Sound Investing

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

Paul speaks with Dr. Robert H. Pass, host of Pediheart podcast and a pediatric cardiologist at Mount Sinai Hospital, about how to go about funding a newborn child's retirement (in 65 years!) through the magic of index investing, low costs and compounding interest. Learn how you can do this for a child in your life. There are many lessons for all types of investing in this episode. Article Links How $10,000 will help my newborn granddaughter have a better retirement The best gift of all: a financial legacy for a child See also: 'Best in Class ETF's’ at: https://paulmerriman.com/best-in-class-etf-recommendations/ Paul’s previous interviews on Pediheart Podcast: Retirement Investing: https://podcasts.apple.com/us/podcast/pediheart-podcast-191-retirement-investing-with/id1341472214?i=1000546560805 Tips for Funding Your Retirement: https://podcasts.apple.com/us/podcast/pediheart-podcast-146-tips-for-funding-your-retirement/id1341472214?i=1000504041514

This podcast reviews the 2022 returns of the Best-In-Class and Vanguard ETF portfolios as compared to the average shareholder in the recommended equity asset classes. The discussion focuses on what worked, what didn’t work, and what was the impact of the broader diversification of owning only the S&P 500. Paul also considers short, intermediate and long-term government bonds, the Quilt Chart of equity asset classes, the Sound Investing U.S Equity Portfolio (1928-2021), and provides an update on the minimums, free commissions, and ability to trade partial shares of ETFs through both Vanguard and Fidelity. LINKS: B14A Fine Tuning Table for the combination of the S&P 500 and Small Cap Value The latest Table H1 Ordinal Rank Summary

Paul answers some of the most-pressing investment questions posed by Rutgers University engineering students after his recent keynote presentation to 154 of them. View the Keynote Presentation video at: https://youtu.be/8_7ee1Nft7c 1. How do you increase the rate of return on your investments? (1:58) 2. What do you think of using “Robo Advisors” like Schwab Intelligent Portfolios? (6:33) 3. What portion of my investments should be in mutual funds? (11:16) 4. Is there a ‘rule of thumb’ for how much of my income should go into saving and how much I should keep and enjoy now? (13:53) 5. What resources do you recommend to learn about investing? (15:42) 6. What made you go into the industry that focuses on saving and investing? (20:28) 7. What is the biggest investment mistake young adults make? (23:13) 8. What is the best outlet/place to find up-to-date advice on how to invest? (28:55) 9. Is there a mutual fund that doesn’t pay any interest? (34:38) 10. What are the steps to start investing a small amount of money now? (35:20) 11. Do you have advice on how to invest in real estate and how much of your portfolio should be in real estate? (39:04) 12. Do you have suggestions on diversifying a portfolio including real estate hedge funds, private equity, etc.? (42:06) 13. How important is learning about macro-economic cycles in making investment decisions? (43:15) 14. What is the single-most important decision investors make? (46:58)

The purpose of our podcasts is to help investors make some of the biggest investment decisions of their life.  This podcast focuses on the many reasons small-cap value should be in every investor’s portfolio, even if it is a very small part. Paul addresses these questions: 1.  What is the lifetime impact of adding 10% to 20% small cap value (SCV) to a portfolio for first time investors as well as retirees?  2.  What is the additional risk of adding a small amount of SCV to a portfolio? 3.  How can a 2% bigger short-term loss lead to millions more for retirees? 4.  How could a very small investment in SCV help you retire 2 years sooner? 5. How will a small investment in SCV change your cash flow in retirement? 6.  How does SCV perform during periods of high inflation? 7.  How often should you expect SCV be the best and worst investment? 8.  How does SCV perform after major market losses? 9.  How much more or less are you likely make if you don’t rebalance your portfolio? 10.  What is the likely premium SCV is likely to make over the S&P 500 in the future? Links to relevant tables or download pdf of all tables here. Table B1 Fine Tuning Table for S&P 500 Table 14A Fine Tuning Table for S&P 500 and Small Cap Value Table H1  Sound Investing Portfolio results Table C1 Fixed Contribution Table for S&P 500 Portfolio Table C14 Fixed Contribution S&P+US SCV Equity Portfolio Table D1.4 - Fixed Distributions: S&P 500 Equity Portfolio ($40,000/year)  Table D14.4 - Fixed Distributions: S&P+US SCV Equity Portfolio  ($40,000/year)  Sound Investing Portfolios H1 Sound Investing Portfolio results Sound Investing U.S. Portfolio (1928-2021)-Ordinal Rank Summary Tell Tale Chart

How to live the best life you can is the main focus of this conversation between Paul Merriman, Chris Pedersen, Daryl Bahls and Craig Appl, volunteer creator of The Merriman Financial Education Lifetime Calculator. Craig discusses the FIRE movement community and his experience at a Chautauqua Conference about financial independence outside Bogotá Colombia earlier this year. Craig addresses the differences between traditional investors and those focused on earlier retirement (high savings, low cost of living, simple investment portfolios) and how to create more happiness in your life. For more about Craig’s Chautauqua experience, read “How To Prepare for Post-Work Life” by Aysha Griffin Links referenced in the recording: The Chautauqua conference website: https://www.fichautauqua.com/ Financial Independence Resources: - https://choosefi.com/ - JL Collins Stock Series which inspired the book A Simple Path to Wealth https://jlcollinsnh.com/stock-series/ (check your local library for availability) - Millennial Revolution: https://www.millennial-revolution.com/ Quit Like a Millionaire - Alan Donegan's Free Extraordinary Life course: - https://www.alandonegan.com/extraordinary.html - https://www.caniretireyet.com/ - https://thehumblepenny.com/ Books - A Simple Path to Wealth by JL Collins - Your Money or Your Life by Vicki Robin - Your Complete Guide to a Successful and Secure Retirement by Larry Swedroe - Why Does The Stock Market Go Up? By Brian Feroldi - Quit Like a Millionaire by Kristi Shen

Do you want to create a financial legacy for a young person, especially a newborn? This podcast and video explains Paul’s plan for his new granddaughter, which is adaptable by any investor. [Podcast listeners are encouraged to watch the video and/or view the Slides and Tables below]. Paul is joined by Daryl Bahls, Director of Analytics for The Merriman Financial Education Foundation, and Chris Pedersen, Director of Research. Daryl uses “the numbers” to explain possible outcomes and help you assess the variables of a long-term investment plan for the life of a child or grandchild. You will learn: How to create a fund for your grandchild, child, or other youngster you want to help, which can build a lasting legacy. How to put some money aside that can compound tax free or tax deferred for the rest of their life and cause them to likely remain true to your original goals. How this process works, which theoretically is pretty simple. How to consider the personal and variable outcomes of this method. How to use the Tables that simulate for variables. Paul turns over presentation to Daryl around :15 Chris Pedersen joins in around :45 Daryl Bahls—Tables: Slides:  Fund For A Grandchild—How to create a lasting legacy for your grandchild Return Tables: Fund For A Grandchild Read: How $10,000 Will Help My Newborn Granddaughter Have a Better Retirement: https://paulmerriman.com/how-10000-will-help-my-newborn-granddaughter-have-a-better-retirement/

Ever wonder how the “Sound Investing” podcast is funded? Along with all the prolific work produced, over the past decade, by the mostly-volunteer Merriman Financial Education? Paul lays it out in this podcast, including his plans for 2023. Learn how you play a huge part in the how Paul’s retirement plans evolved into the myriad of financial education tools for DIY investors and outreach to university students and professional organizations.  He invites your participation, questions and feedback. If you are not already a subscriber to his free twice-a-month newsletter, or have not downloaded your free pdf and/or audio copy of We’re Talking Millions—12 Simple Steps to Supercharge Your Retirement,  visit https://paulmerriman.com/signup/ 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!

Paul Merriman is a compulsive list maker and his Thanksgiving list is his favorite of the year.  In this podcast, he covers a range of subjects for investors related to real wealth and giving thanks. He describes getting up very early on Thanksgiving Day to spend a few hours listing names of people for whom he is thankful. While many of the people would be unknown to our audience, others are responsible for helping our Foundation reach and be of service to those who find our work helpful.  One such essential behind-the-scenes person is Angela Moore, Senior Editor at Marketwatch.com. Angela is responsible for putting the final touches on the hundreds of “MarketWatch" articles by Paul and Rich Buck. Her kind guidance and care plays an important role in the success of our Foundation reaching and educating investors.  Angela was recently interviewed by Ari Parker on "Legacy—Aging With Purpose.” Listen to her speak about “The Value in Money and Memories" at: https://cms.megaphone.fm/channel/legacy?selected=CAC1135958443. We think you will understand why we feel very fortunate to have Angela as our MarketWatch editor. Paul believes successful investing is largely a long-term series of random events, much as lives can be. To illustrate this point, he recalls an unlikely meeting of a fellow high school graduate as he was standing by himself watching the 1961 "Seafair Parade" in Seattle. That casual conversation ends up being a single step responsible for his Foundation’s work 60 years later. He also shares a single sentence that summarizes the steps young investors should take, inspired by the encouraging responses he received in recently speaking with college students at Rutgers and Western Washington University. Paul suggests this article by Ben Carlson, one of our Foundation’s Truth Tellers  “Who Wants to Be a Billionaire” is an excellent read filled with an interesting list of “real wealth" measurements.  https://awealthofcommonsense.com/2022/11/who-wants-to-be-a-billionaire/    Along this same line, Paul also recommends a book  for anyone in their 20s and 30s seeking to learn the most-important basics of investing. Spending Your Way to Wealth by Paul Heys, a director of our Foundation, does a terrific job of addressing the real wealth we accumulate.  We heartily recommend this book. You can get it at Amazon or—for a discounted copy with a personal autograph—take a look at Paul Heys’ site: https://investorship.com/financial-services-clients/

The first part of this broadcast describes the investment strategy Paul and his wife are giving to their latest grandchild. After Paul describes the strategy, Daryl Bahls, Director of Analytics for The Merriman Financial Education Foundation, shares tables that represent the 95-year potential financial implications of this investment. Then, Chris Pedersen, our Director of Research, Daryl and Paul address the following questions: · What’s the best way to compare the risk and return of different combinations of equity asset classes? · How should someone move a major part of their portfolio from bonds to equities?  Dollar cost average or make a lump sum investment? · Which is better: the 10-fund portfolio or Chris’ 2 Funds for Life? · What kind of problems are investors having at M1 Finance? · What ETFs is Chris considering when he reviews his picks next year? · What kind of returns should we expect from small-cap-value funds in the future? · How should future returns of a globally diversified total market fund, like Vanguard Total World ETF (VT), be compared to the Worldwide 4 Fund Portfolio? · Why do you recommend different ETFs for taxable and tax-deferred accounts? · What do you plan to do to help investors make the best of their 401k investment choices?   See: New Tables by Daryl Bahls: Fund for Granddaughter (R4) No-Nonsense Portfolios 'Quilt Chart' (1970 to 2021) 7-Sound Investing Portfolios (50-50) - 2022 (color) (Paul makes reference to Table H1) Get your copy of: 2 Funds for Life—A quest for simple & effective investing strategies by Chris Pedersen at Amazon (https://amzn.to/3BxTFoM) or other online book sellers.