Bridging Financial Planning and Factor Investing with Northern Trust’s Peter Mladina

In this episode, we speak with Northern Trust’s Peter Mladina. Peter has published extensive research in the areas of both financial planning and factor investing. We discuss his work in both areas and brought in our friend and co-host of our The Education of a Financial Planner podcast Matt Zeigler to help us with the questions on the planning side. We cover goals-based planning, modeling human capital, how to think about alpha in a post CAPM world, the future of the 60-40 portfolio and a lot more.

Jump to episode highlights:

02:55 – What Peter has learned from his experience teaching at UCLA
06:48 – What is goals-based planning?
09:11 – How to frame competing purposes in financial planning
12:07 – Building sub-portfolios for individual purposes
18:44 – How to model human capital
23:44 – What makes for a good investing factor?
30:22 – Using factors in a long-only world when they were tested long-short
33:05 – How alpha changes as risk-factor models expand beyond CAPM
35:47 – Is alpha more difficult to generate using a 3 factor model?
40:23 – Key things to look at when evaluating active managers
47:46 – The future of the 60-40 portfolio
54:17 – How Peter looks at rebalancing
59:12 – Active life management

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Originally Posted June 13, 2023 – Bridging Financial Planning and Factor Investing with Northern Trust’s Peter Mladina

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