Guest: Perth Tolle is the founder of Life + Liberty Indexes, an index company that uses human and economic freedom metrics as the primary factor in its investment process. Prior to Life + Liberty Indexes, she was an advisor at Fidelity Investments in California and Texas.
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Find out why freedom weighting is a powerful way to invest, and how Perth Tolle has quantified freedom for the purposes of international investing with her ETF. This fund was created for investors want a broad emerging markets allocation but don't want to support the worst human rights offenders like China, Egypt, Saudi Arabia, and Russia, etc.
Countries are scored by think tanks including the CATO Institute on three measures:
Rights to Life
Rights to Liberty
Rights to Property
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Perth Tolle, founder of Life + Liberty Indexes, talks about the relationships between human rights and economic freedoms and a country’s market strength. And yes we discussed China.
Guest: Perth Tolle is the founder of Life + Liberty Indexes, an index company that uses human and economic freedom metrics as the primary factor in its investment process.
What effect do greater citizen liberty and economic freedom have on a country's stock market? We’re giving you the breakdown on how Life + Liberty calculates their index. Hear how freedom weighted investing can be a beacon of positivity during tough times.
Disclaimer: This is not a recommendation to buy or sell securities. This episode does not contain any financial recommendations or advice.
Topics and Timestamps
01:43: Life + Liberty Indexes and the mission with the FRDM Index
“We started this company so that people who have an interest in freedom and the benefits of freedom as a foundation for economic growth and societal growth over time can have a way to invest according to those values.” - Perth Tolle
02:30: Index investing: What is it?
03:15: How cultural backgrounds and governments can impact investing habits
05:00: Where does the data come from for the index, and how is it broken down? Think tanks who provide the scoring data include: Cato Institute, Fraser Institute, and the Friedrich Naumann Foundation.
“I break down those metrics into three categories. The rights to life, the rights to liberty, and the rights to property.” - Perth Tolle
07:15: Incorporating economic freedom factors into strategy: “We’re for freedom.”
08:00: The dichotomy of freedoms: How do economic freedoms and human freedoms relate?
“People are the driving force behind an economy in any society. And so if your people are not free to innovate, be creative, and to not live in fear of censorship, arrest, disappearances, or worse, then you’re not going to have as much innovation as you potentially could.” - Perth Tolle
11:20: The Lion King and power dynamics
“You’re either marching towards freedom or away from it.” -Perth
14:00: How does Perth determine which countries are scalable enough to include in the FRDM index?
15:00: Shout out to our friends at Ritholtz Wealth Management, especially to Josh Brown (@reformedbroker) for putting Perth on Emily’s radar. The Ritholtz Mafia puts out some of the best content in finance, from books to blogs to podcasts to their top ranked Alexa Flash Briefing, Market Moment, which we launched.
Recommended reading from Perth’s stack: check out Michael Batnick’s book, Big Mistakes: The Best Investors and Their Worst Investments:
15:40: Building connections and advisory boards - the Fund Board, AKA the Fun Board
19:30: How earned media can help you grow your business. Networking, as always, can help you thrive in the beginning.
22:40: Shining the light on progress: Your investing decisions can be considered charitable in some cases.
23:45: Big stacks of books and recommendations to get you through quarantine.
Books and Podcasts Perth recommends:
Pod: any of Bill Browder’s his many appearances on the podcast Stay Tuned with Preet - e.g. The Death of Sergei Magnitsky (with Bill Browder)
Patrick O'Shaughnessy’s podcast Invest like the Best, episode: Investing During a Crisis with guest Dan Rasmussen of Verdad Capital
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