Sound Investing
Small Cap Value Showdown Between Financial Legends — (This Could Add Millions To Your Retirement!)
Apr 9, 2025
In this riveting debate, economist Karsten Jeske, known for his straightforward investment strategies, faces off against veteran Paul Merriman. They hash out the merits of small cap value investing versus simpler index approaches like 'VTSAX and chill.' Merriman touts small cap value’s historical outperformance, while Jeske warns that its advantage may fade in today’s efficient market. The stakes are high—potentially millions for retirement as they unravel topics like diversification, investment complexity, and the importance of understanding risk in financial planning.
01:56:06
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Quick takeaways
- Merriman promotes small cap value for its historical performance and potential for diversification, arguing it can enhance long-term returns even with higher volatility.
- Jeska counters that small cap value's recent underperformance suggests simpler investment strategies like total market indexes could be more effective and manageable.
Deep dives
The Debate on Small Cap Value
The discussion centers on the merits of including small cap value in investment portfolios, featuring prominent advocates Paul Merriman and Dr. Karsten Jeska. Merriman argues for the historical advantages of small cap value, highlighting its strong performance during various market cycles, including times of economic downturn. He believes that incorporating small cap value stocks leads to better portfolio diversification and potential for higher long-term returns. Jeska, however, contends that the advantages of small cap value have diminished in recent years, citing its underperformance since 2006 and suggesting a simpler investment strategy may be more effective.
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