Ep703: Laurens Swinkels – Stay Liquid Even When Investing Long-Term

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win an investing you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives to join me go to my worst investment ever.com and sign up for a free weekly become a better investor newsletter where I share how to reduce risk and create grow and protect your wealth. Fellow risk takers this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, Lauren Swinkels. Lauren, are you ready to join the mission?

Laurens Swinkels 00:43
I'm ready, Andrew.

Andrew Stotz 00:44
I know you are and it's kind of fun to talk to you before because you are a type of person that is really prepared. So that's exciting. Let me introduce you to the audience. Lawrence Lorenz is Associate Professor of Finance at Erasmus University in Rotterdam, and Executive Director and Head of quant strategy at Rebekah goes sustainable multi asset strategies team. His areas of expertise include allocation research, and empirical asset pricing. He teaches finance courses and is published his academic work in peer reviewed reviewed journals such as journal of financial economics, Laurens holds a PhD in finance and a master's in econometrics from Tilburg University in the Netherlands, Lawrence, take a minute and tell us about the unique value that you are bringing to this wonderful world.

Laurens Swinkels 01:37
Thanks for the nice introduction, Andrew. So I think what really characterizes me in this world is the curiosity that's that I bring to the world. So I'm very curious about how people behave, and why they behave like that. I think most people think they behave that's in their best interest. But still, sometimes to me, it seems rather crazy. So I try to understand what is going on, and how that is for them, something that is very rational, but for me, maybe not so because I have a different assumptions or value set or something. And I apply it in my daily professional life, to see how financial markets work. So for everybody recommended to buy a certain security, somebody also has to be convinced that it's a good idea to sell a security, there has to be a win win situation, otherwise, there would be not a trade going forward. So why is it that somebody thinks it's a good idea to buy another one thinks it's a good idea to sell to me, that's a very fascinating topic. And what I tried to do in this with this curiosity is to see whether I can find new datasets that kind of enrich my understanding of how financial markets work. So this makes me just very interesting to see what are my priors that I have about how financial markets work, whether those are valid in this new datasets, or whether they're challenged, and whether maybe I should change my, the way I think about my finance. So I've written many academic papers on this new type of datasets sometimes collected by myself, sometimes collected by others, but applied by me. So things like emerging markets, currencies, Frontier Markets, bonds, Frontier Markets, equity factor investing, all these kinds of things I researched more than a decade ago now. So I thought that was at that time very new datasets a couple of years ago, I applied that to my thinking to China, a shares which is a newly opened markets for investor. So I thought I need to know a little bit more about that. But that's kind of more recent things. I'm also very interested wherever we can learn more about what happens in history, episodes that have not been explored yet. So together with the theme of leads, who was also on your podcast before and another colleague, Guido Belzer, we investigated factor investing over the past 200 years. So going back all the way to 1800s. And financial markets, how they functioned at that time. And we remarkably find that, like the results that we found in the past 50 years. That's they're not identical, but very similar over the 150 years before that financial markets were there. And during this project, I also got to read investment books that were written in 1850, or even before that, and I was really shocked that people were not so stupid in that time. They understood many things about investing. So I also learned about that it's easy to think that all our knowledge has gathered over the past 10 years, but hundreds, maybe 200 years ago, people were when it was about money, people were not that stupid. So they have many good ideas. So I think that was something that really sparked my curiosity in that area of more historical finance. And yeah, that's good to learn these things. Yeah, most recently, I'm looking at starting to get to know is real estate tokens. So like the blockchain and how that can be applied, or even carbon credits tokens. There's no exchanges on carbon black carbon credits, carbon credits can be traded. So I'm also interested to see how those markets function and why they exist and whether they will become big or not. So a whole spectrum of curious things. That's a

Andrew Stotz 05:42
busy man. Yeah, yeah. Busy. That's

Laurens Swinkels 05:45
what you got. If you're curious about all kinds of things, you make yourself a busy Yeah.

Andrew Stotz 05:49
You know, I was interviewing someone just this morning, I haven't come out with the episode. But it was from a the association of individual investors in America and they do a survey of their members. And they found that actually, members have been Ultra bearish on and on, they've never been this bearish for this long of a time about 80 consecutive months. And it's kind of interesting, because we had kind of a boom period, then we had a bust period. And then we've kind of boom, you have the Russian war, and you know, all that stuff going on. And, you know, one of the things that I was wondering about has kind have times changed. Are we right to think that times have changed? Or is should we think that this time, never say this time, it's different? Because it's not? One of the reasons I was thinking about I mentioned to him was, well, we've had an ongoing war, that can turn people pessimistic even if the market is going up. And the second thing is that we have government intervention at a level never seen before in the history of more, I'm assuming in the history of markets. But you know, and I think back to when I started as an analyst in 1983, you know, nobody was watching the Fed, to try to figure out what's the Fed gonna do tomorrow? And I'm just curious, like, and then you add on the barrage of information that's coming through social media channels and mainstream media channels. And then you add on that there's not a lot of investigative reporting. So we're just getting propaganda from companies coming out through mainstream media. It's hard to see that this time is not different. But what do you think?

Laurens Swinkels 07:36
So yeah, so I think the circumstances, of course, they change all the time. So life has come faster, because now it's news from the US to Europe doesn't travel by both, but it isn't a within a second, it is the things, for sure, have changed. But I think it doesn't necessarily mean that big picture, things have changed that are important. So if you think about that, like I said, how people who were in financial markets, what they were thinking how they were behaving, how they were, maybe it was actually not that different. Of course, their information set was much smaller. But there is also paper saying that people in Amsterdam were waiting for the boats from London to come in to Amsterdam to get the news, from Amsterdam, and when there's a storm, then suddenly, there's a lot of uncertainty because the boat cannot sail into Amsterdam. So there's a lack of news, and people don't know what to do. So there's increased uncertainty with has effects on prices in Amsterdam. So these kinds of things, make me think, yeah, so the speed, that's a completely different time timescale that we are thinking about. But many of the issues that we're dealing with is making financial decisions that are going to have a big impact on our life with in a world full of uncertainty, because there was a lot of uncertainty, maybe even bigger at that time, but maybe not just more data, but maybe the amount of uncertainty hasn't really gone down. So how to deal with that, and how that gets into asset prices. Maybe it hasn't, I think the fear and greed sentiments, maybe that's of many times, we've seen it and it hasn't changed that much. But of course, yeah, there's the circumstances around the change. So there's no assets that we can be traded now, that could not be traded 200 years ago. But yeah, I think in general, the alternative to because I get this question a lot with the 200 years. Paper is like people, it's really valuable to look at what happened in 1820 or so. That Well, at least it would be good to know what's happened there. Right? So you can always say that this happened because of this reason, and it's not relevant anymore. But to say, I'm just closing my eyes, and I'm pretending it never happens. That's another extreme way of thinking about it. So at least I prefer to know what's happened. And then try to see whether that can still be applied to today's that to learn something from it today. Yeah,

Andrew Stotz 10:18
good points. And I know you mentioned to me earlier about your global diversified, you know, portfolio or your understanding of that. Maybe you can explain a little bit about that, and what you've learned over the years, so that our listeners and viewers can understand a little bit more about, you know, what, what, what should they know?

Laurens Swinkels 10:41
Yeah, so that's something I've been fascinated about. We got many questions at Atro. Beco, asking us about the market portfolio. Because, you know, that's what the GAAP, the capital asset pricing model says, there's the market portfolio, and what does it look like? So, and what's happened is that if you ask me, I will download some series, and come back to the clients. But if a colleague will do get the same question, he would maybe download slightly different data slightly include an asset class or not based on his understanding of what the client wanted. And then some points, row notes, Tavern and myself. So I'd maybe we get this question. So often, we should just write a paper about how to do it.

Andrew Stotz 11:26
And then we don't just preface that, in the world of finance, we're, we're taught to basically compare a particular stock or a particular strategy against the market portfolio. And the market portfolio is kind of a, what I was always taught is it's kind of a theoretical portfolio, it's, it's a portfolio of all of the assets that are available in this world. It could be art, it could be stocks, it could be bonds, it could be real estate, it could be just many, many things. And so I always saw it as something that was a bit theoretical, and you know, to construct something, maybe some bonds and some stocks, but I think you've gone a little bit further. So maybe tell us about what you guys did.

Laurens Swinkels 12:06
Yeah, so what we see in the US, typically people just say, let's use s&p 500. So that's kind of the shortcuts we know it's a theoretical concept. It's difficult. So let's use s&p 500. So what we did is actually collect data on many more asset class. So corporate bonds, for example, is a big asset class, not so easy to find data on before 2000s, maybe on the US, but on global corporate bonds, not so easy. So we had to go to the University Library and to the stacks as they go to the basement where all the dust is on the books to actually open some old statistics, books of the IMF that they didn't digitize to actually get that data and make it public. Again, we looked at government bonds, if you want to go back to 1960 on government bond investing, it's not that obvious to get data on that. So on a global level that because that's what we're interested in, we look at commodities as well. So all these real estate, of course, but we maybe that's important thing to say, the theory, it says like this market portfolio, that's everything is included. But we narrow it down to saying we look at everything that is investable or invested by global investors. So that's like a durable consumption or private residential real estate. That's not what we call the market, but it should be something that investor could actually invest in. Right? And so that's what we do, we go back to 2016. And first we did a paper on the composition of the market portfolio, if you want to advise, what, what is the market, the average dollar invested, then that paper would actually say over time, this has changed like this. And at some points in time, stocks were 60% of the market portfolio. But other times, the stock market was only 40% of the market portfolio. So the market portfolio itself is not fixed weights. It's the 6040 portfolio, something that we introduced, but it changes all the time. And later, but after we published this composition and financial analysts journal that people asked us, can you also collect returns. So then we started a project on collecting returns on these asset classes, and put them together to have the return on the market portfolio. And that's republished in review of asset pricing studies. But then, that was an annual, annual data. And then many people who read the paper said, Ah, they also have monthly data, because that's much nicer if you want to do risk analysis to have monthly data. So now, we embarked on another four year low. I think we're working on now for four years to collect all the data. And very soon we will have a paper out on the monthly returns of the market portfolio going back to 1970. And seeing how risks have changed over time. And in that period, so I'm very excited about that. It's a bit like a practical that's my I like to read academic papers like the gap. But I also like to be practical. What can investors really do with it? So this is kind of my translation on what can you do with it. And on my university data page, people can also download the data on the composition of the market portfolio for free. So I just updated every year there so people can it's a free resource for people to check that curious. Yeah,

Andrew Stotz 15:22
I'm gonna have a link to that in the show notes, because I've been going through your site, and it's fantastic. You know, you include the public datasets, and then you have your list of research, which is really helpful. For those of us that like to kind of crunch numbers. Well, let me ask you a couple of questions about this. The first one is, I sometimes get annoyed when I see people talk about different asset classes. Because I really ask myself, Is it really an asset class? So one of the things that I hear commonly referred to in the world of finance is, well, I invest in five different asset classes, and what are they? One is small cap stocks. One is value stocks. One is momentum stocks. One is large cap stocks. And I think, Wait a minute, aren't these all? They're just subdivisions of an asset class? Just like bonds, you've got corporate, and government? Are they not subdivisions of asset classes? Or am I missing something there that I don't understand?

Laurens Swinkels 16:25
Yeah, so this can get this discussion, we also have many people. So it can be very tough, a lot of discussion without getting any results. So what we did in most of the papers, we have asset classes, that is a little bit more granular level and asset categories, as we call them, where you kind of aggregates a few. But typically, how we look at things is that you get equities. And that's just like momentum, equities, to me is not a general equilibrium concept. Because somebody has long momentum, somebody else must be short. So I have the market cap of the portfolio. But then we also includes in the asset category, we also include private equity with that, because equity, if you think broadly about it, equity is equity. Right? So but we can discuss, so it's a separate asset, class private equity, because other people think differently about it, but to some extent, it's equity. So, real estate we have as a different asset class, because that's what many people consider to be very different. But of course, well, you can also debate a lot of what is real estate correlates a lot with equity. So it's maybe REITs are also part of the global equity market. So I think that's also a debate you can, you can have whether that should be separate or not, but I think many people consider it to be separate. So that's why we also separate that out. And then we have non government bonds and government bonds. So that's what we split out, because one is kind of government bonds. And we consider it to be, yeah, and it's considered to be like a safe asset, it has some kind of properties that maybe are a little bit different than then the corporate bonds where credit risk is more importance. And if you

Andrew Stotz 18:02
went if you went to the highest level, on the different groupings that you have, and we were to be follow my line of thinking, how many actual asset classes would there be? In other words, if we were to combine corporate bonds with government bonds and save their bonds, if we will combine, you know, different types of stocks and say there's stocks? If we were to look at real estate, we may say, you know, raw land is a different asset class, then, you know, homes, we know that homes through mortgages is a huge, you know, kind of separate asset class. So maybe those are separate. But would there be five different asset classes? or would there be 50? different asset classes? How would you look at it, if you went up to the highest level?

Laurens Swinkels 18:51
I think then, five is like the higher than I even separate out. These bolts get squeezed because I think I have only commodities kind of left that you didn't mention. Others can also be although, there you have to be a bit if you only look at the futures of forward markets, then if somebody is long, somebody else is short. So we're looking at like physical gold as an investment, for example, a physical owning physical gold, because that's a long only investments and a future on gold is has a long party and assurance, apparently, so that nets out in aggregate for the markets. But I think if you have equities, while you say bonds, I still think that credit risk is maybe a little bit different. So I would say credit risky bonds and safe government bonds. Real estate, and commodities. So that's basically it's within these asset classes, like you said, we separate out different you have emerging that high yield bonds, all these kind of things, but to me that is one level deeper than what you mean right now. Yeah.

Andrew Stotz 19:56
And since we've got the professor on it And I'm gonna ask you the big question in just a minute. But I just wonder if you could just teach us, you've done a huge amount of research over a long period of time. And I'm gonna have links to all that. So people that are interested in digging deeper, there'll be able to go to that. But what would you say is kind of your key learnings? I don't know, the top 123 things that you've learned from all your research that you know, to be true, or as close to true as we can get in the world of science and an academic research? What would be some of the things that could help all of us to learn from what you've learned?

Laurens Swinkels 20:38
That's a deep, deep question, Andrew, as the I think, one of the I think, how I combine also being like an investor working at an investment firm myself and doing the academic research. Is that I think the it's, I'm quite humble about what I, how I think I can predict markets. Okay, because I think there's always looking back, it's always easy. Well, if you look forward, you maybe should say, it's always easy to say, it was obvious that the it bubble was a bubble. It was obvious with hindsight, yes. But so I think these kinds of

Andrew Stotz 21:21
okay, so that, let's say that's a principle right there to say, it's very difficult to consistently predict the future. It's maybe let's say, it may be even just a random outcome.

Laurens Swinkels 21:34
Yeah. So I think it's, it's possible, but I think it's not that some people say like, it's obvious, we all knew that all these kinds of statements, I think they're way overdone, because it's extremely difficult. And it's all probability games. And some, it's not old at all, like, this was the bottom of the market, it was clear that the tattoo? Well, I'm very hesitant to say that that was clear at the time, because most people were panicking at the bottom of the markets. So that's, what about, you've

Andrew Stotz 21:58
done a lot of work on factors. And, you know, I know, I talked to him a lot on our episode about the factors related to risk, which was, I think, very fascinating and interesting. But I just wonder, from your work on factors, is there anything that comes that you think, Okay, this is somewhat, you know, reliable that I feel like I've done enough research to say, this works, or has a higher probability of working on something else?

Laurens Swinkels 22:26
Yeah. So I think the just the paper that I did together with him, where we look back 200 years, and when we compare it to all the different cross asset classes, the factor premiums, I think that really strengthens my because like you said, at the beginning, like maybe the times were different. But if the results of financial markets are pretty similar, that's also that's a very robust Friday, right? The time was different, but the results are the same. So I think for factors like low risk, valuation, momentum, that's those are very persistent factors robust there. And it also means that a different thing than robust is, it doesn't mean that they always work, right? Because it's not an arbitrage in the sense that, you know, it's going to work if you so there are periods that are very tough if you're invested in these factors. But that's the reason that's the only reason that I can keep persisting, is that there are people who throw the towel and say, Well, this is not for me. And I think that's really, really important. It could be arbitrary. That's another

Andrew Stotz 23:30
principle that there are some things at work. But it you have to accept the fact that some things will not work for a long time. And that doesn't mean it's not going to work. It's just that there's going to be periods of time. That is kind of a truth out there, I guess. Yeah. Yeah.

Laurens Swinkels 23:51
So that's the think, always good to really even if it works, on average, on the longer run, doesn't mean that the next five years will be like that, and maybe even 10. Okay, those are

Andrew Stotz 24:02
some good places to start. And I think I just want to, you know, thank you for taking the time to go through some of that, you know, it's really always interesting to talk to someone that's done a lot of research to, you know, try to understand things. And I feel like there's a lot more behind this discussion that I know myself and probably other audience members would love to learn more. But we got to get on to the issue of the day and that is the following. Now it's time to share your worst investment ever. And since no one goes into their worst investment thinking will be tell us a bit about the circumstances leading up to and tell us how a smart man like you could have a story of your worst investment ever. Take it away.

Laurens Swinkels 24:44
Okay, thanks, Andrew. So the story starts when you already mentioned I started studying econometrics in Tilburg, a small town in the south of the Netherlands. And when that time I moved out of my parents place and moved Do that to data. And I was considering should I rent an apartment or buying apartments. And my decision at that time I thought I will only do masters here believe for four years, probably the best thing is to rent and then see where I, when I grew up what I will do. But of course, that period, those four years was very good years for the housing markets. And I decided, after my master's to do a PhD in Tilburg, as well, so I stayed another five years there. But that was still a limited period of time, I still didn't feel like I really grew up. So I thought I'll continue renting which was not a very good decision, because house prices went up further. After I graduated, I moved to Amsterdam, where compared to Tilburg, the house prices were just unimaginably high. So I thought this has to go down. It's I will, I will rent. So I rent it, house prices kept going up. So then, when I moved to tobiko, after a while, I thought I got a little bit tired of commuting from Amsterdam to Rotterdam, I thought I will just i This is the moment I buy a house in Rotterdam where it's much cheaper than in Amsterdam. So it's like relative value within the Netherlands. So this was a good moment. That was six months before the peak of the housing markets in the Netherlands. And, of course, what I didn't foresee at all was that five years after that decision, I moved to another country. So the background you see here is Norway, where I moved to an end of the 2012. So and my house that I bought was 25% underwater. And that was more than 100% of my financial wealth. So it's maybe like 25%, it's not 100% loss. But if it's more than 100% of your wealth that you have invested in a big, that's just 25% of value. That was tough. So I actually only sold the house two years ago or so for a very small profit, but way less than what I invested in it to keep it standing. So that was maybe it's like the worst in the sense that I didn't completely go bankrupt. But something that really stuck with me on how that one decision, or actually ended decisions leading up to this for not buying hours, and then buying at exactly the wrong moment. Really had, well, severe financial consequences. I guess. So that is what stuck with me this big decades.

Andrew Stotz 27:58
So how would you describe the lessons that you learned?

Laurens Swinkels 28:03
Yeah, that's, I was looking back at that. I think one of the reasons also to buy at a time is that what many people told me and I wasn't really looking in real estate, but house prices always go up. Until they don't, is what I noticed that I think it's something that people say like it's it's never hurts to own real estate, like I'm talking about residential, not offices, residential real estate. Well, my at least my experience, my right has been different in this aspect. So I know that there is some risk in it. I also learned that liquidity because I thought even if house prices go down, I have to live somewhere. So what Mark the markets is not important to me, because I'm just living there and enjoying my garden. But if you move to another country, then the liquidity of being able to sell and buy a house and another place where you actually live is valuable. So that's even though you are a long term investor and you think you're really long term, there may be things that cross your path for which liquidity can be important and valuable thing. It's easy to forget about that. I think what I already said before is that of course in 2008 Everybody said that they knew that the peak in the housing market was there in 2007. So but nobody told me when I bought the house that the peak was there. So it was with hindsight, the stakes are easy, but when you actually make the decision it is much more nuanced, I think, in many cases. And I also learned a little bit about my own behavior. So first, like see, sometimes these emotional curves where people say I should have bought should have God should avoid that. somebody you're convinced that you're buying, which that is exactly the right word to actually do it. So I think that's what happened. And then afterwards that people say, like, there is emotional barrier to sell something with a loss. I also experienced it because of course, I could have sold my house with a 25% loss when I moved, but I didn't, because it felt, too. I don't know, I don't know what it's embarrassing, or what's too much value in the house at that moment. But at least I felt very compelled that the market was wrong. And I should keep onto the assets for a little bit longer until it's back at its purchasing value. So I think this even though I know about these behavioral things, and I studied them, it is very easy to fall victim to them yourself, because that's how behavior works, apparently. So that's why I have always so that's why I've developed over the past years, or CO developed many of these quantitative or rule based investment things to try to avoid the biggest kind of behavioral mistakes that you could, that you could have, because I know it's so easy to fall prey to them. Yeah,

Andrew Stotz 31:13
yeah. There's a couple of things I was thinking about. First of all, I'm, I still don't own a house yet. And I'm not a spring chicken. And I rent and I've rented all my life. And the interesting thing is, I don't regret not buying a house, only because I never followed house prices. So I could have been missing something huge that you know, I just missed it. I did, at one point in Bangkok, buy a condo, but very quickly sold it and decided I didn't want it. And I did it twice. And I thought the second time nope, I'm never doing that again. And so I never bought it. So I just fought now, in places like America, as an example, there's so much incentive for people to borrow money to buy a house that it's hard to resist that, you know, very hard, it's free money, basically. But what I would say is that for those people that are considering renting, it's if you can find something that's really low cost with Thailand, in Bangkok, I've got something that's really low cost, I've been here 20 years, and I enjoy it, I like it. I don't feel any drive to own a house. So that's the first thing it just made me think about. And, and so that that was one thing, then the other thing is just kind of thinking about in some ways, when you buy a house, it's a trap. Because of the lack of liquidity, yes, if the markets hot and if it's in the right place, you can dream about the idea that you're going to be able to sell it and you may be able to. But really, when you go into a housing, you know situation where you're buying a house, you should be very aware that the risk is is that you're not going to be able to sell it at the time that you need to sell it at the price that you want to sell it in, in Thailand in Bangkok, I would argue that you're never going to be able to get any appreciation in the price of what you're buying, for most people that are buying because most people are buying condos in Bangkok. And the value of those condos, 20 years from now is going to be much lower than where you think it's going to be because of all the new condos that are built all around it that people can go into. And so the risk related to home is that you don't realize the final capital gain that you thought you're going to realize, and it's not like a dividend paying stock. Well, okay, I didn't get the capital gain that I thought but I did get these dividends for the last 30 years. And so that's the other side of it that I'm just cautious about myself. Anything you would add to my own experience there.

Laurens Swinkels 34:03
Now, I think the main reason, what I think is why this maybe that's different than your you mentioned tax reasons. So that's, I think, a big incentive for many countries to own a house rather than then rent it. But the other thing is also about the freedom you have on modifying your house, so I don't know least in my previous places where I rented I was very limited in making changes that I wanted to do. And when you own a house, you can make it as you want it and it fits best for your family. And I think that's one of the advantages that you have when you buy a house that you can do that. That is a limitation for renting but rather thanks I also already the house comes with problems. So it's, it's in a sense I understand that very well the time that I was renting that I could just say within three months leave the place and go somewhere else and be happy somewhere else that's that's also a nice it can also be like a nice comforting feeling that you have just, it's not maybe all about money, but also about peace of mind. That's great. That's

Andrew Stotz 35:07
so. So let me say, based on what you learned from this story and what you continue to learn, I want to think about a young person coming out of university, thinking about buying a house, looking at it, going through some of the same things you went through what would be one action that you'd recommend that they take to avoid suffering the same fate?

Laurens Swinkels 35:27
I think the challenge for this problem is actually that there is not a lot of financial products or innovation yet that deals with it. So I think you at this moment, it is from in many cases, at least, I don't know many counter examples, that there is a moment where you enter or you can keep renting, of course, but if you're entering the housing market to buy, there is one time you own zero, and then you own one. And it's not like something that you can do with shares, for example, that you every month, save $200 in and slowly build up your portfolio. So you can have time diversify away. So maybe the best thing if you're not there yet for buying or you No, no, no, we have to buy is to get exposure to real estate through listed markets, maybe it's not a very good, maybe maybe not a very good hedge, but at least it can be a hedge that if real estate prices go up, typically it is related to supply and demand in a certain area. So maybe that's one way that you can partially hedge that risk that if house prices skyrocket that you benefit from it through investing in REITs or so. And that you don't feel completely left out that you have everything you had on the savings accounts and did not benefit from that. That would be one. One of the things that I think but I think financial innovation can catch up here to make it easier for young entrants in housing markets in general.

Andrew Stotz 36:54
Yeah. I think that's great, great advice. I never even thought about the idea of getting real estate exposure. Because even, you know, obviously, you're going to benefit if the real estate market rises. But the other thing is, it's going to allow you to buy time, and you're not going to feel the pressure to jump into something just because it's rising, because hey, I'm already making money on that. And my sister who's a mortgage broker in America, told me something I always remember, which I didn't listen to her when she told me, she told me afterwards, repeated it, which is only buy something if you walk into it. And it's like, I want to live in this place for the rest of my life. And that wasn't the way I felt, when I bought the places that the condos I bought and sold, you know, it's more of a kind of investment because I just realized, no, I don't want to live here. So this gives you this gives you a chance to delay that decision that you've got until you find that right spot where even if you pay more to get into that place of a lifetime that you want to be, then it may be that it really saves you. So I think that's great actionable advice, let me ask you, what's a resource that you'd recommend for our listeners?

Laurens Swinkels 38:03
I think if I can advertise a little bit for myself, I think the at least the research that I did that I mentioned before, I have a data page on my university website. So some listeners might find it useful if they want to do their own number crunching as you called it to, to download these datasets there for free. So they're available to check out. I think. So what would I recommend readers to do, actually, maybe it's not an investment book or so. But what I was thinking about is what I personally do is check out scholar google, or SSRN, two websites where people post their latest thoughts, basically, and put some alerts out that you get a message. If one of your favorite authors or one of your favorite topics, there's a new paper outsets on that topic, so you can learn more for free on, it's just open, open access open source. So you can read the Working Papers, what people are working on, and what their thoughts are at the moment. So to me that is at least something that you can gain more in depth knowledge. If you don't have the time for that. I think there's also several people that have very interesting blocks where they summarize the papers for you and the main takeaways. So I think Larry sweat row has been on your podcast regularly. And I think he has one of the those blocks that are very nice, where he does the work for you to summarize these latest papers and make it easily digestible for people who don't have a lot of time. So that's another thing I think that is very valuable for people who want to know more about how the financial markets work.

Andrew Stotz 39:41
That's great. And, you know, I just downloaded your data from the global market portfolio. So that's interesting. I have a link to that in the show notes so anybody can go there and learn more great advice. Last question, what's your number one goal for the next 12 months?

Laurens Swinkels 40:00
I want to discover things that I don't know yet. So change my priors on how financial markets work. That's my goal and I hope to contribute myself to it. So that's what I tried to do to do these interesting projects that will change my mind. That's the goal.

Andrew Stotz 40:17
Fantastic. Well, listeners, there you have it another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. If you've not yet join that mission, just go to my worst investment ever.com and join my free weekly become a better investor newsletter to reduce risk in your life. And as we conclude, Laurens, I want to thank you again for joining our mission and on behalf of AES Don's Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Laurens Swinkels 40:48
Thanks for your interview, Andrew, if I may, I would like to answer with a quote from the late Jerry Springer. Till next time, take care of yourselves. That's each other.

Andrew Stotz 40:59
Beautiful, and that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate it today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your words podcast host Andrew Stotz saying I'll see you on the upside.