The advisors who are listening to this podcast will start a financial-planning process with a risk assessment for a client. That exercise will evaluate how much volatility the client can tolerate. It will serve as input to constructing a portfolio that optimizes returns given a client’s risk tolerance.

My guest today is here to explain why that is the wrong approach. The problem is not to minimize volatility, he says, but to figure out how money a client needs, when they need it, and to solve for that problem.

As one of us points out relentlessly, risk isn’t a number, rather it is a notion or a concept.

GMO's Martin Tarlie argues in a new white paper that the U.S. stock market was a bubble from early 2017 through much of 2018, and that the bubble started to deflate in Q4 2018, despite strong fundamentals.