Ben Carlson: Investing at All-Time Highs | #412

In this episode, we are joined by Ben Carlson, Director of Institutional Asset Management at Ritholtz Wealth Management and author of Risk & Reward, for a wide-ranging conversation about market history, investor psychology, and the realities of long-term investing. Ben brings his trademark blend of data-driven thinking and plainspoken storytelling to topics like market crashes, inflation, diversification, and why investors are so tempted to time the market.

We explore the lessons from Japan's historic asset bubble, the lingering impact of the Great Depression, and why diversification remains one of the few true free lunches in investing. Ben also explains the difference between volatility and risk, why the stock market is not the economy, and how investor behavior—not market performance—is often the biggest determinant of success. Along the way, we discuss inflation hedges, lost decades, speculative behavior, and the psychological challenge of staying invested through inevitable downturns.

Key Points From This Episode:

(0:00:20) Introducing Ben Carlson, his new book Risk & Reward, and his long-running blog A Wealth of Common Sense.

(0:03:16) Why investors shouldn't panic about investing at all-time highs.

(0:03:58) The Japanese bubble and crash as one of history's biggest market anomalies.

(0:05:39) Why Japan's long-term returns look very different when viewed over 50 years.

(0:06:27) Lessons from the Great Depression and the worst stock market crash in U.S. history.

(0:07:43) Why the best long-term returns often follow the worst crashes.

(0:08:53) The role of diversification and self-awareness in managing portfolio risk.

(0:09:55) Defining investment success by achieving personal goals—not beating benchmarks.

(0:10:42) Why inflation feels so painful psychologically for investors and households.

(0:11:42) Ben's three favorite long-term inflation hedges: human capital, housing, and stocks.

(0:13:47) Why market timing is psychologically seductive—and so difficult to execute successfully.

(0:15:00) Why handling losses is the single most important skill in investing.

(0:16:13) How devastating the economic side of the Great Depression really was.

(0:18:49) What policymakers learned from the Great Depression and 2008.

(0:20:39) The difference between recessionary and non-recessionary bear markets.

(0:21:52) Why the biggest up days and down days tend to cluster together in bear markets.

(0:23:18) Preparing for inevitable bear markets with a durable long-term plan.

(0:25:07) Why the stock market and the economy can diverge dramatically.

(0:28:10) The difference between volatility and risk—and why risk is often personal.

(0:29:37) Why comparing the stock market to a casino is fundamentally wrong.

(0:31:55) How modern investing platforms encourage speculative behavior.

(0:33:18) How extreme Japan's 1980s asset bubble became before collapsing.

(0:35:43) The most important diversification lessons from Japan's lost decades.

(0:37:39) How common "lost decades" actually are in stock market history.

(0:40:58) Three dimensions of diversification: geography, asset class, and strategy.

(0:41:53) Why there is no perfect portfolio—only the right portfolio for you.

(0:42:52) Common ways investors lose money in markets.

(0:44:03) Why investors should be skeptical of billionaire market predictions.

(0:45:57) Ben's evolving definition of success and raising good, kind children.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)