Afford Anything
Paul Merriman: The 4-Fund Strategy That Beats the S&P 500
Oct 18, 2024
In this discussion, Paul Merriman, a former wealth manager and financial educator, shares his insights on a four-fund investment strategy that has consistently outperformed the S&P 500. He highlights the benefits of international stocks to stabilize returns and emphasizes the power of starting early, illustrating how a dollar a day can lead to millions by retirement. Merriman cautions against common pitfalls like over-relying on bonds and frames investing as a partnership with businesses, urging investors to think long-term.
01:04:50
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Paul Merriman advocates for a four-fund investment strategy that balances large cap, small cap, and value stocks to outperform the S&P 500 with lower risk.
- Investing early, even in small amounts, can result in millions by retirement age, emphasizing the importance of compound interest over time.
Deep dives
Diversifying Your Portfolio for Better Returns
Creating a diversified portfolio is essential for achieving better long-term investment returns. Instead of relying solely on the S&P 500, it is beneficial to adopt a strategy that includes various asset classes. For instance, a four-fund strategy that consists of 25% S&P 500, 25% large cap value, 25% small cap value, and 25% small cap blend has historically resulted in lower volatility and nearly two percent higher returns compared to a single-fund approach. This diversification allows investors to manage risk more effectively while capitalizing on different market segments.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
