Rank #1: What you probably don’t know about Paul Merriman
In this interview with financial advisor Joshua J. Sheats, of Radical Personal Finance, Paul speaks of his early ventures on Wall Street and in manufacturing, what it was like to build an advisory firm in the 1980s, his life’s challenges, and the goals, affirmations and philosophies that continue to motivate his work with the financial education foundation he started upon retirement in 2012.
Aug 08 2018
Rank #2: 10 Q&A for investors trying to do the right thing
From first-time investors to those on the verge of retiring with millions of dollars in savings, Paul's answers to questions from our listeners and readers contain something of interest for every investor.
1. How different is the new secret strategy from what you are recommending now?
2. Why would anyone want to take the risk of investing in the market at these levels?
3. Do you have specific fund recommendations for your World Wide Equity Portfolio?
4. What are the most important variables that help you select the best in each equity category?
5. Where can I get a combination of high quality tax advice along with investment advice?
6. Why don’t you offer portfolios using the Vanguard Admiral Funds?
7. Why do you have a tax-managed fund inside of a tax-deferred portfolio?
8. Where can I find out about all the tax implications of mutual funds?
10. Some of your return numbers don’t add up. Can you explain why one return is 50% less than another for exactly the same investment?
Aug 29 2018
Rank #3: 2 Funds For Life
A simple strategy to maximize your retirement investments
In this podcast, Paul Merriman and Chris Pedersen – who spent most of the last two years developing the “2 Funds for Life” strategy – discuss the rationale, research, details and benefits to easily implement this simple strategy.
The discussion includes a quick review of the “Three greatest investment products” (podcast and article including mutual funds, index funds and target date funds, with a special emphasis on the reasons TDFs don’t give investors the best options and the best returns. Chris explains the steps he took to research the possible ways to simplify the investment process without giving up the extra returns the portfolios should produce. His focus was to understand the risk (worst case for losses) and the high/low and average returns expected for 9 different combinations compared to the risks and returns of holding only a traditional target date fund. Listeners and viewers will see a group of very simple strategies that can add 25% to 100% more to the traditional target date fund. While the “2 Funds for Life” strategies are more risky, most investors will likely be comfortable with the additional risk.
Please note: This presentation reviews a lot of numbers and the most effective way to review the information is to watch the video that includes all the tables. For those who listen to the podcast, Paul and Chris, have tried to highlight the most important results. Paul suggests those who listen to the podcast will better understand the recommendations if they also read the in-depth article by Chris.
To access graphs, articles and other links referenced in this podcast, click here.
To view this presentation as a video, click here.
Oct 24 2018
Rank #4: Paul’s best investment advice for first time investors
In this special podcast, Paul discusses his list of “A Dozen Million-Dollar Decisions.” This advice for college students was recorded this week for students at Western Washington University, Paul’s alma mater and where The Merriman Financial Education Foundation funds the development and presentation of Personal Investing 216, an accredited course since 2014. The 12 Decisions include: saving vs. spending, stocks vs. bonds, degrees of diversification, taxes, expenses, target date funds, and more
For young investors to better understand equities (stocks) and fixed income (bonds), see these Tables Here also are some sites that appeal to young investors trying to deal with the realities of student debt and transitioning to the "real world" while maintaining a budget that leaves room for some saving:
Feb 19 2019
Rank #5: The three greatest investment products – Part I
This is the first of a three-part series, laying the foundation for the upcoming “2 Fund for Life” strategy. In this podcast, Paul discusses the mutual fund, index fund and target date fund, which have been responsible for some of the greatest wealth building for the average investor. In the case of the mutual fund and the index fund, Paul talks about the advantages and disadvantages of each. In the case of the target date fund, he focuses on the advantages. The next in the series (in two weeks) will cover the advantages and disadvantages of the target date fund.
Sep 26 2018
Rank #6: Best-in-Class ETF Portfolio Recommendations: 2019 Update
In this special podcast Paul interviews Chris Pedersen about the 2019 changes to the Best-In-Class ETF Portfolio recommendations. This will be helpful to those who want to understand the details of how Chris made the decisions to select the best in each asset class, changing many from the previous year. The discussion includes comparing the long-term results of these recommendations vs. Vanguard ETFs, as well as DFA mutual funds.
• To read the article and tables supporting Chris’ decision-making process, click here His article also answers many of the most commonly asked questions regarding our Best-In-Class recommendations.
• Click here to see the newly recommended ETF Portfolios.
• To implement these portfolios using M1 Finance commission-free services, Click here.
Mar 06 2019
Rank #7: 10 more things you need to know about the Ultimate Buy and Hold Strategy
The annual Ultimate Buy-and-Hold Strategy article and podcast are among the most important pieces Paul and Rich produce (with a lot of help from Daryl Bahls in creating the updated tables). This podcast addresses topics not covered in the Marketwatch article. Paul answers such questions as: Are returns reasonable? What is the impact of annual and monthly rebalancing? What is the impact on the return if the portfolio is not rebalanced? What are the main differences between UBH strategy and the most prominent/popular Vanguard strategy? And what decisions should you make regarding the balance of U.S. and international equity holdings?
Here are links to relevant tables:
50/50 Ultimate Buy-and Hold table
Ultimate Buy-and-Hold Portfolio (50/50) without rebalancing
70/30 Ultimate Buy-and-Hold table
Mar 20 2019
Rank #8: The most important lesson from “Save $1000 a year. Retire with millions”
Paul begins this podcast in response to tough critiques from some readers about this very popular article and podcast. He speaks to what he thinks are the most important lesson for investors.
He also answers 4 Q&As from readers and listeners.:
- Will you create recommended portfolios for popular HSAs?
- What asset allocation do you recommend for endowment funds?
- Do you recommend an All-Value Portfolio for 47-year-old investor?
- I’m moving to your Ultimate Buy-and-Hold Portfolio; should I invest everything at one time?
Apr 04 2018
Rank #9: Q&A for DIY and Professionally-Advised Investors
In this podcast, Paul addresses these questions from his listeners and readers.
- As investors age, how do they make the conversion from equities to fixed income?
- How does a saver make the transition to being a spender?
- Where can I find a professional, who bills by the hour, to help me evaluate my cost of living in retirement?
- Is paying a DFA advisor worth the 1% fee, when I could just do it myself at Vanguard?
- I am stuck in Total Market U.S. and International Index funds but want to invest some money in a couple of funds outside my retirement account. What 1 or 2 funds would you recommend?
- Can market history tell us anything about what the market should do today?
- Was this advisor competent and ethical, competent and unethical, or incompetent and unethical? You be the judge!
Apr 17 2019
Rank #10: Explaining the Ultimate Buy-and-Hold Portfolio
This recent interview with Jonathan and Brad of ChooseFi.com is both an excellent starting point for new investors and a refresher for seasoned investors as Paul discusses how to know who to trust, the role emotions play in making sound decisions and staying the course, the importance of diversification and choosing asset classes, and the pros and cons of active vs. passive management. He also explains stock market history and numbers and what they mean to investors, how to increase your odds of success, and simplifying the Ultimate Buy-and-Hold portfolio, using target date funds, small-cap value and his Two Funds For Fund strategy.
Jun 05 2019
Rank #11: Are you better off investing in bonds or stocks paying dividends?
1. If I need income from my investments, am I better off investing in stocks paying a good dividend rather than bonds? 1:45
2. Is a 60% stocks/40% bonds balanced fund better than a target date fund? 11:35
3. How does VBIAX (Vanguard Balanced Fund) compare to the 2 Funds for Life Strategy? 22:28
4. If I use M1, will the bid-ask spread cost of trading ETFs eat into my profits? 29:10
5. Will there be duplicate holdings if I use your ETF or mutual fund recommendations? 32:45
6. What is your favorite large-cap value ETF? 34:18
7. Why do you need so many ETF holdings in your best-in-class portfolio? 35:35
8. What are all the fees you have to pay if you use the M1 platform? 37:12
9. Where on your website do I find the symbols for all the ETFs you recommend in Portfolio #8? 40:45
10. How have listeners motivated young investors to learn the lessons from your website? 41:45
Mar 13 2019
Rank #12: Is it time to make changes to your portfolio? And 9 other Q&A’s.
1.Vanguard founder Jack Bogle says it’s time to play it safe. Should we be making changes to our portfolios or stay the course? :40
2. Did active managers beat passive funds in the recent selloff? 15:15
3. What are the relative risks and returns of the S&P 500 and small cap value index? 26:33
4. How do you know if you have “enough” or "more than enough” to retire on? 30:12
5. Should I take part of my emergency fund to do something more profitable? 36:38
6. Where can I get professional advice to set me on the right course? 41:09
7. Find out what happens when a caring advisor finds himself working for an insurance company. 47:53
8. Where can I find an outline that will help me educate my children about finances? 53:16
9. How do I create “Two Funds for Life" at age 76? 54:55
10. What Vanguard ETFs should I use to create your 4-fund combo? 01:02
Jan 09 2019
Rank #13: Fixed Distribution Strategies-2018 Update
The decision to establish a fixed distribution strategy can help ensure your peace of mind in retirement. This strategy is designed for people who retire with “enough" to meet minimum cash flow needs, including future adjustments for inflation. If you are new to our work, please read "The Ultimate Buy-and-Hold portfolio, 2018 edition" and the latest Fine Tuning Your Asset Allocations article. These two articles include the basis for the returns in these distribution tables.
To follow along with this discussion, please see the following Distribution Tables: 1, 2, 3, 10, 11,12, 19, 20 and 21. My goal is to give investors planning for retirement, or in retirement, enough information to select the right combination of equities and fixed income to meet their needs. Please note there are additional tables for investors who decide to use a 70% U.S./30% international equity combination. Please visit Distribution Tables 2018.
Apr 09 2018
Rank #14: Why investing has never been easier or more profitable
Investing has never been easier or more likely to help investors achieve their long-term returns. When I started investing, most of an investor's gains were lost to high loads to buy funds, high expenses to manage funds, high expenses to trade stocks, and the belief that smart people could beat the market. Of course, beside your broker taking their share, Uncle Sam took a very large piece of your return in taxes. In almost every way I know investing has become simpler, less expensive, less risky and more tax efficient. All of the advantages are still at the mercy of a bear market, but even that is better as investors have had access to an education that helps them have a better understanding of their personal needs for returns and personal risk tolerance.
In this podcast Paul mentions:
Habits and Attitudes of Successful Investors
Morningstar's Annual Fee Study Finds That in 2018 Investors Paid Less to Own Funds Than Ever Before
Back in The Day, Brokers Got Away with Murder in Trading Commissions
May 01 2019
Rank #15: Best mutual fund and best “safe” withdrawal rate, plus 8 Q&A’s
Paul discusses George Sisti’s comments about the best mutual fund, best “safe" withdrawal rate, and why "working harder" doesn’t seem to help investors. And he answers questions from readers and listeners.
1. What do you think of the new Fidelity zero-fee mutual funds?
2. Why are bonds losing money?
3. Which do you recommend: Vanguard or Schwab?
4. Which do you recommend: Vanguard or Fidelity International Fund?
5. Should I increase my exposure to stocks?
6. Do you make recommendations for Canadian investors?
7. Do you have current returns for using moving average systems to time the stock market?
8. Are CDs better than bond funds in a rising interest rate market?
Oct 03 2018
Rank #16: Advice for new, mid-career and retired investors: 8 Q&A's
Paul answers recent questions from readers and listeners:
9:29 1. A young investor asks me to explain, how does compound interest work? I referenced this article: Save $1,000 a year. Retire with millions
19:41 2. Do you expect index funds to keep outperforming actively managed funds?
25:35 3. Most of your articles are focused on accumulators. What advice do you have for those of us who are retired?
30:25 4. What do you think of the recommendations from Personal Capital?
33:03 5. When are you going to provide your Ultimate Buy-and-Hold Strategy report for 2019?
37:52 6. Is mid-cap value part of the small- or large-cap value asset class?
44:40 7. Should I invest in an active small-cap value fund in my 401(k)?
52:51 8. How should I use the Vanguard Monthly Income Portfolio in my portfolio?
Jan 30 2019
Rank #17: Answers to 12 Questions from AAII investors
Paul addresses questions raised during his recent presentations to more than 200 AAII members in Madison and Milwaukee. Also, he recounts an exciting meeting with 2 young women (ages 13 and 15) and their parents who announced the start of their daughters' lifetime investment journey modeled after How To Turn $3000 Into $50 Million Dollars. Briefly, Paul mentions his upcoming AAII presentation in Los Angeles on June 15 and The Money Show in Seattle June 15 and 16. Read about both events here. A list of recommended speakers to catch at The Money Show will be published in his next newsletter May 30. If not subscribed, sign up for the free twice-monthly newsletter at PaulMerriman.com.Here are 12 important questions raised from Paul’s AAII presentations in Wisconsin:
- How do you determine the best asset allocation for a new retiree? 7:00
- Why don’t you include sector funds in your recommendations? 13:30
- Why do you consider index funds more regulated? 16:00
- What do you mean by "automatic market timing? 18:00
- Why don’t you include international bonds in your portfolios? 22:50
- If children aren’t going to listen to parents for investment advice, who are they going to listen to? 26:20
- What are the loads and expense rations of using Dimensional Funds (DFA)? 30:55
- Can individuals invest in DFA funds without a middleman? 35:30
- Why not include growth funds in your recommended portfolio? 38:40
- What should I be able to count on for small-cap-value returns? 45:45
- Should my 63-year-old husband change his Target Date Fund to your Ultimate Buy and Hold Strategy? 32:50
- What is the difference between rebalancing annually and monthly? 56:00
LINKS MENTIONED IN THIS PODCAST
Performance: What Should You Plan On For The Future?
Asset Class Comparisons. https://paulmerriman.com/wp-content/uploads/2018/06/Asset-Class-Comparisons.pdf
May 22 2019
Rank #18: Is dollar cost averaging the best approach? And what’s the future of small-cap value index funds?
In a recent article and podcast on diversification, Paul noted that dollar cost averaging can be a form of timing diversification. It ensures that an investor will not put all his/her money in at the top of a market. It also ensures "picking up more shares when prices are lower and fewer shares when prices are higher.” Paul suggested that many "lump sum” investors would enter the market more successfully by dollar cost averaging into it.
Many readers and listeners took issue. They noted that the probabilities of higher returns were greater by putting all of the money to work immediately. Some claimed that his recommendation — to split the investment into a year or two of smaller investments — was going to cost investors a lot of money.
In response, Paul switches sides and makes the case in favor of lump-sum investing over dollar-cost averaging into the market. However, he maintains, there are reasonably high probabilities that some investors could end up with 10 to 20 times more money by using the more conservative dollar-cost averaging approach. Listen and learn why.
In Part II of this podcast, Paul addresses the likelihood that small-cap value index fund returns in the future will be as profitable as they have been in the past. He explains why he thinks total returns may be lower than the past, but also why the relative returns — compared to the S&P 500 — may continue to be higher than most investors expect.
He also addresses the questions:
Has survivorship bias been taken into consideration in creating the long-term returns of small-cap value?
What does Paul Merriman mean by conservative, moderate and aggressive portfolios?
Jul 31 2019
Rank #19: Why doesn't Vanguard add more small-cap value to its TDFs?... and 13 more Q&A
Paul addresses 14 questions from listeners and readers, but first he speaks to an interesting case of an investor who has greater trust in a bar of gold than a government bond-based Vanguard fund.
- Where are your Fine Tuning Tables for 2019? 9:33
- Where can I get a better rate of return in my checking account? 11:20
- Does indexing work as well in a multi-market system, such as international or emerging market funds, as it does in a single market (US)? 15:30
- Do bonds or bond funds have any place in a retirement portfolio before age 50? 19:50
- How should I diversify Vanguard funds in my 401k planner? 23:20
- How can I convince my mother to put a small part of her portfolio in equities? 26:30
- If more small-cap value makes so much sense, why don’t target date funds do that for investors? 31:00
- Where can I find the “Merriman aggressive Target Date Glide Path” recommendations on your website? 36:00
- Do you recommend using Dimensional Funds? 38:00
- Do you believe any specific company provides better investment funds/ETFs than another? 43:00
- There are so many vehicles to invest with: Vanguard, SPDR, DFA, WisdomTree. Invesco etc. Do you think any of these actually have an advantage over another? 45:22
- Do you ever use other forms of investment vehicles, such as closed-end funds? 47:00
- I am 66 and have not considered target date funds. Is there a 2 Funds for Life strategy for older investors with low risk tolerance? 50:45
- I am 62 and have no prior investing experience. Can you advise me on how to invest so I can make a little more money? 1:01:36
- I like your 2 Funds for Life strategy but I would like to add a few more funds beside small-cap value. What additional 2 funds could I add? 1:06:52
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Nov 20 2019
Rank #20: Investment lies many investors believe… especially during market declines
Dec 12 2018