Sound Investing Pediheart Podcast #366: A Focus On Financial Health With Mr. Paul Merriman
Dec 31, 2025
Paul Merriman, a retired investment advisor and founder of Merriman Wealth Management, shares his expertise on financial health for medical professionals. He delves into factor investing and the benefits of non-traditional index funds that can yield higher returns. Merriman emphasizes the importance of disciplined investing and when one might need a financial advisor. He also discusses low-cost financial planning options and the role of AI in investment strategies, while advocating for a fiduciary approach in choosing advisors.
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Factor Indexes Can Beat Cap-Weighted Funds
- Non-traditional, factor-based index funds can outperform cap-weighted indexes by applying academic rules to construct portfolios.
- These funds buy broad baskets but use different selection/rebalancing methods to seek a return premium.
Pay A Bit More For Potential Premiums
- Evaluate slightly higher-cost factor funds because the extra expense can buy a meaningful return premium.
- Pay ~0.15–0.25% for potential 1%+ additional annual return rather than chase the absolute cheapest funds.
Complex Indexing Requires Real Expertise
- Running non-traditional index funds requires more expertise and active rules than simple cap-weighted funds.
- That extra management effort justifies modestly higher fees when it may add return.