He Studied Every Bear Market Since 1929 | Ben Carlson on How the Worst Starting Point Still Made 8%

Ben Carlson joins Excess Returns to discuss his new book Risk and Reward and the biggest lessons investors can learn from market history. We cover how to think about risk, inflation, market timing, bear markets, lost decades, diversification, compounding and why surviving volatility is the key to building long-term wealth.Ben's Bookhttps://amzn.to/4dFHsQzBen Carlson on Xhttps://x.com/awealthofcsBen's Bloghttps://awealthofcommonsense.com/Main topics covered:Why risk is hard to define and always involves trade-offsHow vivid risks like sharks and headlines distort investor decision-makingWhy doing nothing can be one of the hardest parts of investingHow inflation should be viewed through personal finance, human capital and long-term investingWhy stocks can be an inflation hedge even if they struggle during inflation spikesWhy waiting for the market coast to clear often failsWhat the world’s worst market timer teaches about saving and staying investedHow loss aversion shapes investor behaviorWhat the Great Depression, bear markets and 30-year returns teach about long-term investingWhy there is no perfect portfolio and the best strategy is one you can actually stick withTimestamps:00:00 Ben Carlson on why risk and reward are attached06:35 Doing nothing, action bias and better investing behavior11:51 Inflation psychology and lessons from the 1970s16:55 Why stocks can hedge inflation over the long run21:07 Why waiting for the coast to clear is a market timing trap26:30 Time horizons, loss aversion and portfolio behavior31:49 Government rescue, left-tail risk and unintended consequences35:54 Recessionary vs non-recessionary bear markets42:09 Why the stock market and economy can diverge47:24 Why compounding is about holding, not trading51:37 Starting valuations, lost decades and future returns55:40 Risk, reward and the biggest lesson for investors