Sound Investing

In this podcast, Paul Merriman answers 10 questions recently submitted by his listeners and readers at paulmerriman.com. See additional links referenced below. What changes would you recommend to your 10-fund portfolio at retirement when you need the money to live on? 0:30 What should a late starter do to get caught up?  What do you recommend for investors who don’t have any experience?  I just turned 35 and I haven’t started saving for retirement. 3:45 Did I read that you and your wife not longer have any equities in your portfolio? I ask because I am 80 years old and am confused over what I thought you said and what you are saying now. 7:30 Should investments in a Roth IRA be in your tax-deferred portfolio?  You recommend VTMSX but Vanguard warns against using that fund inside a retirement account and recommends VSMAX. 9:30 Do you agree with many experts who say a lump sum investment is better than dollar cost averaging? 14:00 How should we prepare for a catastrophic market — all investments in government bonds directly or through Vanguard? 18:00 What do you think of using a simple 2-fund portfolio that is U.S. large-cap blend and small-cap value? 22:00 Which investments should I own in taxable accounts and which in tax-deferred or tax-free accounts? 24:15 What is your opinion of Northern Trust Mutual Funds? 26:00 What do you think of the combination of total market U.S. and International funds Tom Cock and Don McDonald reference in their "Talking Real Money" podcast? Plus some small-cap value?  28:30 For more about ROTH IRAs, see http://www.mypersonalfinancejourney.com/should-my-mutual-fund-be-held-in-roth/ For the new “no brainers” Table of Long-Term Results, visit this link. Click for Table 3a – No-Nonsense Portfolios for Sound Investing: Annual Returns

How much and what equity asset classes will investors choose for their portfolios? While this podcast is aimed at young investors, it also has implications for older investors who have a portion of their portfolio invested for younger heirs. Daryl Bahls has produced two new tables that give us a long-term view of the implications of the proportion of your portfolio that is committed to equites and the selection of equity asset class. One table titled, “Which 2 million dollar decision is right for you?” compares 6 different combinations of 90% bonds with 10% equities.  The equity combinations include 5% and 10% positions in the S&P 500, small-cap blend and small-cap value. Compared to an all bond portfolio, the lifetime impact of adding these 10% equity positions ranges from 2 to 10 million dollars. The second table, “Which 10 million dollar decision is right for you?” reflects the aggressive decision to invest in an all-equity portfolio with all or part of your portfolio.  In other words, you may only put 20% of you portfolio in equities but that position is left to grow without rebalancing. Paul suggests young investors think of investing as if you are starting a company that you want to grow over the long term. The following tables are also referenced during the podcast:  https://paulmerriman.com/wp-content/uploads/2021/06/2-4-fund-combo-2020.pdf Table 9 in this series of tables found at https://paulmerriman.com/wp-content/uploads/2021/02/Fine-Tuning-Tables-50-50-2020.pdf Get your free copy of We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. Please share it widely!

Please note our free offer at the end of these podcast comments. In this podcast, Ed Fulbright, CPA, PFS, a fee-based advisor and host of Mastering Your Money™ radio show, talks with Paul Merriman about such topics related to financial freedom as: · Why is saving more important than spending? · What is the power of starting to invest early versus later? · Why are is small-cap so important to a person's portfolio? · What is the best advice you have ever received? · What do you want our listeners to remember? · Why are you giving away your latest book, We're Talking Millions! 12 Ways to Supercharge Your Retirement? Get your free copy of We’re Talking Millions! at: https://paulmerriman.com/wp-content/uploads/2021/01/Were-Talking-Millions.pdf

Don, Tom, and Paul Merriman get together again to discuss the pros and cons of owning stocks and the stock market.

Please take advantage of our free offer at the end of these podcast notes. The granddaddy of all investment decisions is the choice between stocks and bonds. While most investors know stocks make more than bonds, few know that even a small investment — as little as $25 dollars a month — can easily lead to the source of a million dollars in retirement and money left to others. This podcast explores the likely long-term term returns of stocks and bond, both before and after retirement.  Although Paul doesn’t comment on all the tables, he thinks investors will find all of them interesting.  Paul especially hopes you will take a look at Tables 1, 2, 3, 4 in this pdf, as well as Table 46. Get your free copy of We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. Please share it widely!

Ever wonder why it’s fairly easy to plan something and much more difficult to stick with it? Inspired by a brief post on Seth Godin’s blog, about “Lines and curves,” Paul discusses this phenomena that sidetracks many sincere investors. (See Godin’s post below). He makes the case that the work he and his team do is like a ruler's "straight line," while the “curves” are what you have to deal with in real life as a ‘stay-the-course’ investor. Lines and curves  Working with a ruler is pretty straightforward. Just about anyone can extend a line, or fix something straight if it breaks. It’s on the line or it’s not. But curves? Curves are complex and hard to get right. It turns out that humans bring curves with them, wherever we go. 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 biweekly newsletter at PaulMerriman.com and receive a free pdf copy of We’re Talking Millions! 12 Ways to Supercharge Your Retirement. 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 book, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement available at Amazon and other online outlets. 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 makes the case that all 12 ways presented in his book, We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement, are EACH worth a million dollars or more.   It’s not just that an investor would make a million dollars, but that in each decision, or fork in the road, one fork would make an EXTRA million dollars more than the less productive path. Many people find this incredible, and Paul admits that most young investors would be very happy to make a million or two in total. But when his co-author, Richard Buck, with whom he has successfully and happily worked  for almost 30 years, confessed he personally found it a bit far-fetched, Paul felt pushed to the wall.  “I had to throw down the gauntlet, draw a line in the sand and commit myself to making Rich — and all the young investors I hope to reach with this information — understand once and for all why I believe this so strongly,” says Paul. In this 90 minutes, Paul walks you through all 12 ways, or forks in the road, so you fully understand (and can explain to others) how and why each way is really a $1 million (or more) decision. He explains the importance that small differences in returns make over a lifetime of investing. This table, “One-half percent difference over a lifetime” makes that difference very clear. In addition to the 12 ways, or decisions, Paul adds FIVE BONUS WAYS that will likely add another million to your  or your children’s or grandchildren’s future. Tune in to learn the whole truth of how and why these 12 Ways to Supercharge Your Retirement can mean well over $12 million additional dollars in your pocket over a lifetime.  And yes, that could come with only $6,000 a year invested over 40 years.  Get your FREE pdf of We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and share it with all the people you know and care about. And if you find Paul’s comments unrealistic, please let him know why. He would like to share your position and his response in a future podcast.  Of course he won’t use your name so fire away to info@paulmerriman.com

Paul, Tom and Don discuss the time frame over which investors should remain patient and how much return can reasonably be expected. They reference the article- “How Long is a Long Run?”, by Craig Israelsen.

The questions and topics in this podcast came out of the wonderful responses to the question posed to our free newsletter subscribers, "How we can keep you engaged?”Most of your studies offer returns over 30, 40, or more years.  For those of us who don’t have that kind of time, what can you tell us about the likely returns we should get?   In Paul’s response he references a terrific new article and study by Craig Israelsen, one of our Truth-Tellers.  His article, “How Long is a Long Run?”, offers the likely success of getting the historical returns for the next 5, 10, 15, 20, 25, 30 and 35 years.  Spoiler alert:  There’s good news and bad!  2:00 You and Larry Swedroe have convinced me to add small cap value to my portfolio.  Many retirement plans offer actively-managed small cap value funds with high expenses.  Do you have a hard cut-off on what level of expense is acceptable? 22:40 In your popular video, My Favorite 12 Vanguard Funds for Retirees, you recommend several actively-managed funds, including Wellington.  How can you recommend Wellington (VWLEX) when Vanguard offers Balanced Index Fund (VBIAX) with about the same balance of stocks and bonds?  28:05 You recommend a combination of short-term government bond fund, an intermediate bond fund and a TIPS fund for the bond portion of your portfolios.  Why not keep it simpler and just combine a total bond market fund like BND with a TIPS fund? 31:30 What advice or evidence can you offer to help investors who have started saving late in their career and are in danger of taking too much risk in an attempt to catch up? 35:20 I am 80 years old and never invested in the stock market.  I have used only CDs to build my retirement savings.  I now believe I need to add some equities to my portfolio.  What do you recommend I do to conservatively add equities and still sleep easy?  59:28 There are several links mentioned:  bankrate.com, stantheannuityman.com, and for this man’s children and grandchildren.  Download Paul's free books.

Warning: this podcast is geared for investors who like numbers.  It is focused on some of the best lessons from Paul's favorite book on investing. The Matrix Book 2021 is 100 pages (8 1/2 x 14) almost entirely dedicated to listing the annual returns of dozens of asset class, some from 1926 to 2020 and others starting where records of those asset classes were first tracked.  Those asset classes include U.S. and international large cap blend, large cap value, small cap blend, small cap value, commodities, short and long term U.S. and international corporate and government bonds and inflation. In most cases returns are listed for 1, 5, 10, 15, 20, 50 and 80 years. Topics: 1. How do the S&P 500 and Total Market Stock Indexes compare? 3:20 2. How have small cap blend (growth and value) and small cap value performed? 8:33 3. Not all indexes are the same.  How do the Russell and DFA index construction and returns differ? 11:00 4. Have recent small cap and value return premiums been as good as the past? 17:00 5. How have international asset performed? 19:56 6. How have emerging market performed? 22:00 7. How have bonds performed for the past 20 and 80 years? 23:35 8. How has inflation impacted returns over the past 20, 50 and 80 years? 25:30 9. Are commodities a good hedge against inflation? 27:52 10. What is the best investment to protect against inflation? 30:40 11. Which return is the most meaningful, before or after inflation? 33:17 12. What are the most important lessons from The Matrix Book 2021? 42:13 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 biweekly newsletter at PaulMerriman.com and receive a free pdf copy of We’re Talking Millions! 12 Ways to Supercharge Your Retirement. 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 book, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement available at Amazon and other online outlets. 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!