Questions in Finance

Should You Surf the 2026 IPO Wave?
Kate Holland and Veljko Fotak look at the academic research on Initial Public Offerings, or IPOs. They explain why the first, great trading days are often followed by long-run underperformance and explore what past lessons teach us about the current listing wave. Ultimately, they discuss whether investing in IPOs is a good idea, and what you should do if you really want a piece of the action spanning from SpaceX to the upcoming AI IPO wave.
 
Timeline:
00:00 Should You Ride the 2026 IPO Wave?
04:26 Welcome to Questions in Finance
05:03 Space X, the IPO
18:02 Offer Price, First Trade Price, and Market Pops
24:19 Why Underprice?
36:40 The Long Run, the Slow Decline
44:21 IPO Waves
52:34 Retail Investors Get Their Day
56:49 Decision Time, to Surf or Sit on the Beach?
01:04:13 Kate Loves Summaries
 
Bibliography:
This one is long! The complete list is available at:
https://drive.google.com/file/d/1EEPZaWRCWiY72v0oPa-VOvcHaWL57UPo/view?usp=drive_link
Happy reading!
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.
 
Contact:
Send us your questions at:
Questions@questionsinfinance.com

All Stocks, All the Time?
In this episode, Kate and Veljko look at new research finding that the optimal retirement portfolio allocation is all stocks, no bonds. Is the advice we have been hearing all along, to put a larger and larger slice of our portfolios into bonds as we age, just wrong? Kate and Veljko try to make sense of it all, measuring returns, quantifying risks, and digging out the hard facts.
 
 
Timeline:
00:00 All Stocks, All the Time?
06:07 Welcome to Questions in Finance
06:45 The Team, the Data, the Machinery
11:28 Stocks and Bonds
17:05 Returns and Accumulations
22:18 Risks and Drawdowns
24:06 Behavioral Effects and Panics
26:20 Time Horizons
34:04 International Stocks Over Bonds
36:22 The Death of the Lifecycle
57:11 All Stocks, All the Time, for Everyone
01:12:20 The (Un)Safe Withdrawal Rate
01:18:42 On Balance
 
Bibliography:
Anarkulova, Aizhan, Scott Cederburg, and Michael S. O’Doherty. “Stocks for the long run? Evidence from a broad sample of developed markets.” Journal of Financial Economics 143, no. 1 (2022): 409-433.
Anarkulova, Aizhan, Scott Cederburg, and Michael S. O’Doherty. “Beyond the status quo: a critical assessment of lifecycle investment advice.” SSRN Working Paper (2023).
Anarkulova, Aizhan, Scott Cederburg, and Michael S. O'Doherty. “Long-Horizon Losses in Stocks, Bonds, and Bills.” SSRN Working Paper (2023).
Anarkulova, Aizhan, Scott Cederburg, Michael S. O’Doherty, and Richard Sias. “The safe withdrawal rate: evidence from a broad sample of developed markets.” Journal of Pension Economics & Finance 24, no. 3 (2025): 464-500.
Munson, Lee. Rigged Money: Beating Wall Street at Its Own Game. John Wiley & Sons, 2011.
Bali, Turan G., K. Ozgur Demirtas, Haim Levy, and Avner Wolf. “Bonds versus stocks: Investors’ age and risk taking.” Journal of Monetary Economics 56, no. 6 (2009): 817-830.
Payet, Stéphanie. “Does investing in equity markets bring better retirement income.” OECD Pensions Outlook 2024 (2024): 75.
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.
 
Correction:
After publishing, we received a note from Micheal O'Doherty, noting: "One minor point. The dataset doesn’t come from the (free) “World Bank’s Global Financial Development Database.” It starts from the (proprietary) Global Financial Database (Finaeon), and we did a LOT of data cleaning and supplementing from other sources to put everything together." Our apologies for the mistake!

How Do Stock Markets React to Wars?
In this episode, hosts Kate Holland and Veljko Fotak discuss how wars affect stock markets. Drawing on both existing academic research and historical records, Kate and Veljko discuss how markets tend to initially react negatively, with sharp declines, just as most of us would expect. But those initial sharp declines tend to be followed by “war rallies” and, overall, markets during wars display surprising low levels of volatility—what researchers call the “war volatility puzzle.” The episode includes discussions on winners and losers across sectors, flight to safety, currency markets, oil shocks, and a lot more fun and interesting stuff.
 
 
Timeline:
00:00 How Do Stock Markets React to Wars?
04:49 Welcome to Questions in Finance
08:18 The Real World
13:55 From Main Street to Wall Street
16:49 Rare Disaster Models
28:33 War Risk Is a Priced Factor
32:44 Market Timing
35:11 The Volatility Puzzle
39:40 Winners and Losers
50:11 Flight to Safety
56:32 Goodbye 
 
 
Bibliography:
Cortes, Gustavo S., Angela Vossmeyer, and Marc D. Weidenmier. “Stock volatility and the war puzzle: The military demand channel.” No. w29837. National Bureau of Economic Research, 2022.
Barro, Robert J. “Rare disasters and asset markets in the twentieth century.” The Quarterly Journal of Economics 121, no. 3 (2006): 823-866.
Barro, Robert J. “Rare disasters, asset prices, and welfare costs.” American Economic Review 99, no. 1 (2009): 243-264.
Berkman, Henk, Ben Jacobsen, and John B. Lee. “Time-varying rare disaster risk and stock returns.” Journal of Financial Economics 101, no. 2 (2011): 313-332.
Federle, Jonathan, André Meier, Gernot J. Müller, Willi Mutschler, and Moritz Schularick. “The price of war.” American Economic Review 116, no. 3 (2026): 791-827.
Guidolin, Massimo, and Eliana La Ferrara. “Diamonds are forever, wars are not: Is conflict bad for private firms?.” American Economic Review 97, no. 5 (2007): 1978-1993.
Hart, Oliver, David Thesmar, and Luigi Zingales. “Private sanctions.” Economic Policy 39, no. 117 (2024): 203-268.
Hirshleifer, David, Dat Mai, and Kuntara Pukthuanthong. “War discourse and the cross section of expected stock returns.” The Journal of Finance 80, no. 6 (2025): 3589-3637.
Hirshleifer, David, Dat Mai, and Kuntara Pukthuanthong. “War discourse and disaster premium: 160 years of evidence from the stock market.” The Review of Financial Studies 38, no. 2 (2025): 457-506.
Schwert, G. William. “Why does stock market volatility change over time?.” The Journal of Finance 44, no. 5 (1989): 1115-1153.
Taleb, Nassim N., “Fooled by randomness: The hidden role of chance in the markets and in life,” New York: Texere, 2001.
Tajaddini, Reza, and Hassan F. Gholipour. “Trade dependence and stock market reaction to the Russia‐Ukraine war.” International Review of Finance 23, no. 3 (2023): 680-691.
Wolfers, Justin, and Eric Zitzewitz. “Using markets to inform policy: The case of the Iraq war.” Economica 76, no. 302 (2009): 225-250.
 
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.

Should You Hire a Financial Advisor?
In this episode, hosts Kate Holland and Veljko Fotak weight the costs and benefits of hiring a financial advisor. How much do advisors really cost? Do advisors lead to higher returns? How common is fraud? What are the mistakes people make in selecting advisors—and what mistakes do advisors make themselves? The conversation touches upon those questions and much more and, as always, the discussion is rooted in the latest academic research!
 
Timeline:
00:00 Should You Hire a Financial Advisor?
04:02 Welcome to Questions in Finance
04:39 Retirement Got Complicated
14:28 RIAs, CFPs, CFAs, and More Alphabet Soups
21:37 No, They Underperform
32:54 Yes, Advisors Get Investors from Cash to Stocks
42:34 No, there is Too Much Fraud
44:52 Yes, They Reduce Anxiety
51:10 Yes, They Provide a Variety of Services
55:58 No, Advice is not Customized
01:07:21 So, Who Should Get an Advisor? 
 
Bibliography:
Bergstresser, Daniel, John MR Chalmers, and Peter Tufano. "Assessing the costs and benefits of brokers in the mutual fund industry." The Review of Financial Studies 22, no. 10 (2008): 4129-4156.
Bhattacharya, Utpal, Andreas Hackethal, Simon Kaesler, Benjamin Loos, and Steffen Meyer. "Is unbiased financial advice to retail investors sufficient? Answers from a large field study." The Review of Financial Studies 25, no. 4 (2012): 975-1032.
Cici, Gjergji, Alexander Kempf, and Christoph Sorhage. "Do financial advisors provide tangible benefits for investors? Evidence from tax-motivated mutual fund flows." Review of Finance 21, no. 2 (2017): 637-665.
Egan, Mark, Shan Ge, and Johnny Tang. "Conflicting interests and the effect of fiduciary duty: Evidence from variable annuities." The Review of Financial Studies 35, no. 12 (2022): 5334-5386.
Egan, Mark, Gregor Matvos, and Amit Seru. "The market for financial adviser misconduct." Journal of Political Economy 127, no. 1 (2019): 233-295.
Foerster, Stephen, Juhani T. Linnainmaa, Brian T. Melzer, and Alessandro Previtero. "Retail financial advice: does one size fit all?." The Journal of Finance 72, no. 4 (2017): 1441-1482.
Gaudecker, Hans‐Martin Von. "How does household portfolio diversification vary with financial literacy and financial advice?." The Journal of Finance 70, no. 2 (2015): 489-507.
Gennaioli, Nicola, Andrei Shleifer, and Robert Vishny. "Money doctors." The Journal of Finance 70, no. 1 (2015): 91-114.
Guercio, Diane Del, and Jonathan Reuter. "Mutual fund performance and the incentive to generate alpha." The Journal of Finance 69, no. 4 (2014): 1673-1704.
Linnainmaa, Juhani T., Brian T. Melzer, and Alessandro Previtero. "The misguided beliefs of financial advisors." The Journal of Finance 76, no. 2 (2021): 587-621.
Stoughton, Neal M., Youchang Wu, and Josef Zechner. "Intermediated investment management." The Journal of Finance 66, no. 3 (2011): 947-980. 
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.

What Ten Geopolitical Trends Are Shaping Tomorrow’s Markets? With William Megginson
What do financial economists make of the current geopolitical landscape? Hosts Kate Holland and Veljko Fotak, along with today's guest Bill Megginson, talk about the current state of geopolitics. They discuss tariffs, climate change politics, the internal political dynamics of China, Canada, and Russia, as well as newly emerging peace in the Middle East. And more, spanning the rearmament of the West, the increasing role of state ownership, the burgeoning space economy, and the projected impact of AI on global finance. Concluding with demographic trends and their potential to reshape the global economic landscape, this episode provides an overview of the most pressing geopolitical trends investors should be aware of.
 
Timeline:
00:00 Welcome to Questions in Finance
00:37 Introductions
10:17 Trend One. A New Tariff Regime
15:48 Trend Two. Climate Politics
21:02 Trend Three. Political Change in Canada, Russia, China, Israel
42:00 Trend Four. Peace in the Middle East!
50:06 Trend Five. Re-armament of the West
58:35 Trend Six. Europe's Ghosts
01:00:57 Trend Seven. The Re-emergence of State Capitalism
01:05:41 Trend Eight. The Space Economy
01:11:57 Trend Nine. AI is Taking Over the World
01:23:54 Trend Ten. Demographics Destiny?
01:31:34 Kate's Fear, Airborne Viruses and Pandemics
01:35:17 The Short Version...
  
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.
 

How Does Policy Uncertainty Affect Investments?
In this episode, university professors Kate Holland and Veljko Fotak explore academic research on the impact of policy uncertainty on investment decisions, markets, and firms. The episode underscores that high levels of policy uncertainty tend to depress corporate investment, hiring, and economic growth, as firms delay major expenditures. The conversation spans equity markets and higher risk premia, as well as 'flight to safety' effects in bond markets and the crucial question: Why are markets seemingly not reacting to the high levels of uncertainty in the summer of 2025?
 
Timeline:
00:00 How Does Policy Uncertainty Affect Investments?
06:01 Welcome to Questions in Finance
06:39 Defining and Measuring Policy Uncertainty
07:45 Economic Policy Uncertainty Index (EPU)
11:53 Historical Context and Validation of the EPU
16:47 Corporate Reactions to Policy Uncertainty
24:08 Impact on Mergers and Acquisitions
26:14 Research and Development During Uncertainty
30:14 Policy Uncertainty and Equity Markets
38:00 What is NOT Happening in 2025
47:42 Uncertainty and Bond Markets
49:39 Flight to Safety Mechanism
58:10 Political Uncertainty and Option Markets
59:06 Summary and Final Thoughts
 
Bibliography:
Atanassov, Julian, Brandon Julio, and Tiecheng Leng. "The bright side of political uncertainty: The case of R&D." The Review of Financial Studies 37, no. 10 (2024): 2937-2970.
Azzimonti, Marina. "Partisan conflict and private investment." Journal of Monetary Economics 93 (2018): 114-131.
Baker, Scott R., Nicholas Bloom, and Steven J. Davis. "Measuring economic policy uncertainty." The Quarterly Journal of Economics 131, no. 4 (2016): 1593-1636.
Bianconi, Marcelo, Federico Esposito, and Marco Sammon. "Trade policy uncertainty and stock returns." Journal of International Money and Finance 119 (2021): 102492.
Bonaime, Alice, Huseyin Gulen, and Mihai Ion. "Does policy uncertainty affect mergers and acquisitions?." Journal of Financial Economics 129, no. 3 (2018): 531-558.
Boutchkova, Maria, Hitesh Doshi, Art Durnev, and Alexander Molchanov. "Precarious politics and return volatility." The Review of Financial Studies 25, no. 4 (2012): 1111-1154.
Brogaard, Jonathan, and Andrew Detzel. "The asset-pricing implications of government economic policy uncertainty." Management science 61, no. 1 (2015): 3-18.
Gulen, Huseyin, and Mihai Ion. "Policy uncertainty and corporate investment." The Review of Financial Studies 29, no. 3 (2016): 523-564.
Hassan, Tarek A., Stephan Hollander, Laurence Van Lent, and Ahmed Tahoun. "Firm-level political risk: Measurement and effects." The quarterly journal of economics 134, no. 4 (2019): 2135-2202.
Julio, Brandon, and Youngsuk Yook. "Political uncertainty and corporate investment cycles." The Journal of Finance 67, no. 1 (2012): 45-83.
Kelly, Bryan, Ľuboš Pástor, and Pietro Veronesi. "The price of political uncertainty: Theory and evidence from the option market." The Journal of Finance 71, no. 5 (2016): 2417-2480.
Leippold, Markus, and Felix Matthys. "Economic policy uncertainty and the yield curve." Review of Finance 26, no. 4 (2022): 751-797.
Nguyen, Nam H., and Hieu V. Phan. "Policy uncertainty and mergers and acquisitions." Journal of Financial and Quantitative Analysis 52, no. 2 (2017): 613-644.
Pastor, Lubos, and Pietro Veronesi. "Uncertainty about government policy and stock prices." The Journal of Finance 67, no. 4 (2012): 1219-1264.
Pástor, Ľuboš, and Pietro Veronesi. "Political uncertainty and risk premia." Journal of Financial Economics 110, no. 3 (2013): 520-545.
Wang, Junbo, Chunchi Wu, Xiaoguang Yang, and Ye Zhou. "Policy uncertainty and corporate bond issuance costs." Review of Quantitative Finance and Accounting (2025): 1-42.
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.
 

Can You Invest Like Warren Buffett?
 
In this episode of 'Questions in Finance,' hosts Kate Holland and Veljko Fotak chat about the life and investment philosophy of Warren Buffett, exploring his journey from a young investor to the sixth richest man in the world. The discussion covers his unique approach to investing, the four pillars of his success, and the lessons learned from both his hits and misses in the investment world. Kate and Veljko also reflect on what makes Buffett special and whether his investment strategies can be replicated.
 
Timeline:
 
00:00 Can You Invest Like Warren Buffett?
03:13 Welcome To Questions in Finance
09:32 The Four Pillars: Buffett's Main Investments
14:24 Public vs. Private Holdings: A Financial Overview
21:00 Buffett's Investment Hits and Misses
27:53 Buffett's Political and Financial Maneuvering
30:55 The Williams Energy Rescue
37:40 Cash Reserves and Market Outlook
46:14 Characteristics of Buffett, a Successful Investor
52:12 Journalists' Take on Buffett
54:04 What Makes Warren Buffett Special?
01:00:17 Warren Buffett's Quotes
01:06:42 Let's Summarize Our Warren Buffett Discussion
01:11:27 Buffett is Passing on the Reins to Greg Abel
 
 
Soundtrack:
 
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.

Should Space Be Privatized? With William Megginson
In this episode of 'Questions in Finance,' Kate and Veljko explore the space economy with Bill Megginson, Professor and Price Chair in Finance at the University of Oklahoma. They discuss the history, financing, and future prospects of space exploration, focusing on the pivotal roles played by private enterprises like SpaceX and government entities such as NASA. The conversation highlights the dramatic reduction in launch costs, the rise of satellite technology, and the competition between the US and China. They delve into the financing challenges of space ventures, the impact of venture capital, and the broader economic implications, touching on topics from military applications to the pursuit of knowledge and technological spinoffs. The episode concludes with insights into the future roles of commercial and government sectors in space activities.
 
Timeline:
00:00 16 Psyche and Quadrillions of Dollars
07:44 Spaceflight Economics
10:19 Today's Guest, Bill Megginson
11:03 Should the Spaceflight Economy be Privatized?
15:02 Dogs. And Cats.
16:17 Basics and Stats of the Space Economy
21:23 A Bit of History
27:17 Costs and Benefits
35:06 Private-sector Efficiency, SpaceX
45:08 From the Outer Space Treaty to Artemis
49:13 The Race to Mars
53:58 Space Force!
59:44 Venture Capital in Space
01:10:55 Space Mining, Technology Transfer
01:19:16 Space Jobs
01:34:00 The Geopolitics of Space
01:41:26 Summarizing
 
Bibliography:
Megginson, William L. "The Financial Economics of Spaceflight." Available at SSRN 4901992 (2024).
Weinzierl, Matthew. "Space, the final economic frontier." Journal of Economic Perspectives 32, no. 2 (2018): 173-192.
 
Other Sources:
Bureau of Economic Analysis data on the Space Economy: https://www.bea.gov/data/special-topics/space-economy
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.

Who Paid for the 2018 Trade Tariffs?
In this episode of 'Questions in Finance,' Professors Kate Holland and Veljko Fotak discuss the academic research on the impact of the 2018 US trade tariffs. The conversation revolves around who ultimately paid for these tariffs—US consumers and importers—and the nuanced effects on retail prices. The discussion covers the impact of retaliatory tariffs on US exporters, before focusing on the winners—select US producers and the government, raising more revenue. The episode also explores the political implications, revealing how tariffs were strategically used to gain votes in battleground states and the broader economic consequences, including substantial redistribution of wealth and small net losses for the aggregate US economy. The episode concludes with a mapping of lessons from the past to the trade war emerging in 2025.
 
Timeline:
00:00 Who Paid for the 2018 Trade Tariffs?
00:52 Welcome to Questions in Finance
01:31 The Three Papers
05:24 A Bit of Recent History
12:36 So... Who Pays?
16:03 Currency Adjustments
18:06 Retaliatory Tariffs
24:35 Import Prices Vs. Retail Prices
32:09 Quantifying the Impact of Tariffs
45:30 Summary of the Main Findings
49:31 The Political Effects
57:19 Future Episodes
58:01 Mapping What We Learned onto the Present
01:05:32 Concluding Remarks
 
Bibliography:
Amiti, Mary, Stephen J. Redding, and David E. Weinstein. "The impact of the 2018 tariffs on prices and welfare." Journal of Economic Perspectives 33, no. 4 (2019): 187-210.
Cavallo, Alberto, Gita Gopinath, Brent Neiman, and Jenny Tang. "Tariff pass-through at the border and at the store: Evidence from us trade policy." American Economic Review: Insights 3, no. 1 (2021): 19-34.
Fajgelbaum, Pablo D., Pinelopi K. Goldberg, Patrick J. Kennedy, and Amit K. Khandelwal. "The return to protectionism." The Quarterly Journal of Economics 135, no. 1 (2020): 1-55.
Feng, Chaonan, Liyan Han, and Lei Li. "Who pays for the tariffs and why? A tale of two countries." (2023). SSRN Working Paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4477985
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.

Is a U.S. Sovereign Wealth Fund a Good Idea?
In this episode of 'Questions in Finance,' hosts Kate Holland and Veljko Fotak are joined by guest expert William Megginson, Professor and Price Chair in Finance at the University of Oklahoma, to discuss the concept of Sovereign Wealth Funds (SWFs). The conversation centers around a recent proposal for the creation of an American Sovereign Wealth Fund, initiated by an executive order from Donald J. Trump. Bill Megginson provides an in-depth exploration of what SWFs are, why countries establish them, and the various types that exist. The episode also debates whether a U.S. SWF is a good idea, considering both potential benefits and significant drawbacks. The discussion includes historical performance of SWFs, potential political interference, and alternative ways the U.S. could use its resources for economic and strategic purposes.
 
 
Timeline:
00:00 Is a U.S. Sovereign Wealth Fund a Good Idea?
01:36 Welcome to Questions in Finance
02:14 Introducing Today's Guest, Bill Megginson
08:03 A U.S. SWF? 3 out of 10!
09:08 SWF Definition and Purpose
22:11 SWFs, Strategic Funds, Stabilization Funds
27:22 SWF Underperformance
29:37 Political Distortions and Intergenerational Wealth
40:38 Industrial Policy
45:31 A U.S. SWF? How?
58:31 Issuing Bonds to Fund a SWF?
01:05:43 Government-Owned Venture Capital
01:15:46 Autocrats, Democrats, and SWFs
01:16:52 Space Economics!
01:18:29 Summary
 
Bibliography:
Bortolotti, Bernardo, Veljko Fotak, and William L. Megginson. "The Sovereign Wealth Fund discount: Evidence from public equity investments." The Review of Financial Studies 28, no. 11 (2015): 2993-3035.
Holland, Kateryna. "Government investment in publicly traded firms." Journal of Corporate Finance 56 (2019): 319-342.
Megginson, William L., Xin Yue Zhou, and Robert L. Gholson. "The case against a U.S. Sovereign Wealth Fund." Financial Review 60, no. 1 (2025): 5-12.
 
 
Other Sources:
Stephen Jen in the Financial Times, February 17, 2025, "Don’t dismiss Donald Trump’s idea of a Maga SWF"
https://www.ft.com/content/de289862-d5eb-4376-9c4a-d6e08b6b324b
 
White House SWF Order:
https://www.whitehouse.gov/presidential-actions/2025/02/a-plan-for-establishing-a-united-states-sovereign-wealth-fund/
 
 
Soundtrack:
The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.