Sound Investing

The podcast is dedicated to answering questions about:  Target date funds:  “Do you think someone that simply maxes out their retirement accounts with target date funds and total market funds will be “fine”? Selecting a distribution strategy:  What advice can you give to a DIY investor who is trying to decide what to do about how they access their money to live on and how much to take out? Buy and Hold vs. market timing:  I believe in buy and holding  index funds, with low expenses. I don’t think I need to pay an investment advisor to help me do that.  I see the Merriman Wealth Management firm offers buy and hold and market timing services and charges AUM fees.  This is very different from what you suggest on your Foundation website.  What is your relationship with the Merriman firm and what are your beliefs about market timing? All small cap value portfolio:  Do you know investors who are investing 100% of their portfolios in small cap value?  It seems like it might be a smart thing to do with very long term investments for a very young person. Time to start market timing:   I am thinking about using timing with a large amount of new money.  Who do you use for the market timing aspect of your portfolio management?   Flexible vs. fixed distribution strategies:  "I believe you expect that a flexible withdrawal strategy will pay out more money to live on, as well as leave more money to heirs.  Bill Bengen seems to believe that this strategy is not sustainable over the long term even if a person had enough money to accept lower annual withdrawal amounts in market draw downs.  Flexible withdrawal strategies make sense to me but there isn’t much writt en about them.  What am I missing?” The answer to this question includes 4 distribution tables:   Table D1.4 - Fixed Distributions: S&P 500 Equity Portfolio - Conservative ($40,000/yr) Table F1.4 - Flexible Distributions (Conservative-4.0%/yr): S&P 500 Equity Portfolio Table D4.4 - Fixed Distributions (Conservative-$40,000/yr): US 4-Fund Equity Portfolio  Table F4.4 - Flexible Distributions (Conservative-4.0%/yr): US 4-Fund Equity Portfolio  Finally Paul reads four Ben Carlson quotes about the nature of bull and bear markets.  Paul makes reference to a table of annual Price to Earning (P/E)ratios starting in 1871 and another comparing the S&P 500 Price to Book Value from 2000 to 2024.  

Thanksgiving gratitude sets the tone, as personal connections and community support are celebrated. An intriguing discussion emerges around the perception of value in financial markets, highlighted by an outrageous $5.2 million banana art piece. Goal setting takes center stage, showcasing its transformative impact on financial planning, motivating personal strategies tailored to individual values and circumstances. The episode also delves into the intricate balance of risk and return in investments, emphasizing the vital role of financial planners in navigating these challenges.

Brian Barnes, Founder and CEO of M1 Finance, shares insights on revolutionizing portfolio management. He discusses the genesis of M1 and its appeal to buy-and-hold investors, emphasizing tax-efficient strategies and automation. The conversation highlights the advantages of M1's target-date pies over traditional funds, revealing surprising benefits like tax efficiency. Brian also touches on the importance of long-term investing, regulatory safeguards, and the entrepreneurial journey in fintech, offering a holistic view on modern investing.

Chris Pedersen, Director of Research at Sound Investing and a retired engineer, dives deep into the impressive performance of the AVUV fund compared to Vanguard small-cap value options. He explains AVUV's systematic investment approach and introduces the 'rich minus weak' ratio. The discussion also tackles the future potential of AVUV and its active management style. Additionally, Chris addresses key differences between investment strategies like VTI and AVUS, suggesting AVUS could yield higher returns. Tune in for valuable insights on small-cap strategies and market dynamics!

On November 16, 2024 Paul will speak to the L.A. Chapter of AAII via a Zoom presentation.  Here is the link:   2 Funds to Own Forever, and How to Invest in Small CapsIn this podcast Paul addresses 4 major considerations when selecting a small cap value ETF.  His discussion compares the returns, along with 4 major factors, for AVUV, VBR, VB,, VIOV, DFSVX and DFSV.Is gold worthy of a place in our portfolios?  Probably not but Paul talks about his gold position and why bonds are likely a lot better.He also discusses the important decision to choose buy and hold over market timing.  He references the following article from Truth Teller Ben Carlson: Don’t Take Financial Advice From Hedge Fund Managers

Watch the video here.Paul Merriman, a former wealth manager turned financial educator, joins us to share investing wisdom that could reshape how you think about your money.We kick things off talking about portfolio diversification. Paul suggests a simple four-fund strategy that includes large cap, small cap, and value stocks. He says this mix has historically beaten the S&P 500 with lower risk.We then dive into international investing. Paul explains that while adding international stocks doesn't necessarily boost returns, it can help smooth out the ride. He keeps half his equity portfolio in international stocks, even at age 81.Got kids? Paul's got some advice for you too. He tells us about putting money aside for his new granddaughter, aiming to fund her Roth IRA as soon as she can earn income. He breaks down how investing just a dollar a day from birth to age 21 could turn into millions by retirement age. It's a powerful lesson in starting early and the magic of compound interest.We also chat about some common investing mistakes. Paul stresses that young investors often underestimate the power of stocks over bonds for long-term growth. He shares some eye-opening numbers: $100 invested in bonds since 1928 would have grown to about $12,000, while the same amount in small cap value stocks would be worth nearly $15 million.Paul wants you to think of investing as a partnership with businesses. When you buy a mutual fund, you're becoming a senior partner in thousands of companies. At first, your contributions drive most of the growth. But over time, market returns take over, and you become the junior partner to a much larger fortune.We wrap up with Paul sharing his excitement about a 40-hour financial education program he helped create at Western Washington University. It's designed to teach students essential money skills throughout their college years, from budgeting as freshmen to understanding 401(k)s as seniors.Throughout our chat, Paul's message is clear: start early, stay diversified, and think long-term. He believes that with the right education and mindset, anyone can build a solid financial future.4 Fund Combo GuideTable NumbersQuilt ChartsHistorical Risk and Return TablesPortfolio ConfiguratorTimestamps:Note: Timestamps will vary on individual listening devices based on dynamic advertising run times.0:00 Intro to Paul Merriman and podcast topic0:57 Two-fund portfolio strategy3:55 Four-fund portfolio strategy explained5:31 Large cap performance concerns7:06 S&P 500 vs Total Market Index10:59 AI impact on large companies14:43 Market trends and historical performance20:41 International equity in portfolios25:26 ETFs vs index funds29:41 Non-US investor asset allocation38:41 Setting up kids financially43:57 Early investing importance48:37 Common investor mistakes50:25 Investing as business partnership52:51 Evolving financial education landscapeFor more information visit the show notes- https://affordanything.com/550-paul-merriman-the-4-fund-strategy-that-beats-the-sp-500/

The Marriage Kids and Money Podcast is dedicated to helping you do just that. Each week, Andy Hill interviews personal finance experts, millionaire parents and financially independent couples to find out how they achieved their success. He then takes that information and breaks it down into digestible takeaways that will help you win with money. With over 400 episodes and counting, Marriage Kids and Money has been awarded “Best Family Finance Content” by Plutus two years in a row and "Content Creator of the Year". We review everything from how to achieve family financial independence to how to help your kids become future millionaires (who are generous). Paul Merriman shares how DIY investors could become millionaires through a 2 Fund Portfolio and/or 4 Fund Portfolio! GUEST BIO - Paul Merriman When I sold my investment advisory practice, I founded a financial education foundation designed to help do-it-yourself investors of all ages improve their investment returns, at less risk and with greater peace of mind. I am the author of 8 books including "We're Talking Millions! 12 Simple Ways to Supercharge Your Retirement." ⁠Watch the video here.⁠

Investors need to get past marketing and sales pitches to know what they're getting when they invest.  Morningstar is a great place to get that depth. Paul and Chris describe how they each use the free Morningstar tools to evaluate mutual fund and ETF characteristics, such as: * Expense ratios * Liquidity and bid/ask spreads * Geographic focus * Value and size tilts * Financial characteristics * Factor exposures * Number of holdings * Tax efficiency and* Charted historical performance with side-by-side comparisons. Chris also briefly describes how he uses the premium X-Ray feature to compare portfolios with different fund families, including the Best-in-Class ETFs, which he plans to update early next year. For those interested in a more quantitative approach, please take a look at the Bootcamp video Chris created for the Best-in-Class ETF selection process, where he describes how he uses Portfolio Visualizer to quantify fund factor exposures and factor statistics to estimate expected returns.  Here's a link to that video at the time where the Portfolio Visualizer discussion begins:  ⁠https://youtu.be/UaEC-JZYYJA?t=852⁠ Here is the video link for this podcast. https://www.youtube.com/watch?v=rDN3LyEFk3E

Discover the allure of indexing as a magical investment strategy that can lead to significant financial growth. Explore the comparison of Vanguard's small cap value ETFs with newer alternatives, showcasing potential profit avenues. Learn why total market funds from Avantis and DFA might outperform traditional options. Delve into insightful 15-year return analyses across various index types, prompting a reevaluation of your asset holdings. There's even a tease for an upcoming video on leveraging Morningstar for better investment decisions!

Chris & Paul walk through the changes to The Merriman Financial Education Foundation’s relationship with M1 Finance, including affiliate commissions, a new emphasis on accurate messaging, and improved pre-made portfolio shortcuts (M1 calls them Pies). The new Pies now include all of our Sound Investing equity portfolios, taxable and tax-deferred fixed-income portfolios, and 5-year increments of the Merriman Aggressive Target-Date Glide Path allocations.  Chris shows how easy it is to mix them to get the equity and fixed income ratio you want.  He also shows how to approximate intermediate years along the target-date glide path.  Finally, Paul challenges him to create a mix of several different equity strategies, which he demonstrates. Following the demonstrations, they briefly discuss how M1 compares to Fidelity’s offering. They close with a request for listener questions to be used in an upcoming interview with M1 Finance’s founder and CEO, Brian Barnes.  If you have any, please email them to chriskpedersen@gmail.com.   M1-Related Disclosures This podcast and video were recorded on September 12, 2024.  All information is subject to change. The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors. M1 is a technology company offering a range of financial products and services. “M1” refers to M1 Holdings Inc., and its wholly-owned, separate affiliates M1 Finance LLC, M1 Spend LLC, and M1 Digital LLC. If you choose to transfer your account to another broker-dealer, only the full shares are guaranteed to transfer. Fractional shares may need to be liquidated and transferred as cash. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. M1 is not recommending or endorsing this investment by making it available to its customers.