Sound Investing

Jacek Lempart, the Belguim-based host of System Trader “The craft of investing,” interviews Paul Merriman in this extraordinary in-depth conversation, unlike others you may have heard. It has been divided into two parts.. You’ll learn: · Who’s Paul, and what’s the story of his careers? · How have markets changed over the years? · Why is Paul a big fan of academic/scientific knowledge? · What should we do to feel satisfied and have a happy life? · How to adjust strategy so that it has an appropriate level of risk? · Where’s the border between passive and active investing? · A systematic approach to investing vs. discretionary · The philosophy behind the Ultimate Buy & Hold portfolio? · What does Paul think about holding a bit of cryptocurrency as another asset class? · Gold and commodities

In this podcast, Paul makes the case for a multimillion dollar payoff if you decide to be a good Do-It-Yourself investor and do the necessary work. He considers this podcast one of his most important.  Using our Fine Tuning Tables and The Merriman Lifetime Investment Calculator, he shows 3 simple ways a conservative well-diversified portfolio, with a retirement portfolio worth only $500,000, would have produced an additional $2,000,000 over 30 years of retirement. To make his points, Paul references: - S&P 500 FTYAA Table - The U.S. 4-Fund FTYAA Table - These sample calculations from our Calculator - The 90-year study (Table 1) that evidences that investor patience leads to better returns. This podcast was recorded Dec. 12, 2021 by Paul in Mexico, as he and his wife, Zan, having sold their home in San Miguel de Allende, were in the last days of moving. Watch Craig's short video "Understand the effect of 1% using our Lifetime Investment Calculator" that goes along with this podcast.

This is a continuation of the conversation between Paul, Craig Appl, and Chris Pedersen who evaluated the evidence for We’re Talking Millions! using The Merriman Financial Education Foundation Lifetime Investment Calculator, Portfolio Visualizer, and Two Funds for Life back test. This part builds on Part 1, so we recommend that you view Part 1 before this. Download your free PDF copy of the book now to follow along. You can access the Lifetime Investment Calculator at this link, Part 1 reviewed steps 1 – 5 and Part 2 continues with steps 6-12. Save some money instead of spending it all. Start saving sooner instead of later. Invest your savings in stocks instead of bonds and cash. Invest in many stocks instead of only a few. Keep your expenses low. Choose index funds instead of actively managed funds. Include small-company stocks in your portfolio. Include values tocks in your portfolio. Don’t try to “time” the market or outwit it. Invest using dollar-cost averaging instead of waiting for the right time to invest. Keep your taxes low. Do all this in one simple step: Invest in a target date retirement fund.

About a year ago, we released the book, We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. A few people have challenged the idea that each of the 12 simple steps, outlined in the book, can net you an additional million dollars. Paul, Craig Appl, and Chris Pedersen evaluate the evidence using The Merriman Financial Education Foundation Lifetime Investment Calculator, Portfolio Visualizer, and Two Funds for Life back tests in this two-part video series. Download your free PDF copy of the book now to follow along. You can access the Lifetime Investment Calculator at this link and the accompanying YouTube video here. Part 1 reviews steps 1 – 5 Save some money instead of spending it all. Start saving sooner instead of later. Invest your savings in stocks instead of bonds and cash. Invest in many stocks instead of only a few. Keep your expenses low.

An investment advisor and long time podcast listener recently wrote to Paul: “By any stretch of the imagination this market (S&P 500) is expensive. Back in 1987 you took your clients to cash or very near cash. Do you feel that that today is the same situation?  I’ve never market timed in my career, but today fells like the time to do it if there ever was a time.” Paul discusses what really happened in 1987. He follows that with sharing parts of two blogs by Ben Carlson, CFA and author of the blog, “A Wealth of Common Sense.” Paul also shares the latest predictions for 2022 from two of the most respected financial institutions in America. Hopefully, it will help investors deal with the question: is it time to sell? Happy Thanksgiving! Ben Carlson’s articles referenced in this podcast: "Two Things That Are Both True” "Perma Arguments”

In this lively conversation, Paul Merriman and Daryl Bahls interview Chris Pedersen – author of 2 Funds for Life – A quest for simple & effective investing strategies (Oct. 2021) and creator of the 2 Funds for Life strategies – about the simplicity and effectiveness of these strategies and the data that supports them. Below is a link to start reading the book for free. Questions discussed: · How did you get the title of “financial wizard”? · Is the book for young people? · What are some of the questions the book answers, and why should investors care about them? · What's a target-date fund, and why is it the foundation of the 2 Funds for Life strategies? · What's the gist of the 2 Funds for Life approach? · Why is small-cap value the best choice second fund for accumulators and retirees? · Is a target-date fund on its own enough?  How much more money did the 2 Fund for Life strategies make in the past? · Why does the book focus on "real" (after removing inflation) instead of "nominal" (including inflation) results? · How much deeper were the drawdowns (losses) for 2 Fund for Life strategies compared to a target-date fund? · Are 2 Fund for Life strategies more resilient after major market declines? · Why might investors need or want some of the deeper details in the book? START READING THE BOOK FOR FREE at our website: https://paulmerriman.com/2-funds-for-life-book/

Paul address the pros and cons of cryptocurrencies. He discusses his personal opinion after reading from several articles that do a good job of presenting the basics of cryptocurrencies. In this week’s Sound Investing newsletter, Paul expands on his views about cryptocurrency. Subscribe now — always free! — at https://paulmerriman.com/signup/ and get your free copy of We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement. Suggested links: https://www.freecodecamp.org/news/explain-bitcoin-like-im-five-73b4257ac833/ https://gen.medium.com/you-dont-understand-bitcoin-because-you-think-money-is-real-5aef45b8e952 https://www.youtube.com/watch?v=ggvlgNMr_NE Additional links to understand the basics of cryptocurrency from NGPF.org: https://www.ngpf.org/blog/investing/is-bitcoin-bad/ https://www.ngpf.org/blog/current-events/cryptocurrency-bitcoin-primer/ https://www.ngpf.org/blog/question-of-the-day/question-of-the-day-what-is-the-value-of-cryptocurrency-stolen-each-day-on-average/ https://app.nearpod.com/presentation?pin=DHIRS

Chris Pedersen talks with Ed Fulbright, CPA, on Ed’s “Mastering Your Money” podcast, about the 2 funds for life strategy he developed as Director of Research for The Merriman Financial Education Foundation, and his new book, 2 Funds for Life: a quest for simple and effective investing strategies.  Chris tells the story of how Paul Merriman’s meeting with Jack Bogle, the founder of Vanguard and father of index funds, led to his development of 2 funds for life. The challenge was to greatly simplify Merriman’s Ultimate Buy and Hold strategy so it is accessible to everyone. At the same time, keeping the simple strategy massively diversified and tilted toward maximizing return and minimizing risk, while adjusting for a lifetime so the risk is automatically reduced as people age. Chris also talks about the challenges of approaching retirement, some steps he took to minimize anxiety and transition to retirement, the best advice he received, and about risk and the importance knowing your own tolerance. Get your copy of 2 Funds for Life: a quest for simple and effective investing strategies. All profits from the sale of the book support the work of The Merriman Financial Education Foundation. This podcast is part of the educational offerings from The Merriman Financial Education Foundation, a registered 501(c)3.  If you found value in this podcast, here are five ways to support the podcast and our foundation: 1)    Leave a podcast review on your player of choice. 2)    Sign up for our bimonthly newsletter at PaulMerriman.com and join 30,000 savvy investors who value free financial education. You can download a free pdf copy of We’re Talking Millions! 12 Ways to Supercharge Your Retirement at https://paulmerriman.com/wp-content/uploads/2021/01/Were-Talking-Millions.pdf  We ask that you share it with family and friends! 3)    Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee — at no cost to you — which helps support our financial education projects. 4)    Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and 2 Funds for Life: A quest for simple & effective investing strategies, the profits from which help support our work. 5)   Consider making a tax-deductible donation to the Foundation to support our mission to provide financial education to investors at all stages of life.  Thank you!

In this podcast, Paul is joined by Daryl Bahls and Chris Pedersen to answer a variety of questions posed during the AAII Conference 360.  What mutual funds and ETFs do you personally own? Paul, Chris and Daryl share their individual approaches and holdings. Are there any good-to-excellent small cap newsletters Paul recommends?  In the answer Paul references http://hulbertratings.com/, the best source of newsletter results, and also the "Cabot Turnaround Newsletter" and "Nate’s Notes." Where can we get a list of small cap value funds and ETFs? In your distribution tables, by inflation adjusting the distributions but not the value of the portfolio holdings, doesn’t that mislead a potential investor? Where can we get the free copy of We’re Talking Millions!? What are the specific 4 funds you recommend an investor hold for life?  Paul includes mention of links to recommended funds or ETFs: https://paulmerriman.com/vanguard-tax-deferred-etf-portfolios/ https://paulmerriman.com/best-in-class-etf-recommendations/ https://paulmerriman.com/4-fund-portfolios/ When re-balancing the 2 Funds for Life, do you strictly look at the end-of-year value of each asset, or are there other criteria you recommend evaluating? My Schwab account rates my portfolio on risk vs. return.  Is this the ultimate way to measure how I am doing? If your account is taxable will using factor investing and rebalancing create a tax drag that overwhelms the better expected returns? Chris, which websites did your AAII panel on Factor Investing recommend for researching funds and learning about factor investing: https://paulmerriman.com/best-in-class-etf-recommendations/ https://www.portfoliovisualizer.com/ https://www.morningstar.com/ https://www.etf.com/ https://alphaarchitect.com/blog/ Daryl Bahls is Director of Analytics for The Merriman Financial Education Foundation and Chris Pedersen is Director of Research and author of the new book, 2 Funds for Life: A quest for simple & effective investing strategies available at Amazon and other online booksellers. You can watch Paul’s presentation Small-Cap Value presentation here. You can get your free copy of We’re Talking Millions! right here. The American Association of Individual Investors is an independent, nonprofit corporation formed for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research. Learn More: https://www.aaii.com/membership/about-aaii You can join here starting at $2/month: https://invest.aaii.com/membership/

Cryptocurrencies, ARKK, inflation, market timing, Vanguard High Yield Bond Fund and emerging markets and mor This podcasts includes questions from a fellow advisor as well as questions from readers and listeners. Do you care that bond interest rates are below inflation and it seems that rates will stay below inflation over the next decade? Do you encourage investors to search for alternatives to bonds with higher expected returns? Do you think returns should be presented in real (after inflation) or nominal (no inflation) terms? Could an equity trend-following strategy be used as an alternative for bond funds? What advice do you give young investors on cryptocurrencies or stocks like GME or AMC? Many investors are convinced that investing in new rapidly growing companies (such as those ins the ARKK ETF) are superior to small cap value companies. Why choose the losers over the winners? Is a simple conventional 60:40 portfolio best for most investors? Why is your Ultimate Buy and Hold Portfolio underperforming the S&P 500 over the last 6 months? This answer explorers the winners and the losers over the last year. I’m disappointed in the recent 3 years of returns of emerging markets. Can you give me some historical perspective on the recent underperformance? Would an international small cap value fund be a good substitute for an emerging markets fund? What are the pros and cons of Vanguard’s High Yield Bond Fund and Total Bond Fund?