When Bonds Make Sense and Asset Allocation

Compounding Project Podcast – Episode 36

In Episode 36 of The Compounding Project Podcast, legendary investing educator Paul Merriman shares timeless insights on long-term investing, the power of compounding, and how everyday investors can build lasting wealth.

Paul explains why starting early is one of the most important financial decisions you can make, how compound growth works quietly over decades, and why low-cost index funds remain the foundation of successful investing strategies.

This episode dives deep into portfolio diversification, the hidden impact of investment fees, and the role of small-cap value investing in improving long-term returns. Paul also offers practical, evidence-based guidance for young investors, parents, late starters, and anyone seeking financial independence through disciplined investing.

Whether you’re new to investing or refining an existing portfolio, this conversation delivers actionable lessons on building wealth the smart way.

1. Starting early and staying consistent matters more than market timing or stock picking.

2. Low-cost index funds and diversification are the most reliable tools for long-term wealth building.

3. Small-cap value investing and minimizing fees can significantly increase lifetime investment returns.

• Your Money and Your Brain

• The Psychology of Money

• Thinking, Fast & Slow

• Spending Your Way to Wealth

Watch the full episode for expert insights on investing, compounding, and financial freedom.

Follow Paul Merriman On Social Media: ⤵︎📷 Instagram: /   / paulamerriman2012  📱 YouTube: /    / @paulmerrimansoundinvesting  To Know More,Follow Sathish Gajula On Social Media: ⤵︎ 📷 Instagram: /   / compoundingproject  📱 YouTube: /    / @compoundingproject  

Timestamps:

00:00 Episode Trailer

02:00 Intro to Wealth and Index Funds

03:20 The Million Dollar Decision

07:04 Investing Tips for Young Parents

12:47 Saving When Money Feels Tight

15:35 Stocks vs Bonds

19:58 Rethinking Stock Market Risk

24:36 Why Investing Is Easier Today

27:06 How Fees Hurt Returns

29:08 When Bonds Make Sense

32:56 Investing Across Generations

34:58 Portfolios by Age

35:52 Starting Late in Investing

41:05 Defensive Investing Basics

42:10 Why Stocks Matter Most

43:04 Beating the S&P 500

48:09 Market Returns Explained

51:22 Why Diversification Matters

54:49 Fees and Long-Term Returns

58:28 Small Cap Value vs Total Market

01:03:25 Equal-Weight S&P 500

01:08:36 Handling Market Volatility

01:11:05 Picking Small Cap Value Funds

01:12:50 Trust in Investing

01:16:42 Hotseat Questions