Paul wishes to warn podcast listeners that this podcast contains a lot of important numbers from the following 4 tables.  The torrent of numbers can be irritating but these are some of the most important aspects of risk and return we should know.Paul asks that investors email him with questions about the tables.  [email protected] In this podcast Paul introduces a new way to understand and compare the likely risk and return of equity asset classes. The biggest challenge for first time investors is not understanding the likely losing periods they will experience as part of the normal progression of successful investments.  These 4 tables compare the historical risk and return of the S&P 500, Small Cap Value, a 2 fund portfolio that’s 50/50 S&P and SCV and 4 fund portfolio with 25% each in S&P, Small Cap Value, Large Cap Value, and Small Cap Blend.

The biggest challenge of educating first time investors is reaching them with our educational materials. One of the best ways to reach young investors is through young podcasters who have loyal audiences of these first time investors.  Jose and his podcast, Slow Brew Finance is a great example.  It is available both as an audio  and video podcast.  During the presentation Paul mentions a table of returns for the S&P, U.S. large cap value, small cap blend and small cap value. Here is the link. To sign up to Slow and Steady, a bi-monthly email newsletter with bite-sized practical personal finance thoughts and tips https://slowbrewfinance.com/subscribe The topics in this interview include:00:00 - Intro  03:04 - Your Own Small Value Portfolio  07:23 - Value and Quality  10:12 - What if Value Doesn't Work Anymore? 14:47 - International Diversification 19:51 - Momentum 23:14 - Size  27:55 - Market Timing via Trend Following  39:13 - The Key to Becoming a Good Investor 46:42 - Investor Psychology  55:59 - Outro

Paul begins the podcast by noting a recent interview he had with Andrew Giancola of Master Money and the Personal Finance Podcast.  The topic is “Simple Financial Steps With Massive Payoffs.”In this podcast Paul discusses a new study that compares long term returns of the S&P 500 and the 4 Fund Portfolio.  The study was motivated by an article written by Ben Carlson. Paul discusses the same 20 year periods starting in 1930 and compares the results of The 4 Fund Portfolio to that of the S&P 500.  He also makes the case, using one of his favorite quilt charts, that the 4 Fund Portfolio is not only more profitable but is less risky on an annual basis. 

Doc G interviews Paul. "Join me in an eye-opening conversation with renowned investing advisor and philanthropist Paul Merriman as we delve into the question: Is personal finance inherently selfish? In this episode, we explore the broader impact of financial decisions and discuss Paul's recent $3.6 million gift to empower students at Western Washington University through investing education." Listen to more of Doc G on Earn and Invest- https://www.earnandinvest.com/episodes-7/youre-not-spending-enoughhttps://www.earnandinvest.com/episodes-7/testhttps://www.earnandinvest.com/episodes-7/spreading-the-financial-independence-gospel-are-we-preaching-to-the-choir

Topic 1: The industry has responded loudly to an announcement by Dave Ramsey that he would be comfortable about taking 8% a year from a retirement account.  Here is what Rob Berger has to sayIn a recent video answering a caller's question, Dave Ramsey described those promoting the 4% Rule as "stupid," "goobers," and "morons. He described the 4% Rule as stupid and said he's "perfectly comfortable" with an 8% withdrawal rate. In this video, I'll describe his rationale and why I'm "perfectly comfortable" telling him he's wrong. New RetirementFICalcDave Ramsey VideoHere is the latest from Morningstar on withdrawal ratesAnd another good article from Amy Arnott from Morningstar  In my discussion I try my best to explain the real thinking by Dave Ramsey.   Topic 2: “ iShares just came out with target date funds as ETFs.  What are your thoughts on their returns and  their tax efficiency? Topic 3:  Today I listened to my 1st Youtube Paul Merriman video --- your Ultimate Buy & Hold  Update 2023.  Very intrigued by your strategy as I'm also a DIY investor.  Since I'm retired & 62 years old with a wife that will be working for another 3 years, can you direct me towards your more specific information that would be more relevant to my situation?Topic 4:  New study on market timing vs. buy and hold from Vanguard

The following questions were sent from the October 11, 2023 presentation to the NYC AAII Chapter. You can watch the video here- https://www.youtube.com/watch?v=QjFlcDAlH1k Chris Pedersen's section starts at 59:00. Paul and Chris conclude with a Q&A session. If I have a pension and social security that cover my cost of living, is it inappropriate to have 100% of my  long term portfolio in stocks? How should I create a do it yourself target date fund using one of your Sound Investing portfolios?   What are the tax implications of the portfolios you recommend?  Are some better for taxable accounts? Paul, do you invest in any individual stocks?  If not, why not? I have relied on professional managers for most of my life but would like to quit paying the fees to have someone else do it.  How can one feel confident in taking over the management of an account? What about 50% half small cap value and S&P, AND 50% in a target date fund? If I am dollar cost averaging is there a point (size of market decline) at which it would make sense to go ahead and invest it all? Does it make THAT big of a difference if someone lump sums vs dollar cost averaging? which is better/worse? Is there a small cap value emerging markets ETF you recommend for best in class? No investment advisor I know recommends a 100% allocation to small value. More common is a tilt toward the favored factor, say, 80% in the market and 20% in small value. What do you recommend? Do you recommend tax loss harvesting in a taxable account? https://www.whitecoatinvestor.com/tax-loss-harvesting/ https://www.whitecoatinvestor.com/how-to-tax-loss-harvest-a-large-taxable-account/ 12. Does a large cap blend fund that’s equal-weighted compare well with a cap-weighted fund?  

Paul answers 12 questions  from the AAII New York City Chapter October 2023 Meeting The video can be watched here- https://www.youtube.com/watch?v=QjFlcDAlH1k Paul's section begins at 08:40.  The following links are used in this presentation: Table B14B, ETF portfolios,  and SPIVA Report  1.  Do you recommend using index funds for international funds? 2.  Since small cap value underperforms the S&P 500 for long periods of time, should SCV be avoided by those who are nearing retirement?3. I don’t have small cap value available in my 401(k).  Will a small cap blend fund have the same impact?4. How can there be such radical return differences between the small cap value indexes?5.  Are you going to show risk-adjusted returns for the index funds? Treynor ratios?  Sharpe ratios?  Sortino ratios?6.  How does one juggle the choice between investing in a higher expense ratio ETF (example AVUV) compared  to investing in a lower cost index fund?  Would the decision be as simple as going with the lower cost fund?7.  If everyone invests in small cap value funds will that reduce the premium in the future?8.  Some say the SCV premium is declining because private equity companies are taking SCV companies private.  Any truth to the comment?9.  How do I rebalance a target date fund and a small cap value fund?  What gets rebalanced?10. Please recap what the good, bad and ugly of small cap value funds and ETFs.11. How long have you been aware of the small cap value premium?  Did you know about it before they became popular?12.  Fidelity Freedom TDF 2035 has an expense ratio of .7%.  When the expenses are that high does it change your recommendation of adding a small cap value fund?

Paul is interviewed by Andrew Stotz and the My Worst Investment Ever podcast BIO: Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation. After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions. STORY: Paul has had a series of bad investments, and they were all driven by emotions. It wasn’t until Paul got the emotion out of that process that his money started to grow. LEARNING: The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term. Start investing early so that you can benefit from the compounding effect.

I went to the Bogleheads Conference with high hopes I would convince guests that small cap value should be at least a small part of every equity portfolio.  Many respond that they have all the small cap value they need in a total market index like VTI.Why I failed:  I only had 20 minutes, as compared to 45 a couple of days earlier for the NYC AAII Chapter.  I took a dozen slides out of the shorter presentation but still had at least another dozen tables and graphs to address in the 20 minutes.  What I should have done is spend the 20 minutes on one table.  That table is B14B. In this podcast I make the presentation I wish I made at the conference. If you have a friend you think could use the information, please pass it on.

In this week’s podcast I focus on two topics:  The first is the culmination of a 10 year project that just took a giant leap forward.  As you know the mission of our Foundation is  to help do it yourself investors make better investment decisions.  The bottom line is we want to help  them improve their financial future. While it is not addressed in our written mission, it is our desire to have the work continue beyond what the present group of volunteers can provide. That means finding a stable institution or organization  to carry on our work.  The following release from the Western Washington University introduces a new program that will soon establish a financial literacy program that will impact every student who attends WWU.   Over the next 100 years this endowment should help millions of students and their families make better financial decisions. The second topic is about someone I think everyone of our readers should become familiar.  On October 11 I will be speaking to the New York City AAII Chapter and on October 13 the Bogleheads Conference in Rockville, MD.  In both cases I will be speaking on The Good, the Bad and the Ugly aspects of investing in small cap value.  My hope is my presentation will motivate investors to give serious consideration to adding SCV to their portfolio. While I am excited about the opportunity to present our findings, I must admit the work that Ben Felix, one of our Truth Tellers, has done is about the best I have found on the topic.  If you want to see one of the best cases for SCV please watch Ben do his magic.

How Can Mindfulness Help You Reach Financial Independence? Do you want to reduce money anxiety, but don’t know who to trust? Would you like to learn how to set up and manage your own retirement plan? Do you want to know how we create a passive income stream you can’t outlive? If yes, join us and learn how to answer the 4 critical financial independence questions: Am I on track for financial independence? What do I need to do to get on track? How do I design a mindful investing portfolio? How do I manage that portfolio and my income over time through changing markets? Learn more: https://courses.mindful.money/financial-independence-bootcamp Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation. He founded Merriman Wealth Management in 1983, retired from the firm in 2012, and created the Merriman Financial Education Foundation. Everything he does is dedicated to providing investors of all ages with information and tools to make informed decisions for their own best interests. Today, Paul joins the show to reflect on early financial lessons he learned, discuss the current state of financial education, and share the top three decisions everyone must make in their financial lives.

Paul opens with information on the Oct. 11 AAII presentation.  Here is the link to sign up.There was a time when Paul was very critical about target date funds.  But important circumstances made him more accepting of the important value of target date funds.  He discusses why he changed his mind but explains why he still thinks you should build the glide path on your own.He also responds to Ken Fisher’s comments about the small cap and large cap historical returns. In the discussion Paul recommends listeners take a look at the quilt charts that show individual asset class and portfolio annual returns.

Tom Cock and Don McDonald record a daily podcast Talking Real Money and a 2 hour radio show on KNWN (previously KOMO) each Saturday afternoon from 12 to 2.  Last Saturday Don was taking a day off and Tom asked me to join him.  While I was in their studio I asked Tom to join me for a discussion about the challenges of educating  investors as well as giving some advice to  those interested in building a career as a financial advisor.  Here are a few of the topics we discussed: How to teach investors to develop realistic expectations for risk and return Best advice for first time investors Major changes in the financial planning industry How advisors bill for investments under management and those "held away” Robo advisory services Advice to young and older adults who want to get into the financial planning industry Working with Tom is always fun!

Watch the video here. Chris Pedersen and Daryl Bahls join Paul to answer questions from investors of all ages.  1:  I hold a REIT fund in my tax deferred account but have found other funds include REITS.  Am I overweighted in REITS and what should I do about it? 2:  Are all total market index funds created equal?  Should there be meaningful differences in returns? Chris compares the returns of 4 total market funds using Portfolio Visualizer. 3.  I am a 79 year old retiree who wants to use your 2 Funds for Life strategy.  How do you recommend I put my portfolio together?  4.  How would I establish an expected rate of return for the U.S. 4 Fund Portfolio?  5. I’m a young investor with a Worldwide All Value Portfolio.  As I age should I start to transition to a lower risk equity portfolio?  6.  The Avantis funds use a quality factor to produce better returns.  Why don’t all small cap value funds use the quality factor in their selection of companies?  7.  How have real returns of equity asset classes compared to theoretical returns?  8.  I want to carefully build my portfolio to work within my risk limits. My challenge is to decide what period of time represents the kind of losses I’m willing to accept.  If I use the information starting in 1928 or in 1970 the loss exposure is very different.  Which period should an investor use to match their asset allocation to their risk tolerance?  9. Chris, Daryl and Paul discuss the long term implications of the risk and return of a 60% equity and 40% bonds using a  combination of equal percentages of the S&P 500 and small cap value. During the presentation Daryl and Chris reference a new 1928-2022 Fine Tuning Table for an equity portfolio of 50/50 S&P 500 and Small Cap Value.  Daryl introduces a new table that compares the returns from 1928-1969 with 1970-2023 

Financial Feast Pod is a new podcast  focused on simplifying personal finance, with each segment dedicated to understanding and implementing the most important financial decisions.  In this podcast Zach and Kevin interview Chris Pedersen about “2 Funds for Life”. Not only will you learn about Chris’ book but the hosts ask a lot of questions about the Foundation and Chris’ favorite food. Topics: 2 Funds for Life explained Risk and return of 2FFL How to use 2FFL in a 401k To rebalance or not to rebalance Conservative, moderate and aggressive portfolios Why not put all in small cap value What about international small cap value Advantages and disadvantages of hiring an investment manager If you haven't signed up for our weekly Sound Investing newsletter, click here to sign upand for a copy of  2 Funds for Life and We’re Talking Millions Orange County AAI video- (Chris' presentation starts at the 5:20 mark) On July 22, 2023 Chris Petersen made a 2 hour presentation to over 650 AAII members and our Foundation members.  The following is the AAII announcement of Chris’ topics: As investors, we all want to get the best return we can with the least possible risk. We often think of this as an asset allocation problem. Although there is some truth in that, it can only go so far. We still have to take some risk to get a reasonable return, and select specific funds in which to invest. And then, we're still left with the risk of our emotions and behavior. In this presentation, Mr. Pedersen will discuss how portfolio asset allocation, fund selection, and investor behavior impact the returns we get for the risks we take. He'll also show some practical approaches to help us all come closer to being best-in-class in all three of these areas. Attend Mr. Pedersen's discussion and you will learn: How various types of equities and bonds interact to impact risk and reward An objective approach to choosing best-in-class funds for equity asset types The impact investor behavior has on risk and reward, and ways to mitigate or improve it. Chris Pedersen is Director of Research at The Merriman Financial Education Foundation and creator of the 2 Funds for Life investing approach to augmenting target-date funds. He is an engineer by training, and a new opportunity finder by nature. In his work for the Foundation, he develops and maintains a set of best-in-class exchange-traded fund (ETF) recommendations, the customizable Merriman Aggressive Target Date glidepath calculator and regularly contributes to articles and podcasts.  Like the rest of the Merriman Foundation staff, his work is motivated by a genuine desire to learn and help, free of any financial incentives or conflicts of interest. I hope you will forward this presentation to friends and family that are looking for better ways to invest.

The podcast opens with a heads up on an exciting AAII presentation on October 11 at 6:30 EST.  Paul will make a one hour presentation on "The Case for Small Cap Value:  The Good, the Bad and the Ugly.” This presentation will include some interesting new tables that give a new perspective to this productive equity asset class. After Paul speaks, Chris’ presentation will focus on 2 Funds for Life in retirement and how to select the Best In Class ETFs.One of Paul’s favorite Truth Tellers, Ben Carlson, has recently written, "The Luckiest Generation”.  Paul reads highlights from the article.  It turns out “The Luckiest Generation”  faced a lot of serious headwinds.  Then Paul suggests the steps we should take if we aren’t so lucky. The annual SPIVA Report is one of the most important studies in the industry on mutual fund performance.  While many may wish to read the whole report, Paul focuses on the tables on pages 9, 10, 13, 14, 17 and 19.Those who take the time to review this information will hopefully reconsider holding any actively managed funds in their portfolio.  

The podcast opens with Paul reading and discussing Ben Carlson’s recent article on the collapse of bonds,“Everything  & Everyone Underperforms Eventually.”   Paul references a table of returns that compares Short, Intermediate and  Long Term Treasures.   Paul also references a table of Fixed Income Returns during years with S&P 500 loss.  The following short article is referenced in a discussion of Bill Miller and Legg Mason Value Trust's 15 year record of returns ending in 2005.Russel Kinnel Jan 3, 2006  "Bill Miller has done it again, but it was a close call. Miller's  Legg Mason Value (LMVTX) extended its winning streak against the S&P 500 Index to 15 straight years, with a 2005 return of 5.32%. The S&P 500 returned 4.91% for the year. Miller's aversion to commodity producers, specifically energy stocks, meant he had an uphill climb in 2005. In addition, duds like Tyco International   and  eBay (EBAY) added to the challenge. However, big bets on  Google (GOOG) and  UnitedHealth Group (UNH) won the day. Those stocks nicely illustrate Miller's style. He believes that you have to stick your neck out on controversial or at least misunderstood names to beat the market. EBay and Google are bold bets because their multiples are so steep that they need nearly flawless execution to produce good returns for shareholders. Yet, Miller will also buy fallen growth stocks where controversy has frightened off less-secure money managers. Hence, Tyco and UnitedHealth. While his streak against the S&P 500 is a fun way to keep score of Miller's accomplishments, his goals revolve around long-term success versus the market. The consistency of his record helps to keep investors in, but his 10-year return is more impressive. The fund has gained an annualized 15.19% over that period, which is about 6 percentage points per year better than the index. For more perspective on the streak, read Chris Traulsen's Fund Spy column from November 2005." The Long Term Investor – Episode 62 – Investing for Higher Returns with Eduardo Repetto   Rational Reminder – Eduardo Repetto : Deep Dive with Avantis Investors’ CIO – 11/24/2022  Paul recommends investors listen to the following interviews with Eduardo Repetto, the Chief Investment Officer of Avantis Funds.         Bogleheads on Investing (the one w Rick Ferri)  - Episode 43: Eduardo Repetto on factor investing    

On July 22 Chris Pedersen spoke to the Orange County AAII Chapter.  This podcast, as well as one on 8/9/23 (20 Q&As) and another on 8/2/23 (16 Q&As) address questions that arose from the presentation.  This podcast covers a few more AAII questions plus other recent questions.  Topic 1:  What is the difference between investing today vs. 40 years ago?  And how  is  investing likely to be different in the future? 01:11 Topic 2:  Will the new Avantis All Equities Market Value ETF be a good substitute for your Worldwide All Value Portfolio?  7:00 Topic 3:  Do you recommend converting traditional IRA funds to a Roth IRA using the back door Roth IRA strategy?  Paul suggests reading:  https://www.thebalancemoney.com/when-does-a-backdoor-roth-ira-make-sense-4153803  and various articles at The White Coat Investors:  https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/.  14:30 Topic 4:  What is the most important table on your website?  Paul mentions tables at these pages:  https://paulmerriman.com/ultimate-buy-and-hold-strategy/,  https://paulmerriman.com/portfolios-2023-updates/ (most important), https://paulmerriman.com/fine-tuning-your-asset-allocation/,  https://paulmerriman.com/fixed-contributions/,  https://paulmerriman.com/fixed-distributions-2023/ and https://paulmerriman.com/flexible-distributions-2023/.  18:25 Topic 5:  Should a younger investor (20s, 30s, 40s) put TIPs as part of their fixed income or just stick to the Total Bond Market? 22:17 Topic 6:  Can you discuss your recommendations for the bond portion of a portfolio?  For example, how do you decide how much would go with the Worldwide 4 Fund Portfolio?   23:57Topic 7:  Could there be a problem when small cap value funds get too large? 28:02

On July 22, 2023 Chris Pedersen addressed the Orange County Chapter of the American Association of Individual Investors.  At the end of his 2 hour presentation there were many unanswered questions. Our last podcast and video addressed 16 of those questions. In this podcast Paul responds to 20 more of the AAII questions.  1.  How do you feel about using a balanced fund such as Vanguard Wellington in retirement?01:44 2.  I subscribe to your mantra of index funds, keep costs low, buy and hold etc,  Is Merriman Wealth Management your company as well?  I ask because that company espouses buy and hold and market timing and charges “AUM” fees. 14:15 3.  I am a new retiree at 65 and have decided to use the “2 Funds for Life” target date fund with a 10% small cap value portfolio.  Do you recommend the 10% small cap value be split between U.S. and international small cap value funds?  23:30 4.  Is it too late for someone just entering retirement to change their investment portfolio to the 10-Fund Merriman Ultimate Buy and Hold Portfolio?   26:39 5.  What is your impression of a recent Vanguard study that showed a large percentage of investors over 85 with an asset allocation of 100% in stocks? 30:14 6  How about using a technology fund instead of a small cap value funds? 35:00 7.  What are some short term bonds funds you recommend?  Bonds funds discussed VSBSX, VMLTX and VSCSX 39:24 8.  I am 25 years old and have a high risk tolerance.  Would it be okay to be all small cap value and would it be okay to invest 10% of the portfolio in individual small cap value stocks? 41:06 9. I have been using the Merriman 10 fund portfolio for 10 years.  The annual rebalancing takes a lot of time.  Do you recommend I move to the worldwide 4 fund portfolio instead? 43:00 10. I am retired and just took a full distribution from my 401k and invested the cash in a Vanguard Rollover IRA.  I I use one of Merriman's portfolios should I stage my investment over many months or invest it all immediately? 44:45 11.  I currently hold a large amount of cash and want to start investing.  Do you recommend a lump sum investment or dollar cost average over a few months? 48:25   Fine Tuning tables. 12.  Do you think the Avantis All Equity Markets Fund (AVGE) has enough small cap value to compete with the returns of your Worldwide 4 Fund Portfolio? 53:53 13.  How does the Avantis Small Cap Value ETF (AVUV) compare to the DFA Small Cap Value ETF (DFSX)? 56:46 14.  Do you recommend buying individual bonds instead of bond funds? 59:58 15.  Do you recommend moving to a target date fund with a later retirement to get more exposure to equities? 1:02:00 16.  What would happen if one of the Avantis funds closed?  Paul recommends reading this article. 1:03:39 17.  I own VBR (Vanguard Small Cap Value ETF) in a taxable account.  Should I take the tax hit and move the investment in AVUV (Avantis Small Cap Value ETF)? 1:07:00 18.  What is your opinion of holding target date funds or a fund of funds during retirement? 1:10:33 19.  What is the range of Price to Earnings (P/E) ratio of large and small growth and value funds? 1:13:00 20.  I think I need a professional advisor to help me with my financial decisions.  Will the fees I pay be covered by higher returns?  Financial Advisor services. 1:17:21

On July 22, 2023 Chris Pedersen gave a 2 hour online presentation to the Orange County Chapter of the American Association of Individual Investors (AAII).  The title was “Best In Class Fund Selection and Behavior.”  Over 650 people attended the presentation, a record turnout for our presentations.  The video will be available in the coming weeks.  While  Chris answered  many questions during his presentation, there were over 60 questions remaining unanswered.  In this podcast and several to follow Chris and Paul will try to answer all of the questions.  Here are the answers to the first 16 questions: Should investors limit their bond holdings to short term bond funds? Are CDs a good place to park cash right now? Do you think investing in an internationally diversified index fund is a good way to manage currency risk? My wife and I are 70 with our portfolio 75% in cash.  Is now a good time to invest and should we put it all in now or dollar cost average?  Chris mentions a podcast on dollar cost averaging vs lump sum investing by Rob Berger. Dimensional Small Cap Value Fund appears to have less than a 2% return over the last 16 years.  Could that be true? For retired investors wouldn’t it be prudent to apply a market timing system that will protect against a big selloff? How does your Ultimate Buy and Hold Portfolio compare to your other portfolios in terms of risk and return?  Paul mentions Table H1 at this link. Would an investor be better served in a target date fund or managing a simple 3 Fund Bogleheads portfolio?  Paul mentions H1 here as well. Why not put your bond holdings into a diversified stock fund that pays dividends, like the Schwab U.S. Dividend Equity ETF (SCHD)? What is average maturity of the short-term bond funds you recommend? If I don’t have small cap value available in my 401k, should I substitute a small cap blend fund in my 2 Funds For Life portfolio? How does Portfolio Visualizer work on target date funds? Your charts show the possibility of an 81% decline.  Does that mean the fund could see the value fall from $100,000 to $19,000? Please explain the term investment factor. Instead of comparing different market factors, how would you compare the returns of different market sectors? Would you consider producing a factor regression video/course so do it yourself investors could learn to evaluate funds for themselves?

Some of the worst investment advice I know happens to millions of investors each year. Between paying commissions, paying higher expenses,  paying more taxes, being less diversified, and sitting on too much cash, so-called experts encourage investors to hold investments that are built to make as much as 2 to 4 percent less PER YEAR.  Paul uses Tables 1 and 2  to show the impact of making an extra .5 and 1 percent a year.  Click here to view all the tables. He also references information from the annual SPIVA Report  on pages 7, 9, 13, and 19.  He mentions Morningstar risk and return date for the Investment Company of America (AIVSX) and the Vanguard S&P 500 (VFIAX).

Paul announces Chris Pedersen’s upcoming AAII presentation on Saturday, July 22.  The 2 hour Zoom presentation will begin at 8:45 a.m.  Chris will discuss how portfolio asset allocation, fund selection and investor behavior impact the returns we get for the risk we take.  He’ll also show some practical approaches to help us all come closer to being best-in-class in all three of these areas.   The public is invited to attend this webinar.  Please share this information with your family and friends.  The FREE WEBINAR will be live-streamed to your computer or mobile device, but you must register at https://us02web.zoom.us/webinar/register/WN_xYAAhMVnT--qDnipfpaIqQ#/registration   After registering, you will receive a confirmation email containing information about joining the webinar.   Paul mentions a new survey on AI. 45% say they would turn to AI to make financial decisions. Paul mentions AI eliminates wading through 20 advertisements to get to the information you’re after.   Paul mentions his lists of 80 project.  One list of 80 focuses on important Investment lessons. One lesson is figuring out how to deal with the reality that there is always good news and bad on every important economic factor.  In a recent Ben Carlson article, "Good News-Bad New About the Economy” he explores the good  and bad news about the economy, inflation, cost of housing prices, wage growth and unemployment. So what do investors do with this list?  Paul suggests it’s best to ignore the temptation to take sides.   Paul mentions a new fund from Avantis.  The Avantis All Equity Markets Value fund combines U.S. and international small, mid cap and small cap value asset classes.  Will this new fund be a one fund solution for the 5 fund Worldwide All Value Portfolio on Table H102?   Paul suggests investors watch the Morningstar U.S. Barometer style box returns on a daily basis.  The purpose of this exercise is to become aware of the wide swings of the range of equity asset classes over short periods of time.   Paul updates the work of Truth-Teller Tim Ranzetta and his non profit NGPF.org.  Their mission is to have every state require a semester of personal finance as necessary for graduation from high school by 2030.  In the last 2 years the number of states that meet the requirement rose from 8 to 22, with 6 more expected this year.   Paul recommends parents consider ways to help their family and their school district make the move.  Here are ways Tim suggest you can help your family and local schools: Find out what their state is doing about personal finance education. Here's the most up-to-date: https://www.ngpf.org/state-of-financial-education-report/ Find out what their school is doing: https://www.ngpf.org/got-finance/ Advocate at their school using these resources: https://www.ngpf.org/expand-access/ Take an activity from our website and teach in their child's schools: Bean Game is a particularly easy one and very popular: https://docs.google.com/document/d/1MRzOVjYtctMlYpLogKbdc5ZCgBO1b8Rc-FlbGfE5IA4/edit?usp=sharing Paul recommends parents subscribe to one or more of the NGPF regular newsletters:     https://www.ngpf.org/blog/current-events/whats-new-with-investing-2023/

On this week's podcast Paul addressed a couple of very important questions:1. Is there really such a thing as a buy and hold investor?2. What can an investor do to improve their chances of staying the course through all market cycles?3. Many of your portfolios don’t include international equities.  Should investors use portfolios that don’t include any international funds? The following links were referenced in the podcast: https://paulmerriman.com/wp-content/uploads/2023/04/7-Sound-Investing-Portfolios-50-50-2023.pdf SCV vs S&P500 Fine Tuning Tables (2022) Paul also talks about his early 80th Birthday party, it was a magical success.

While the industry generally agrees the most important investment decision is your choice of asset allocation, Paul makes the case that the choice between being a do it yourself investor vs. hiring a professional advisor is much more impactful over a lifetime. Paul discusses the many challenges of both decisions and finishes by showing DIY investors what they should do to be sure they address all of the risks investors accept, with or without a professional advisor. Paul uses ChatGPT as the source to a number of lists. Paul also mentions free books: If You Can by William Bernstein We’re Talking Millions — 12 Simple Ways To Supercharge Your Retirement 2-Funds for Life: a quest for simple and effective investing strategies 101 Investment Decisions Guaranteed to Change Your Financial Future Get Smart or Get Screwed: How To Select The Best and Get The Most From Your Financial Advisor  First Time Investor: Grow and Protect Your Money And for DYI investors to learn the most important investment decisions please visit:  https://paulmerriman.com/bootcamp-for-investors-2023/

Paul starts the podcast with an update on the Bogleheads Conference.  For those who want to see a sample of last years presentations here is a link to all of the 2022 presentations. https://boglecenter.net/bogleheads-university/ For those interested in 2023 Conference, including list of speakers:  https://boglecenter.net/conferences/ For this interested in exploring John Bogles archives: https://boglecenter.net/bogle-archive/ Paul is working on a list of 80 quotes investors might use to remind themselves of the important investment beliefs that keep investors on track.  He asks listeners to send him the quotes that have kept you on track.  Please send to [email protected]. Our Truth Tellers are individuals or organizations that, in our opinion, are committed to helping investors better understand the facts and act in their own best interest. Their work and voice consistently provides useful, evidence-based information and advice, often on topics that we do not cover, and we want you to be aware of them to help you be a better long-term investor. Here is a Truth Teller page for Ben Felix. Ben is  the host of a popular YouTube series.  His over 100 videos are some of the best teaching tools in the industry.  The following are a few samples: Is Investing Risky? Dave Ramsey's Investing Advice Small Cap and Value Stocks Plus  Ben and Cameron Passmore interview other financial experts on their podcast, Rational Reminder.  They have made a special effort to interview many of the academics who have studied the investment process. Here is a wonderful interview with: Prof. Meir Statman: Financial Decisions for Normal People 5:16 Meir defines Behavioral Finance 15:37 The difference between a "normal" investor and a rational one 21:48 Why normal investors like lottery-like assets despite low or negative expected returns 26:24 The downsides to the "consume from dividends but don't dip into capital" rule 32:59 Why dollar-cost averaging is so persistent, when it is well-known to be rationally suboptimal 36:48 What makes strategies like covered calls and structured products so attractive to normal investors 43:19 Why normal wealthy people seek to invest in hedge funds and private equity, despite their questional benefits to a rational investor 48:24 How normal investors should deal with currency hedging in global portfolios 53:03 How behavioral portfolio theory differs from mean-variance portfolio theory 1:00:21 How an optimal behavioral portfolio differs from an optimal CAPM portfolio 1:09:21 How the typical risk-profile questionnaire can be adapted to improve the behavioral dimension of portfolios 1:15:53 How financial advisors can use behavioral finance principles to improve client outcomes 1:17:55 What puts financial advisors in a position to give well-being advice 1:23:27 Meir defines success in his life  

There is no question AI is a hot topic.  I have watched “end of the world” interviews with people who know a lot more than I do about AI.  In a recent poll, noted in The New Yorker, half of A.I. scientists agreed that there was at least a ten-per-cent chance that the human race would be destroyed by A.I.”  I have also watched marketing people use Chat GPT to create very good marketing pieces.   So I thought it’s time to find out how good a source of general and specific investment advice Chat GPT might be.  Will it help people understand the important investment decisions that will lead them to higher rates of return within their personal risk limits.  Will it help them to understand the sources of information that will possibly put more money into the presenters pocket or the investors pocket. Since I recently discussed Dave Ramsey,  the very controversial and very popular guru, I thought it would be interesting to see what Chat GPT would say about Ramsey’s advice. On this podcast I ask Chat GPT: What are the pros and cons of advice from Dave Ramsey?  What is Dave Ramsey's position on index funds vs. actively managed funds? I asked again:  How does Dave Ramsey feel about index funds? Does Dave Ramsey recommend an advisor be a fiduciary? Are all the advisors that Dave Ramsey recommends fiduciaries?   Here are links to what Motley Fool has to say about Dave Ramsey’s advice: https://www.fool.com/the-ascent/personal-finance/articles/dont-follow-this-dave-ramsey-advice-about-getting-out-of-debt/ https://www.fool.com/the-ascent/personal-finance/articles/4-things-dave-ramsey-is-dead-wrong-about/ The following links are to Dave Ramsey’s literature: https://www.ramseysolutions.com/retirement/why-dave-prefers-up-front-fees https://cdn.ramseysolutions.net/media/pdf/daves_investment_philosophy.pdf

Paul starts the podcast encouraging listeners to check out the latest video where Chris, Daryl and Paul answer questions from readers, listeners and viewers regarding the article, podcast and video about the Sound Investing Portfolios 2023 Update. The following are the links that were used in the video: Asset Class Index CAGR Comparison (1927-2023) Table H2 - Sound Investing Portfolios Performance (50-50) - 2022 Table H102 - Sound Investing Portfolios Performance (70-30) - 2022 Paul also discusses a new table that Daryl is building that will show more long term details on U.S. portfolios from 1928-2022.  The discussion includes an interesting comparison of lump sum and dollar cost averaging from 1928-1937.  He also digs into the relative returns of large and small cap value in good times and bad. In the last newsletter there was a section regarding a lawsuit that investment guru Dave Ramsey is facing.  In this podcast Paul makes a recommendation that would eliminate the conflicts of interest Dave may have and provide a much needed service to help investors find the kind of advisor they prefer.  

Paul starts the podcast with a brief discussion about the new “financial Literacy for All Students” project at Western Washington University (WWU).   The Merriman Financial Education Foundation, WWU, and Paul personally, are working together to make this project a reality in the next two to three years. The main topic of the podcast focuses on the returns investors should expect in the future.  Paul reviews the 5, 10, 20, 50 and 80 years ending 2022,as reported by Dimensional Fund Advisors 2023 Matrix Book.  He also reviews the DFA asset class returns from 2000 to 2022.  The period starting in 2000 is used as 1999 was the end of one of the longest market runs in history.  Paul compares both the U.S. and international returns for large, small, value, growth and NASDAQ indices.  The only other tables that are referenced are the 1928-2022 1,15 and 40 year returns.Paul ends the podcast asking listeners to email him ([email protected]) with any questions or comments they have regarding the  recent series of 8 major investor decisions.  These topics were covered in articles, podcasts and videos on the following pages.   Ultimate Buy and Hold Strategy Sound Investing Portfolios Risk and Return History Fine-Tuning Your Asset Allocation Fixed Contributions Fixed Distributions Flexible Distributions The Simple Story About 2 Funds for Life Selecting the Best in Class ETFs

"It’s good to learn from your mistakes.  It’s better to learn from other people’s mistakes.”  Warren BuffettThere are easy choices in the investment process.  Much of the advice we offer is very simple and without much disagreement.  On the other hand there are choices that must come after a thoughtful understanding of long term historical results along with an understanding of your need for return and personal risk tolerance.Jerzy Gregorek says it simply (not about investing).  “Hard choices, easy life.  Easy choices, hard life.”I would make a change in that quote to represent what I know about investment choices.Easy choices, good life.  Hard choices, great life.This podcast is a quick review of  the series of articles, podcasts and videos that address 8 investment decisions that Paul feels require deeper consideration and more statistical information than the simple choices that most people understand intuitively.Here are links to 8 pages that offer the article, podcast, video and tables about the important investment decision each addresses. Ultimate Buy and Hold Strategy Sound Investing Portfolios Risk and Return History Fine-Tuning Your Asset Allocation Fixed Contributions Fixed Distributions Flexible Distributions The Simple Story About 2 Funds for Life Selecting the Best in Class ETFs

I have a number of things on my bucket list.  One is to get "We’re Talking Millions!” in the hands of a million young people.  It would seem an impossible challenge but I know it can be done.  One of the reasons I know it is possible is because one of our podcasts has been opened by 977,088 listeners.  Let’s see if we can take it to a million!   Paul has been writing articles about index funds for decades.  The most read is “30 reasons to fall in love with index funds”.  While the most common advantages are low expenses, low turnover, massive diversification, Paul suggests the #1 reason may be keeping investors as far away as possible from commission-based sales people, con artists and other conflicts of interest typically not associated with index fund providers. Many do-it-yourself investors rely of services that have a large presence on the internet. A wonderful aspect of the internet is the ability to do meaningful due diligence on the reputations of those offering their “special ways” to perform better than index funds.  But can you depend on the information you find on the internet? Paul discusses the services of “search engine suppression consultants.”  These very clever people are wizards at making bad information disappear.  In fact, in many cases their fees are not earned until all the damaging information is totally eliminated.  He reads an example of one such article that claims to address the pros and cons of a well-known investment manager.  The pros are strong convincing points, while the cons are almost the mistakes that we would expect would be found in any firm. Paul also addresses the outrageous life-changing fees teachers are being charged and the work of an unscrupulous sales person who holds himself out as a friend of his community. The bottom line: None of these bad investments would be available through those who supply very low-cost index funds. The low costs don’t leave any room to take advantage of the investor.

Over the last 8 weeks Paul, Chris and Daryl have produced a series of podcasts and videos on 8 of the most important investment decisions investors make.  Along with these podcasts and videos Paul and Rich have written Marketwatch articles on the same topics.  As a part of the discussion of these important decisions Daryl has updated over 200 tables of hypothetical returns that are used to support the recommended conclusions. This week, Ben Carlson, one of our Truth Tellers, has written an article on the inherent weaknesses of  backtesting.  While we have taken steps to minimize the potential problems with backtesting, Paul thinks Ben’s comments are worthy of consideration.  Along with his recent article, “10 Things You Can’t Learn From a Backtest,” we have included links to two of Ben’s past articles on the same topic.  Backtests are Unemotional.  Humans are not.Roughly Right or Precisely Wrong

Paul discusses ways a parent or grandparent might explain 2 Funds for Life to a young adult. In the discussion Paul suggests using the following tables to make a handful of important decisions.Tables 1-4 from his Follow the Math comments- Table 1 Table 2 Table 3 Table 4 Equity Index Returns (1928-2022) to compare the returns of major equity asset classesTable B13 to show what happens when you combine a small amount of small cap value with a mostly bond portfolioTable B14A to show the impact of combining a small amount small cap value with a large cap blend fund The first objective is to help a young investor understand how a target date fund works and why it is likely to provide a reliable source of income for the balance of their life. The second objective is to show a young investor how a small amount of a small cap value fund, along with a target date fund, will likely help build an investment portfolio that will allow them to retire with substantially more income and leave more to their heirs. For the parent or grandparent it will be helpful to watch the videos on Fixed and Flexible Distributions.

If a retired investor has the ability to use a flexible distribution strategy it will likely produce one of the best financial outcomes in retirement.  In this presentation Paul compares the difference in returns and risk between the fixed and flexible distribution strategies.    The discussion compares returns and total distributions for two of the 9 sound investing portfolios.   In the presentation he makes use of the following tables:Table D1.3  Fixed Distribution S&P 500 Equity Portfolio  ($30,000/yr)Table D1.5  Fixed Distribution S&P 500 Equity Portfolio  ($50,000/yr)Table E1.3  Flexible Distribution U.S. 4-Fund Equity Portfolio (3%/yr)Table E1.4  Flexible Distribution U.S. 4-Fund Equity Portfolio (4%/yr)Table E1.5  Flexible Distribution U.S. 4-Fund Equity Portfolio (5%/yr)Table E1.6  Flexible Distribution U.S. 4-Fund Equity Portfolio (6%/yr)For those interested in the historical returns of the 9 portfolios, as well as the complete list of flexible distribution tables:   50/50 Sound Investing PortfolioFlexible distribution tables (50/50 U.S./Intl)Flexible distribution tables (70/30 U.S./Intl)

This podcast is Part 5 OF AN 8 PART series ON THE MOST IMPORTANT INVESTMENT DECISIONS. The discussion addresses the distribution tables that use a Fixed Distribution Strategy of 3, 4, 5 and 6 percent plus annual increases for inflation.  One set of distributions uses the S&P 500 as the equity position while the other uses the U.S. 4-Fund Portfolio (25% each of S&P 500, Large Cap Value, Small Cap Blend and Small Cap Value).The podcast references information on 8 different distributions tables:Table D1.3 Fixed Distributions: S&P Equity Portfolio-initial distribution $30,000 Table D1.4 Fixed Distributions: The same but initial distribution $40,000 Table D1.5 Fixed Distributions: The same but initial distribution $50,000 Table D1.6 Fixed Distributions: The same but initial distribution $60,000 Table D9.3 Fixed Distributions: U.S. 4-Fund Portfolio-initial distribution $30,000 Table D9.4 Fixed Distributions: The same but Initial distribution $40,000  Table D9.5 Fixed Distributions: The same but initial distribution $50,000  Table D9.6 Fixed Distributions: The same but initial distribution $60,000 Also mentioned:  Sound Investing Portfolios ACCESS ALL FIXED Distributions strategies for both 50/50 and 70/30 U.S AND INTERNATIONAL Sound Investing Portfolios

This podcast is the 4th in a series of our series to help do it yourself investors build a lifetime investment strategy.   The  presentation uses the following tables: ⁠Table C1 - Fixed Contributions: S&P 500 Equity Portfolio⁠   ⁠Table C14 - Fixed Contributions: US 2-Fund Equity Portfolio⁠ ⁠ Table C11 - Fixed Contributions: US All Value Equity Portfolio⁠  ⁠ Table C8 - Fixed Contributions: WW 4-Fund Equity Portfolio (50% US/50% Int'l) Topics of discussion How the Fixed Contribution Tables are constructed How to use the tables to select the best equity portfolio How the addition of fixed income will impact the accumulation period The importance of using a combination of more than one equity asset class The long term impact of every additional 10% equity The importance of young investors maintaining good behavior Why declining markets helps during early years of investing

This podcast is the third in a series of seven podcasts that are designed to help do it yourself investors learn how to maximize their return, minimize their risk and increase their peace of mind.  It will be beneficial to listen to The Ultimate Buy and Hold  and Sound Investing Portfolios: The History of Risk and Return (link)  podcasts before listening to this podcast.In this podcast Paul discusses why the Fine Tuning Your Asset Allocation Tables were built and how they can be used to build a portfolio that combines the appropriate equity portfolio for growth with the appropriate amount of bonds to stabilize the portfolio during severe market declines.  While the following link includes Fine Tuning Tables for  all 9 portfolios his discussion focuses on tables B1, B11 and B14.The discussion guides the listener through several very important lessons on each table: The increase of return with additional percentages of equities The higher short and longer term losses likely with adding more equities The much higher  returns and slightly higher risks of portfolios adding value and small cap asset classes. In the discussion Paul references Table H2 for the returns of a $10,000 investment for all 9 portfolios.In the coming podcasts the returns of the 9 Fine Tuning Tables will be used to discover the impact of dollar cost averaging into the portfolios, as well as taking out money to live on in retirement.

In this presentation Paul explores the risk and returns of 8 Sound Investing Portfolios and the S&P 500 for the period 1970 to 2022.   He references 2 sets of tables for portfolios built with all U.S. equity asset classes as well as worldwide portfolios that are 50% each U.S. and international  and 70% U.S. and 30% international.The goal is to help DIY investors understand the likely returns of these portfolios in the good times as well as what to expect when they are out of favor.For those who did not listen to the Ultimate Buy & Hold 2023 Update podcast or view the video it is suggested they do that before listening to this podcast.  For those who have the ability to watch the video it should be easier to follow the numbers.  Plus on the video Chris Pedersen and Daryl Bahls join Paul in the discussion. The tables referenced in the podcast can be found at the following links: https://paulmerriman.com/wp-content/uploads/2022/12/Tell-Tale-Charts-US-SCV-Sep-2021-upd.pdf https://paulmerriman.com/wp-content/uploads/2023/04/7-Sound-Investing-Portfolios-50-50-2023.pdf  https://paulmerriman.com/wp-content/uploads/2023/04/17-Sound-Investing-Portfolios-70-30-2022.pdf

Each year Paul (with the many hours of dedicated work from Director of Analytics Daryl Bahls ) updates and  reviews the latest returns and important lessons from the Ultimate Buy and Hold Portfolio.In this review he references a series of tables including:Table A1-Ultimate Buy & Hold Equity Portfolio (50% US/50% Int’l)Table A2 - Alternative Equity Portfolio Tables (50% US/50% Int’l)Table A101 - Ultimate Buy & Hold Equity Portfolio (70% US/30% Int’l)Table A102 - Alternative Equity Portfolio Tables (70% US/30% Int’l)Table B14A - Fine Tuning Table S&P 500 vs.  US SCV PortfolioFor those listening to this podcast it will likely be useful to review the tables before hearing Paul’s comments.Topics include: Why these tables are important to do it yourself investors. The random returns of the S&P 500. The huge impact of small changes in returns. The unexpected low risk of adding risky asset classes. The impact of rebalancing annually vs. monthly. How several low risk 2 fund portfolios outperform  the 10 fund Ultimate Buy & Hold Portfolio. How likely the future will be like the past. The 2023 Ultimate Buy and Hold video will be coming out later today on YouTube, you can find it here- https://paulmerriman.com/youtube

“Three Keys to Long Term Investment Success” was my presentation at the 9th Annual Retiremeet America Conference.  For those who wish to watch other presenters here is a link to the entire almost 6 hour video. 0:00 Welcome from Tom Cock and Don McDonald 13:17 "Financial Fysics" with Don McDonald 46:16 "Paying for Retirement" with Tom Cock 1:15:00 "The Value of a Financial Plan" with Jason Gentile 1:46:00 "Getting Medicare Right" with Kevin Peterson 2:15:00 "Planning for Long-Term Care" with Barbara Devereaux 2:41:48 "Saving on Taxes in Retirement" with Diana Bacon 3:17:00 "Critical Investing in Retirement" with Paul Merriman 3:49:00 Investing Q&A with Tom Cock and Paul Merriman 4:22:00 "Charitable Giving" with Tayor Cock and Stacie Nemetz 4:30:42 "Navigating Turbulent Markets" with Apollo Lupescu 5:23:00 "What's Next?" with Rebecca Chrichton I would like to encourage our subscribers to also view the presentation by Apollo Lupescu, Vice President at Dimensional Fund Advisors, on “Navigating Turbulent Markets.”

In the coming weeks we will be posting the updated history of equity and fixed income returns for the last  53 and 95 years.  These returns will be used to study the impact of investing in combinations of equity asset classes as well as assuming they are being used in the accumulation and distribution periods of an investor's life.  We must ask the question:  How meaningful are these historical returns?  Ben Carlson, one of our Truth Tellers, has written several articles on the topic. https://awealthofcommonsense.com/2023/03/backtests-are-unemotional-humans-are-not/ https://awealthofcommonsense.com/2017/01/10-things-you-cant-learn-from-a-backtest/

March 1 through March 4, I attended the White Coat Investor Conference (WCICON 2023).  On the 2nd, I made a 2 hour presentation focused on "How to Create and Execute a Lifetime Investment Strategy".  I was thrilled with the turnout and positive feedback.  I also received many questions in the following days.  The following are some of the many questions.  More to come in the future.  It was a wonderful conference.  I want to thank Katie and Jim Dahle for putting on one of the best conferences I have ever attended. Here are the questions addressed on this podcast: 3:40   1.  Why do value companies make more money than growth companies?  The answer includes comments from a 1997 article by Eugene Fama and Kenneth French.  Rethinking Stock Returns https://www.chicagobooth.edu/review/rethinking-stock-returns 14:55  2.  How much small cap value should I add to my target date fund? 19:30  3.  How much small cap value should I combine with my Vanguard Total Market Fund?  In this article Table B14A is referenced.  https://paulmerriman.com/wp-content/uploads/2022/04/SCV-vs-SP500-Fine-Tuning-Table-2022-v0.2.pdf 22:19  4.  What is the difference between the expected long term returns of the S&P 500 (VOO) and the Total Stock Market (VTI)? 25:40  5.  There are a lot of different small cap value funds.  Which one do you recommend at Vanguard? 28:45  6.  Should I put small cap value in my taxable, Roth IRA or 401k?  Larry Swedroe’s, “Your Complete Guide to a Successful & Secure Retirement” is recommended as  a great source of important investment advice.  33:25  7.  What do you think of being all equity all the time?  I mean for the rest of my life. 38:54  8.  I’m 38 and a fairly aggressive investor.  I want to build a do it yourself custom target date fund. While I did not mention our custom ETF Allocation Calculator listeners should check it out. https://paulmerriman.com/custom-etf-allocation-calculator/ 45:55  9.  You have portfolios that are all small cap value and another that is a combination of small and large cap value.  The returns for all small cap value are almost one percent higher.  Why not just use an all small cap value portfolio?  Sound Investing Quilt Charts   49:30  10.  What strategy would you recommend with 5 to 7 years until retirement? More of the WCI questions will be answered in the coming weeks.

In this episode, Paddy has a great chat with Paul Merriman from The Merriman Financial Education Foundation in the USA. The foundation is dedicated to providing financial education to those of all ages. Paul shares his wealth of knowledge from decades of experience from starting his own Merriman Wealth Management after retiring to setting up his foundation. Key topics covered: Investing successfully Equity asset classes Emotions of Investing Hardest thing about investing Maths of investing Follow the history

The following questions were sent to Paul during the 90 minute video presented to Western Washington University alumni on February 10, 2023. 2:38 1. How much more do you get with AVUV which has higher fees than FISVX which is super low cost? Check out:  BOGLEHEADS.ORG/REBALANCING Check out:  whitecoatinvestor.com/portfolio-rebalancing-spreadsheet/ 11:20 2. What are your thoughts on robo advisors and investing? Check out:  whitecoatinvestor.com/top-robo-advisors/// 17:57 3.  I have over $5 million and need very little to live on.  I am 43% equities and 57% bonds.  Is now the time to add more equities to a 60/40 asset allocation.  Check out:  https://paulmerriman.com/fine-tuning-your-asset-allocation/  You will find article, podcast and tables on the page 22:25 4.  I only need to take out 2% a year to meet my cash needs.  Most of my investments will eventually go to children and charities.  Is an 80% or 90% equities position appropriate?  Check Out:  https://paulmerriman.com/2021-fixed-distributions/   For article, tables and podcast 27:00 5.  What are the conditions (time/wealth) that suggest hiring an advisor?  How do you find one? Check out:  https://paulmerriman.com/wp-content/uploads/2013/03/get-smart-or-get-screwed-how-to-select-the-best-and-get-the-most-from-your-financial-advisor1.pdf 31:57 6.  What changes should a 50-something make to boost the returns of a 401k? 35:20 7.  What is your advice for a parent to persuade their adult children to educate themselves about investing? 42:22 8.  What do you mean by rebalancing and what are the tools and strategies you can use to do the rebalancing? 49:36 9.  What do I do with penny stocks that are down 80% to 90%? 51:10 10 What are the relative tax implications of the Total Market Index and small cap value, REITS and large cap value? 56:00 11.  What are the returns of combining U.S. large cap value, U.S. small cap blend, international large cap blend and international small cap value? Check out:  https://paulmerriman.com/wp-content/uploads/2022/06/Sound-Investing-Portfolios.pdf 58:30 12. The Fidelity Target Date Funds have very high expenses.  Should I still use them even though the expenses are higher? 1:01 13. Do you recommend a solo 401k or SEP IRA for a single employer who will never have any employees?  Check out: solo401k.com

Paul leads off with the news that Chris Pedersen's book 2 Funds for Life is now available as a free PDF to people who sign up for our free newsletter at https://paulmerriman.com/signup/. Watch the video here. Chris Pedersen joins Paul to discuss the 2023 update to his Best-in-Class ETF recommendations.  Chris explains the selection process and why the DFA International Value ETF (DFIV) is replacing the iShares EFV fund for the international large-cap blend asset class.  They cover the recommended portfolios, the philosophy they are built on, the asset classes they use, and the specific funds they recommend for each asset.  Chris and Paul then cover several questions that listeners may have about their next steps or alternatives not covered. Through the discussion, Chris refers to the following tools and website content that are now updated to reflect the new recommendations: The Best-in-Class ETF Recommendations page. The Best-in-Class ETF Portfolios. The Portfolio Configurator. The M1 Pies. The Merriman Aggressive Target-Date Glidepath calculator (copy to your Google Drive Account to edit it). The Sound Investing Portfolios Chart.

The following are the Paul’s responses to questions and comments from listeners. 1.  How do active mutual fund managers invest their own money?  Article referenced in podcast: https://ritholtz.com/2023/01/how-do-active-managers-invest-their-own-money/ 2.  Why not use market timing to protect investments from declining markets? 3.  How should I put money into an account when facing important news like the possibility of a government shutdown over the debt ceiling? 4.  Investor has tried unsuccessfully to manage their own money in the past but is tired of paying 1% fee to managers.  What do they need to know or do to take control of the process successfully? 5.  Investor wants to know where he can read  the Wharton/Vanguard study regarding investor returns of target date fund investors vs. non target date fund investors.  Paul discusses the Howard Gold Marketwatch article:  https://www.marketwatch.com/story/millions-of-americans-it-turns-out-are-making-the-right-investing-moves-according-to-studies-11607458791 6.  What’s wrong with speculating with part of a portfolio. 7.  My wife and I have had a hard time saving.  What steps should we take to be sure we are able to save for the future? 8.  What one fund should I invest my childs first IRA?  Paul mentions table B14A to help make the determination.  https://paulmerriman.com/wp-content/uploads/2022/04/SCV-vs-SP500-Fine-Tuning-Table-2022-v0.2.pdf   This table is the most viewed of all Foundation tables over the last year. 9.  Financial advisor claims that the superior long term results from small cap value is due to a very few years of great performance.  The listener wants Pauls response. 10. Parent wants to know how much of child’s IRA should go into S&P 500 and small cap value fund.  Paul once again refers to B14A.

If you’re looking to get started investing wisely for retirement, or want a refresher course in what’s important, watch this broadcast in which Paul Merriman addresses the Washington Society of Certified Public Accountants.   He speaks to issues of trust, pointing out that investing following the math is simple. He illustrates the compelling differences small savings in expenses can make over a lifetime and discusses the major decisions every investor needs to consider.  While it’s easy to be an investor today, there are many pitfalls to be aware of and Paul explains how you can avoid them. Podcast listeners may want to view the video to follow referenced slides. Call To Action! Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and communities, creating more opportunities for all. Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think! Subscribe to our YouTube Channel, and hit the thumbs up, subscribe, leave a comment and share the link with your social media and friends. Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee —at no cost to you—which helps support our financial education projects. Follow us on Facebook, Twitter and LinkedIn Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and  2 Funds for Life: A quest for simple & effective investing strategies; all the profits help support our work. Support our mission by making a tax-deductible donation to the Foundation. Thank you!

How will you thrive in a bear market? Paul Merriman joins Tom Cock, co-host of “Talking Real Money,” for this 90-minute live workshop on “How to Manage a Portfolio in a Bear Market,” jointly sponsored by The Merriman Financial Education Foundation and Apella Capital/Wealth. Includes Q&A from the audience. We suggest podcast listeners watch the video for accompanying slides.  You will learn: • Why you need true diversification • How to avoid decade-long S&P 500 market crashes • How to create & manage a long-term bond strategy • How to create retirement income without expensive and confusing annuities • The biggest risk to the investor Links: Table B1– Fine Tuning Table: S&P 500 Equity Portfolio- https://paulmerriman.com/wp-content/uploads/2022/02/Fine-Tuning-Tables-50-50-2022-1.pdf  Table D1.4 – Fixed Distributions: S&P 500 Equity Portfolio (Conservative) https://paulmerriman.com/wp-content/uploads/2022/12/d1.4.pdf Table D1.3 – Fixed Distributions: S&P 500 Equity Portfolio (Very Conservative) https://paulmerriman.com/wp-content/uploads/2023/01/Fixed-Distribution-Tables-50-50-2022.pdf  Get your free PDF and/or audio of We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement at: https://paulmerriman.com/signup – Tom is regional director of Apella Capital: https://apellawealth.com/ – Talking Real Money: https://www.talkingrealmoney.com/ – The Merriman Financial Education Foundation: https://paulmerriman.com/the-merriman-financial-education-foundation/ – Paul’s website: https://paulmerriman.com/

Join Paul Merriman, Chris Pedersen and Darryl Bahls as they respond to these questions from investors: What can a Do-It-Yourself investor do to prepare his/her spouse/partner for managing retirement investments should the DIY investor die first?  Learn how Paul, Chris and Daryl are each personally preparing for their generally disinterested spouses to take over the investments. How can buy-and-hold investors best face information that challenges them to not trust the market?  Each of the three discuss how they digest daily news. A listener notes his concern that he hasn’t seen enough data to justify using more than the S&P 500 and asks, Where can I access the data for the earlier period? He says that from 2014 through 2022, the S&P 500 has performed better than the Ultimate Buy and Hold Portfolio. He has been able to track performance into the 1990s for the UBH Portfolio but wants to do his own testing on the period prior to 1990. For investors struggling to trust market returns, Paul suggests investors take a close look at Table B14A.  Investors must expect big differences in asset class short-term returns. Note that the S&P 500 outperforms small-cap value 46% of the time with an average 11% better return in those years. On the other hand, the other 54% of the time, the SCV advantage produced over 16% average outperformance. It should come as no surprise that in 2022, SCV beat the S&P 500 by 8% to 14% depending on the average company size and value discount of the small-cap-value asset class. Does Paul still uses the Vanguard Short-Term Corporate Bond Fund (VSCSX) for short-term cash needs? Watch the video of this podcast on youtube- https://youtu.be/nCtEykUXcA0