Nobel Laureate Dr. Robert C. Merton Joins Gregg Fisher's ?The Q Factor' Podcast to Sound Alarm on Retirement Funding
Gregg Fisher, Portfolio Manager and Head of Research at investment management firm Gerstein Fisher, recently launched ?The Q Factor,' a podcast series consisting of conversations with leading quantitative thinkers from all corners of our economy who explore the remarkable ways in which data and quantitative analysis are shaping the modern world. His latest guest, Dr. Robert C. Merton, who received the Nobel Prize in Economics in 1997, sounds the alarm about what he sees as the next great financial crisis: retirement.
On ?The Q Factor,' Dr. Merton discusses his early career as well as his pioneering use of data on pricing derivatives with Myron Scholes. He and Mr. Fisher move on to discuss the definition of a good retirement, the myths of return assumptions, the importance of saving, and how the move to defined contribution plans from defined benefits plans has affected the retirement calculus. He also notes a fundamental misunderstanding on the part of would-be retirees, propagated in large part by the financial industry.
"When it comes to retirement, some people think that in the long run they don't really have risk in the equity markets, and that if they stay around long enough, stocks will surely realize the returns expected from them, and thus, be enough to retire on," says Dr. Merton. "But look at Japan--a large, stable wealthy country, its stock market is 42% lower today than at its peak... 29 years ago. There's nothing that guarantees equities will go up-- let alone realize their expected return---even over a generation. You might respond that over the long term US stocks have always outperformed, but the U.S. has been a special case over the last hundred years. If you know for sure which country will be the leading global economy in a hundred years, then by all means invest in that stock market, but I think a more measured approach based on real data is the way forward."
Guests on ?The Q Factor' have included innovators, politicians, and business leaders, but the format is not limited to any discipline. As a pioneer in data-driven investment strategies, Gregg is interested in exploring any field or discipline where data is changing and shaping the conversation. Upcoming guests include Andrew Ang, Head of Factors, Blackrock; Satish Tripathi, Data Scientist and President, University of Buffalo; and Jesse Redniss, Chief Data Officer, Turner. Past guests have included Ethan Roeder, National Director for Barack Obama's presidential campaigns (Data Meets the Midterms); and Anne Milgram, former Attorney General of New Jersey (Finding Justice Through Data).
"With ?The Q Factor,' I am exploring how big data and quantitative analysis have been upending every aspect of our world with the people at the forefront of this movement," says Mr. Fisher. "I believe we all become smarter, and better investors and citizens as we see these tides of change more clearly."
You can listen and subscribe to ?The Q Factor' on Google Play, Apple Podcasts, Spotify, and Stitcher.
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