In this episode, we speak with Northern Trust’s Peter Mladina. Peter has published extensive research in the areas of both financial planning and factor investing. We discuss his work in both areas and brought in our friend and co-host of our The Education of a Financial Planner podcast Matt Zeigler to help us with the questions on the planning side. We cover goals-based planning, modeling human capital, how to think about alpha in a post CAPM world, the future of the 60-40 portfolio and a lot more.
Jump to episode highlights:
- 02:55 – What Peter has learned from his experience teaching at UCLA
- 06:48 – What is goals-based planning?
- 09:11 – How to frame competing purposes in financial planning
- 12:07 – Building sub-portfolios for individual purposes
- 18:44 – How to model human capital
- 23:44 – What makes for a good investing factor?
- 30:22 – Using factors in a long-only world when they were tested long-short
- 33:05 – How alpha changes as risk-factor models expand beyond CAPM
- 35:47 – Is alpha more difficult to generate using a 3 factor model?
- 40:23 – Key things to look at when evaluating active managers
- 47:46 – The future of the 60-40 portfolio
- 54:17 – How Peter looks at rebalancing
- 59:12 – Active life management