Dave Ramsey’s Been on the Air for 15 Years!

June 25, 2007

Chris, a Dave Ramsey employee and blogger from PourOut blog, sent me an email this afternoon regarding an announcement. To celebrate his 15th anniversary of being on the air, Dave Ramsey is giving away an iPod every hour of every show this week. Click on the link to find out the details and how to enter to win an iPod.

I don’t always agree with ol’ Dave but I have to respect the fact that he has been on the air for 15 years. That’s pretty amazing. Anyway, head over to PourOut for more information if you’re interested.

13 responses to Dave Ramsey’s Been on the Air for 15 Years!

  1. 15 iPods for 15 years… Coincidence? Uh, yeah, probably so. It’s still cool though. Hey, thanks for the link JLP.

  2. Baba Ghanoush June 26, 2007 at 8:23 am

    15 years sounds about right. You can tell he developed his standard investment advice in the 90’s – he always suggests a Growth mutual fund. You’d think he’d point investors to a low-cost total market index fund or maybe a target retirement fund if he’s going to recommend a single-fund portfolio.

    Don’t get me wrong, I think Dave does a world of good, and if he can get people to “act their wage”, get out of debt and do any saving, then advising them to invest in a just a subset of the market is a small shortcoming in comparison.

  3. Baba,

    There’s no doubt that Dave is set in his ways. However, I think he says what he does in order to simplify things so he doesn’t send out a mixed message. I don’t agree with that but I definitely understand it.

  4. Yo Baba, Dave has always recommended diversification across four types of funds. Sure, they may be what you’d consider the same “style” of fund, but I think you would agree they are all very different in their holdings, earnings potential and risk tolerance. Also, his strategy for investing wasn’t impacted by the 90’s, but was formed by looking at the history of the stock market and the 10-20+ year track records of certain types of funds, i.e. growth, growth & income, aggressive growth and international.

  5. Chris,

    I assumed he set his investment style in the 90s as that’s the last cycle when growth did well. A growth tilt is typical of those who set their allocation then due to recency bias.

    Historically, though, value has outperformed growth. (Try searching for Fama and French’s Three-Factor model.) In particular, small value has outperformed small growth. However, that’s not necessarily a reason to tilt towards value (or growth). There’s some debate as to whether the premiums for value and small caps are a reward for additional risks (apart from market risk) in those sectors, or if ultimately we should expect them to return to the mean. I believe that it’s wiser to hold the market at roughly market weight, except in regards to domestic/intl, where I weight slightly more towards domestic stocks to decrease currency risk. Most important — keep costs and taxes low (index funds).

    But even if Dave were correct that growth outperformed value over time, there will still be long periods of time where growth (or value) underperforms the market — all sectors of the market are down at times. So when Joe Investor is heavily tilted towards growth and his returns are well below the market for 2-3 years, he panics and sells, locking in his losses. This is the real danger of selecting a subset of the market (value or growth, large or small) and heavily overweighting it. If the investor doesn’t understand the variability of the growth sector and have the stomach to ride it out (most won’t), especially when comparing to published market returns, then overweighting them on growth is a disservice.

  6. Also, I know that Dave’s show is not primarily about investing. If he gets too detailed — talking about risk, stock/bond and domestic/intl allocations — he will disinterest a big segment of his audience. And the primary determinant of portfolio size is how much one saves. This is the tough part, and Dave is right on the money here. So I’m focusing on small details with my comments above, and Dave’s getting the really life-changing, big-scale things right.

    I suspect that if someone had detailed investing-related questions (rather than debt/credit issues), Dave would tend to send them to a fee-only ‘endorsed local provider’, which strikes me as the responsible thing to do.

  7. That Baba Ghanoush is one smart dude! It’s like you were reading my mind with that last post.

  8. All the same, I’d love to hear Dave say “a low-cost, total stock market index fund”, like one from Vanguard or Fidelity’s Spartan line, instead of “growth fund”.

  9. I’ve heard Dave recommend the S&P 500 index fund.

    I entered this contest for the ipod. But if I win I’m going to sell it and apply it to some debt. I’m sure Dave would approve!

  10. Forrest Dinnell June 27, 2007 at 8:53 am

    I entered the contest for the ipod so I can listen to music while riding my Harley.

  11. A good thread with the straight dope on Dave’s investment advice… http://www.diehards.org/forum/viewtopic.php?t=4591

  12. Heard a portion of the Ric Edelman show this morning. Ric alluded to some comment Dave Ramsey made about Ric – I believe that Ric is “crazy.” Don’t know context of alleged statement; missed the segment where Ric discussed this in detail. Does anyone know what Dave Ramsey said?

  13. Check this out~for those of us who are Ramsey fans.