Fear, Not Risk: Rethinking the Equity Premium with Rob Arnott and Ed McQuarrie | Treussard Talks (E12) In this conversation, Rob Arnott (Founder and Chairman, Research Affiliates) and Ed McQuarrie (Professor Emeritus, Santa Clara University) examine why fear—of loss and of missing out—better explains asset pricing than traditional “risk” frameworks. We connect the mechanics and psychology of investing to help sophisticated investors restore clarity and control over portfolio decisions. You’ll hear us cover: Why 20th‑century returns were a potential outlier and what 19th‑century data says about the equity premium Fear vs. risk: separating downside aversion from fear of missing out and why CAPM’s symmetry breaks What challenges “Stocks for the Long Run” as a belief system, and what drives long‑horizon returns Factor investing through a fear lens: value, size, and more Practical portfolio design: Tobin’s two‑fund separation, where TIPS might fit, and limits of target‑date funds Investor behavior in cycles: when fear of loss dominates vs. when FOMO dominates Why this matters now: Many investors implicitly assume an ever‑present equity premium. If fear is the true driver and premiums vary with cycles and starting yields, portfolio choices and client guidance might need to adapt, as historical patterns suggest that investor sentiment can influence market cycles and premiums. Disclaimer: The content of “Treussard Talks” is for informational and educational purposes only and should not be considered financial advice. The views expressed are those of the host and guests and do not necessarily reflect the opinions of Treussard Capital Management or its affiliates. Listeners should consult with their own financial advisor before making any investment decisions. All investments carry the potential for loss, including the loss of principal. For full disclosures, visit treussard.com. Stay Connected Newsletter — Wealth, Empowered: Subscribe Apple Podcasts: Listen to Treussard Talks Learn more: treussard.com