Consuelo Mack is a long time fan of Professor Burton Malkiel and Dr. Charles Ellis. In fact, she had both of them on her show several times. So naturally, she was intrigued when Burt and Charley joined the Rebalance team and took a central role leading the firm’s Investment Committee and helping to design and monitor the firm’s retirement portfolios. These two legendary financial thought leaders are very sought after by financial services companies, university endowments, and pension plans.
What is so special about Rebalance? Ms. Mack decided to dedicate a 30-minute episode to how the firm is part of a new generation of investment advisory companies that leverage technology and innovative business models to provide consumers with fundamentally more attractive and lower-cost retirement investing options.
In this segment, Professor Burton Malkiel and Mitch Tuchman discuss the one investment they recommend above all others:
Consuelo Mack: This week on Wealthtrack, putting your retirement portfolio on autopilot. Financial thought leader Burton Malkiel has teamed up with online investment advisory pioneer Mitch Tuchman to offer retirement portfolios of low-cost index funds that automatically rebalance. Why they believe the combination will lead to smooth retirement landings is next on Consuelo Mack Wealthtrack.
Consuelo Mack: If you had one investment to make in a long-term diversified portfolio, this is assuming we all have long-term diversified portfolios, what’s the one investment we should all have in it? Mitch, do you want to take it first?
Mitch Tuchman: Well actually, why don’t you start, Burt, because I liked your answer to that, and I had a way to hitchhike that.
Burt Malkiel: Well, if I had only one thing that I could buy, I would buy a world equity stock fund. That is, a stock fund that had U.S., that had Europe, that had Japan, that had emerging markets, that had the entire world.
Mitch Tuchman: Okay, so I’m going to hitchhike off of that and I’m going to agree and that is VT…Victor Tom. It’s a global index fund put out by Vanguard. But one of the things that we do for our clients is we say let’s open up a Roth IRA for your child and let’s put $500 or $1,000 in it and just buy VT and for a child, that’s one of the greatest gifts you can give them, not so much an iPhone and not the next crazy outfit. You put it in a Roth IRA and that kid will watch the power of compounding and start to understand how this works.
