Investor Psychology

The Creation and Redemption Process of ETFs

October 21, 2020 by Hans Blake, CFA, CPA

Reading Time: 2 minutes

On this episode of Intelligent Money Minute, we interview Matt Hougan, Chairman of Inside ETFs on what ETFs are and how the ETF creation and redemption process works. ETFs have a unique creation and redemption process that differs from mutual funds. An ETF publishes a list of all the securities it wants to own at specified desired weights. A group of authorized participants will go into the market and buy all the desired stocks the ETF has listed at the desired weight. The beauty of this from an ETF perspective is that it essentially sits still with effective little effort and still receives the desired outcome. According to Matt, It’s an efficient batch process with potentially less risk.

Matt said you don’t need to know how wifi works, as long as it works. However, you may be the “engineering” type who likes to dig into how things work. At Intelligent Investing we work with engineers and other executives and professionals who take time to understand our philosophy and processes. We’d love to let you open up the hood so we can show you exactly how our Intelligent Investing engine runs and how we’ve integrated over 30 technologies into the firm. To learn more, go here to schedule a complimentary call or meeting. We are excited to be interviewing Matt Hougan, and we have several more episodes where we explore the ins and outs of ETFs, bitcoin, and blockchain, so be sure to subscribe to our podcasts to hear all the interviews.

Matt Hougan Bio

Matt Hougan is one of the world’s leading experts on crypto, ETFs, and financial technology. He is Global Head of Research for Bitwise Asset Management, creator of the world’s first cryptocurrency index fund. Hougan is also Chairman of Inside ETFs, the world’s largest ETF conference. He was previously CEO of ETF.com, where he helped build the world’s first ETF data and analytics system. Hougan is co-author of the CFA Institute’s Monograph on ETFs. He’s also a crypto columnist for Forbes, and a three-time member of the Barron’s ETF Roundtable. For more resources from Matt Hougan click here.

An Introduction to ETFs with Matt Hougan

October 14, 2020 by Hans Blake, CFA, CPA

Podcast: Play in new window | Download

Reading Time: 2 minutes

In this episode of Intelligent Money Minute, we interviewed Matt Hougan, Chairman of Inside ETFs on the definition of ETF and how they compare to mutual funds. An Exchange Traded Fund (ETF) is a type of security with a collection of securities like stocks and typically tracks an underlying index. Although there are similarities to mutual funds, ETFs have distinct differences that may provide strategic advantages to a portfolio. Matt calls ETFs the modern version of mutual funds and highlights their potential tax advantages. The most significant difference between mutual funds and ETFs is ETFs trade like stocks. During this episode, Matt reveals what he coined the “hidden secret” of ETFs and why they don’t return capital gains.

At Intelligent Investing, one of our four unique factors is to minimize fees, and we believe taxes are another fee that should be minimized. You can learn more about what makes us unique by going to What Makes Us Different. We are excited to be interviewing Matt Hougan, and we have several more episodes where we explore the ins and outs of ETFs, bitcoin, and blockchain, so be sure to subscribe to our podcasts to hear all the interviews.

Matt Hougan Bio

Which Type of Investor Are You?

May 22, 2018 by Hans Blake, CFA, CPA

Reading Time: < 1 minute

South Carolina Business Review Interview

When it comes to investing in stocks and bonds, have you ever given any thought as to your personal investment philosophy or behavior? I recently had the privilege of being interviewed by Mike Switzer on the South Carolina Business Review.

The South Carolina Business Review focuses on news from South Carolina’s business community with interviews of many small business owners and business leaders from around the state. To hear the full five minute interview, click to go to the South Carolina Public Radio website.

Investor Categories

Investors, broadly speaking, fall into one of three categories:

Rational Investors- based on Harry Markowitz’s Rational Man theory;
Irrational Investors- based on behavioral finance which says man is emotional and biased;
A mixture of 1 and 2.

Advisors Are Humans Too

Financial advisors have the same emotions and biases as their clients. Share on X

By understanding the psychological makeup of humans, advisors may be able to better communicate and coach investors to stick to the long-term goals and plans. The problem is that advisors are also humans who have the same emotions and biases as their clients do. We must first understand ourselves, before we can help others… Intelligent Investing believes in behavioral coaching and has three pillars of financial thought that guide our philosophy…traditional finance, behavioral finance, and values-based finance.

Misbehaving 101: OLLI- Osher Lifelong Learning Institute at Furman

February 6, 2018 by Hans Blake, CFA, CPA

Hans has been asked to come give an 8 week course on Misbehaving 101: How to misbehave with your finances. He will share his years of knowledge on investor psychology and how to improve investor behavior to improve investment performance. Behavioral Finance is one of the three financial pillars that Intelligent Investing was founded on. Email us to learn more about joining, or to book one of the Intelligent TALKs with your business or non-profit.

BEF270 Misbehaving 101: An Introduction to Behavioral Finance
Wednesday, 9–10:30 a.m., Herring Center, Campbell (HC004)

Investors are their own worst enemies. In this fun-filled Misbehaving TALK (Teaching and Laughing Keynote) course, we will have fun learning how we are the root of our fears and greed, but we are also the solution. Traditional finance based on textbooks says that man is rational and wants to maximize returns and minimize risk. However, behavioral finance describes man as irrational
and says man is focused more on his losses than his gains. We will explore this bias called loss aversion, and many more biases and emotions we face with our finances. We will discover how
fear and greed can be minimized by understanding when we may face each of these emotions, and how to mitigate them. In this technology filled world, we have information at our fingertips,
yet we still misbehave with our money. The more frequently we look at our portfolios, the higher the probability of seeing a loss, and when we see a loss, we tend to overreact. This course explores the multiple gaps that humans face in order to improve the way they invest and think about money. We will cover the behavior gap, time gap, and risk gap.

The course begins on March 28th and runs through May 16th.

To register online, go to: www.furman.edu/olli