on this, they're really relying on it. So it has to move from all the prices.

51:18That's kind of what our data show. So let's keep going on that, JP. How do households tend to respond to inflation? I think what you would expect, I think the interesting thing is kind of the magnitude. With the rise in inflation, what most individuals say is they pulled consumption forward. What that means in layman's terms, they spent more of their money right away instead of letting it stay in the bank account and buying it later. which makes sense if you think about what inflation does. If you wait, things would get more costly. So if I was going to buy something in two years and I see inflation is going up, I'm going to buy it now instead if I can at a better price.

51:55And so that was the basic trend that people saved less and consumed more in the current period if they had a belief of high inflation. What's interesting is that the amount that they pulled forward, at least over the five year period was essentially like an overreaction in terms of what it meant for their net wealth and income going forward. And so our behavioral data in terms of how people respond to inflation and kind of decrease in savings and increase in consumption was basically more than they consumed more than they needed to kind of land where they would otherwise be at the end of the five-year period.

52:40So that was kind of the major takeaway. It's not surprising that people move money forward, but it was just that it was kind of an overreaction given their expectations. Did inflation have an effect on household asset allocations? It had some, but the takeaway was that it was minimal. I think we found a kind of think closely. I think it was a minimal effect. I'm not sure if it was even significant, but if it was, the magnitudes were so small that it was a nothing burger as a technical term. And what about financial advisors' recommendations? Did they change in the face of inflation? Yeah. So what we found in our research is that advisors did kind of shift a little bit more actually conservative towards kind of fixed income during inflation periods.

53:19But that was more we found because of rising interest rates that go along with it. Not really quite as like an inflation hedge. Two things that often happen at the same time. It makes bonds more attractive. Like if you already hold bonds, but if you're going to go buy them, they have higher interest rates. So when you reflect on this inflation research, what are your biggest takeaways on how inflation affects the retirement security of households? Our main takeaway is that when you incorporate behavioral responses, it's a net negative on retirement security because people overreact. Periods of high inflation don't make retirement security any easier.

53:55Again, retirees are hit the hardest and people overreact. And that effect of the budget periods are generally, they come out the other side, less secure in retirement than before. We talked a little bit earlier about the market risk research because it was related to the financial advisor questions we have. Which retirees, which group of retirees is market risk most relevant for? It's most relevant for those living off of it. Totally, right? It's retirees who are retired and no longer have prospects of going back into the labor force. And that's why you see decreased allocations for stocks with higher age.

54:31It's kind of an economic theory that wages are a form of bond-like income. When you're working, you can put a bunch of money in equities because your overall portfolio, if you include wages, already has lots of bonds. And once you retire, you don't have that bond-like income and you're really exposed just to equities. And so risk is much more relevant for retirees who are living on those financial assets and trying to kind of reallocate their income flows because they don't have wages for bond-like income is important. I'm really curious. How aware are retirees of the importance of sequence of returns risk?

55:08Not much. That was my guess. And I think we actually had a survey question in there specifically on a camera call. Exactly what I know the result was that they don't have much understanding of that phenomenon and what it means. I don't think it played a heavy part in our research because of that. That makes sense for households. Do financial advisors understand sequence of returns risk? They do, actually. I think our data shows about 75%, I think three quarters of advisors understand the importance of sequence of return risk. What's interesting, though, is that among, and not even clients, I guess it's retail investors overall, there's actually no difference in understanding sequence of return risk, whether you have an advisor or not.

55:48So even though advisors understand it, it's not clear that it's transferring at all to clients in terms of appreciating the importance of sequence of return risk, in particular when you're retired, because that's when you're withdrawing money. And it can have a significant impact whether bad returns come at the beginning or come at the end when you're pulling out money each period to pay for bills. Right. We never really defined what sequence of returns risk is. But like you said, it's if you're taking money out of a portfolio and you have multiple bad years of returns in a row, that can be really damaging to the longevity of a portfolio.

56:23It is interesting, though, that households who have advisors don't have a better understanding of sequence of returns risk. But I guess if they're delegating that thinking, maybe it makes sense. In the end, as long as they get it right in terms of their execution, whether they only internalize the reason maybe is not as important. And hopefully, financial advisors are helping them do that. You talked about as your human capital, which is bond-like, decreases over time, your overall risk exposure changes. How should financial asset allocation generally change over the life cycle to deal with that changing risk exposure?

56:55The canonical approach, this is kind of how TBS were designed, to be candid. I mean, it should decline over time. As you get near to retirement and get older, that your risk profile should change and decrease your exposure to stocks more towards something that's bond-like. And that's, again, what you see with TDS, what you see in people's actual practices, just for how they feel about the kind of exposure they want. But it's also economic theory that shows that for a life cycle model, that kind of declining exposure to risk is exactly what you'd expect. In your survey research, how important is input from financial advisors for people actually building out sensible lifecycle allocations?

57:38We don't look at that directly. What our data shows is that it helps individuals hold more in equities. I don't think it's inconsistent doing the right thing by the lifecycle model, but we don't really ask directly whether an advisor explains to you how your path should look over time. Our final question, JP, how do you define success in your life? Yeah, for me, I think success is having purpose. I am fortunate that I feel like I found that in my work. It doesn't have to be your work. I mean, I find purpose in my family, community, but I feel lucky that I've also found it in my professional life.

58:12It keeps you going. That's really important. And then having meaningful relationships as well, longstanding friends, work colleagues, and not to tie it all back to retirement, But you need some kind of income in your life to kind of enjoy these things and to have the bandwidth to search for purpose, to have the bandwidth to have meaningful relationships. You need to have some kind of baseline security. Money isn't everything, obviously, and everyone knows that. These other things I'm talking about don't really have to do with money. But having baseline security allows you to do the things that matter in life.

58:46And so I think our work is trying to ensure that people, that policies we have, individual decisions people make, help them reach that goal. Great answer. That's a really good answer. Money isn't everything as long as you have enough of it. Yeah. This has been a great conversation, JP. Really interesting topics. Thanks for joining us. It was a pleasure, guys. Anytime. Awesome. Thanks, JP.

59:12Jean-Pierre Aubry:Hey, everyone. It's producer Matt. Thank you so much for tuning in to this week's episode. Before we sign off, here's the disclaimer you've been waiting for. Portfolio management and brokerage services in Canada are offered exclusively by PWL Capital, which is regulated by the Canadian Investment Regulatory Organization and is a member of the Canadian Investor Protection Fund. Investment advisory services in the United States of America are offered exclusively by One Digital Investment Advisors, LLC. One Digital and PWL Capital are affiliated entities, And they mostly get on really well with each other.

59:45Jean-Pierre Aubry:However, each company has financial responsibility for only its own products and services. Nothing herein constitutes an offer or solicitation to buy or sell any security. Occasionally, we tell you not to buy crappy investments in the first place, but that's not the same thing as telling you to sell them. This communication is distributed for informational purposes only. The information contained herein has been derived from sources believed to be truthy, but not necessarily accurate. We really do try, but we can't make any guarantees. Even if nothing we say is fundamentally wrong, it might not be the whole story.

1:00:20Jean-Pierre Aubry:Furthermore, nothing herein should be construed as investment, tax, or legal advice. Even though we call the podcast your weekly reality check on sensible investing and financial decision-making, you shouldn't rely on us when making actual decisions, only hypothetical ones. Different types of investments and investment strategies have varying degrees of risk and are not suitable for all investors. You should consult with a professional advisor to see how the information contained herein may apply to your individual circumstances. It might not apply at all. Honestly, you can probably ignore most of it.

1:00:52Jean-Pierre Aubry:All market indices discussed are unmanaged, do not incur management fees, and cannot be invested indirectly. Which is a shame, because it would be awesome if you could. All investing involves risk of loss, including loss of money, loss of sleep, loss of hair, and loss of reputation. Nothing herein should be construed as a guarantee of any specific outcome or profit. Past performance is not indicative of or a guarantee of future results. If it were, it would be much easier to be a Leafs fan. All statements and opinions presented herein are those of the individual hosts and or guests and are current only as of this communication's original publication date.

1:01:33Jean-Pierre Aubry:No one should be surprised if they have all since recanted. Neither One Digital nor PWL Capital has any obligation to provide revised statements and or opinions in the event of changed circumstances. See you next time.