Questions, answers and opportunities during the pandemic

While the coronavirus pandemic has changed everyone’s life — and hopefully without illness or loss — for The Merriman Financial Education Foundation it has been a huge game changer, in a very good way. In this podcast Paul shares some new ways he’s able to serve more investors and he answers seven questions from his listeners and readers.

1. Can you discuss the funds to hold in different types of investments, like Roth and regular IRAs, 401ks and taxable accounts? 5:00

2. I have several accounts. Should I try to build your Ultimate Buy & Hold portfolio in each account or build it with 3 or 4 funds per account? 12:35

3. As a 28-year-old investor with a 40-year time horizon, why shouldn’t I put all my investments into more volatile funds, like U.S. and international small cap value and emerging markets, rather than all 10 asset classes in the Ultimate Buy and Hold Strategy? 15:20

4. Many academic studies, as well as your advice, show strong correlation between low expense ratios and mutual fund performance. Your mutual fund and ETF recommendations largely include funds with low expense ratios, however the "International Small Cap Value" asset class ETF (DLS) has a higher expense ratio (0.58%) than I would like. In order to minimize investment expenses, would you recommend substituting another similar investment with a lower expense ratio? I am considering international small cap (VSS - 0.11% ER) or Vanguard Total International Index Fund (VTSNX - 0.08% ER) as a substitute. 18:00

5. Why should we think that HISTORY is the best source of guidance for asset class allocation? Your recommendations for both the "Ultimate Buy and Hold" and the “Two Funds for Life" look to history for efficient asset class weightings. The other source that could be looked to is THE MARKET. It seems that The Market includes all the historical information, as well as the wisdom and knowledge of Paul Merriman, Warren Buffet, all the academic research, all the hedge fund managers, all the mathematicians with supercomputers, etc. Also, in some instances, The Market seems to give a more credible answer than History. For example, history shows bonds returned 6% annually, but the market shows bonds will return about 1.5% going forward.   23:05

6. How can you justify investing in a market that is highly likely to go down due to the coronavirus, coming recession, 30% unemployment, historically high P/E ratios and sky high debt? 37:50

7. What are the likely losses investors must expect in the market? 48:55

Mentioned in this podcast:

"Your Complete Guide to a Successful & Secure Retirement by Larry Swedroe and Kevin Grogan

Choose FI Seattle Zoom Meetup, Saturday May 16. link to Kelly Cannon’s list of topics

Join 20,000+ savvy investors and receive Paul’s free twice-a-month newsletter. Sign up now Plus visit Paul's website for NEW VIDEOS: “12 Million-Dollar Decisions Guaranteed to Change Your Financial Future” and Chris Pedersen’s “Two Funds for Life”.