Mavis Tsai is a friend I have known for decades. Our paths crossed as I was teaching one of my free 3 or 6 hours workshop.  In January she asked me to participate in her 5-day online event entitled,  "Confluence of Hearts: A Global Summit on True Self, Brave Connections, and a Love-Led World”  In the description of the event she noted: "Together, we will explore cutting-edge insights on reconnecting with our true selves and our fellow humans, dismantling antiquated societal structures, harnessing our passions and gifts, and co-creating a thriving future for generations to come by contributing our highest selves to the world.” We have one thing in common.  We are both trying to help people get better—but in very different ways. When she asked me to participate I begged off.  Here is a paragraph from my attempt to graciously say no. "I am trying to help people have a better financial future, and I’m willing to do it for free, but I’m not sure I fit the mold of the kind of speakers you are bringing together.  I’m an expert on investing by the numbers.  I want do-it-yourself investors to take the steps that will give them the highest probabilities of long term investment success.  Normally that means squeezing every ounce of emotion out of the process.” Mavis knows I like lists so she gave me a list I couldn’t resist. 1. Your expertise in investment not only aligns with our summit's focus on creating a love-led world but is a crucial piece of it. Financial stability and wisdom empower individuals to live their true selves and make brave connections. By teaching attendees how to secure their financial future, you're offering them the freedom to pursue their passions and contribute meaningfully to society. 2. Our summit thrives on the diversity of thoughts and approaches. Your unique perspective on investing by the numbers adds an invaluable dimension to our discussions. It’s about balancing the heart and mind—your approach provides the stability and clarity needed to pursue one's true passions with less financial fear. 3. Contrary to taking the passion out of investing, your method encourages a highly disciplined form of passion. It's about being passionate about our goals and the systematic pursuit of those goals. This disciplined approach is a form of emotional intelligence that is highly relevant to our attendees' journey towards a love-led life. 4. Your willingness to contribute your highest self by educating others for free is the epitome of what this summit stands for. (Your interview will be for less than an hour :)). It’s about contributing to a thriving future by sharing our gifts. Your insights can help our audience make informed decisions that align with their values and long-term success. 5. Your concern about confusing your followers is understandable. Participating in this summit, however, is an opportunity to show the depth and versatility of your expertise. It’s a platform to demonstrate how financial wisdom is foundational to living a fulfilled, passion-driven life, bridging your work with broader life goals. I said yes and the conversation is entitled,  "Balancing Hope and Reason: The Lifetime Path to Successful Investing.”  I hope you enjoy it. Watch the video here.

On May 18, 2024 Chris Pedersen made a presentation to the Houston Chapter of AAII.   At the end of the presentation Chris answered over 20 questions.  Those questions are on this podcast.  Here are the question topics: 1. Portfolio expectations compared to S&P 500?2.  How would adding small cap value (SCV) help a retiree?3.  How important is asset class location using 2 Funds for Life?4.  Would a do it yourself target date portfolio be better than buying a target date fund?5.  How do you expect interest rates to impact equity?6.  How different are the Total Market Fund expected returns from the S&P 500?7.  What are drawbacks by investing in SCV?8.  What steps should we take to manage emotional risk?9.  What is your opinion about combining TIPs with equities?10.  Should you increase your equity holdings as the get older?11.  Please comment of Christine Benz’s Bucket Portfolio?12.. What SCV funds do you recommend?13.  Are there other target date funds you recommend besides Vanguard?14.  At age 60 what kind of return should I expect over the rest of my life?15.  Do you recommend nudge  withdrawals over withdrawals from the whole portfolio?16.  Why would more profitable small cap value funds do better than portfolios of less profitable companies?17.  Do you recommend VT, the Vanguard Worldwide equity fund? Inside the Investment Mind of Chris Pedersen with host Charles Rotblut.  Charles is  the editor of the AAII Journal, and a vice president and Chartered Financial Analyst at AAII Q1:  What is the best way to get big positions in cash invested?  All at once or dollar cost average over time? Q2:  How should target date fund investors choose the best date for their situation? Q3:What are the pros and cons of backtesting historical performance? Q4:  Why did you choose the drawings in your book “2 Funds for Life?”

Chris explains investing diversification with some analogous side trips to the worlds of food and nature. He starts by illustrating the importance of perspective, emphasizing the need for many decades of data in backtesting. Next, he covers the ingredients, or asset classes and styles, most investors will use to diversify. With the ingredients in hand, he explains what happens when we mix them, and how mixing ingredients that are substantially different can improve the return we get for any given level of risk. He then covers the real-world implications for accumulators and retirees and finishes off with some fine tuning tables and thoughts on the discipline needed to be a meaningfully-diversified investor. Here is Chris' pdf from his presentation Get a free copy of We're Talking Millions

Noted personal finance expert Paul Merriman discusses asset allocation in retirement accounts, emphasizing the importance of diversification and low-cost, efficient portfolios. He shares insights on '2 fund' and '4 fund' strategies for optimal long-term returns. Merriman also highlights the benefits of target date funds and offers a free PDF of his book for further financial education.

Paul and Chris cover several questions about the Best-in-Class ETF recommendations and selection process. What's the overarching objective of the Best-in-Class ETF recommendations?*  What's the 6-step process described in your AAII Best-in-Class ETF Article? Why is it sometimes worth paying another tenth of a percent or more for funds with more exposure to small or value? Is AVUV's recent 6%/year return advantage over VBR expected and/or likely to continue?*  What did Avantis say are the market conditions that favor or disadvantage their approach?*  How should investors think of the risks of tilting away from the cap-weighted market indexes towards small and value? Retail investors have a potential superpower versus institutional fund managers -- patience! How many hours does it take Chris to update the Best-in-Class ETF recommendations? JL Collins is a big proponent of the total market index.  How much is our Best-in-Class ETF recommendation for large-cap blend (AVUS) likely to outperform a total-market index fund such as VTI? What happens when small-cap value becomes super popular? Links: Best-in-Class ETF Bootcamp video and podcast AAII article on Choosing Best-in-Class ETFsPortfolio configurator Portfolio visualizer factor statistics, factor regression tool, and fund factor regressions. Watch video here

Join Paul and Chris to follow up on Chris’ video on "2 Funds for Life Update 2024" . In this discussion Chris covers the history of the development of this popular portfolio, as well as his new table that covers the expected returns for all of the periods from ages 20 to over 90. The discussion included comments on: The advantages of Blackrock over Vanguard target date funds and why it should make over .5% a year more over their lifetimes. The reasons paying more for a small cap value fund may pay big rewards over the long term. The advantages and disadvantages of the more aggressive 2 Funds for Life Portfolios. How to build the Portfolio by using several different accounts The impact of rebalancing vs. letting the 2 funds grow independently Watch video here

Stan Haithcock, 'Stan the Annuity Man,' discusses the pros and cons of annuities, emphasizing transparency in pricing and selecting based on individual needs. The podcast delves into the reliability of insurance companies, benefits of Multi-Year Guarantee Annuities, and variances in offerings among companies. Balancing annuity investments for spousal financial security and navigating the complexities of annuities are also key topics covered.

Join Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar, for answers to seven of the biggest questions facing those entering or in retirement. Financial literacy is empowering—yet good, practical education about financial management is too often out of reach for people, especially those with limited incomes. Former BCF Board member Paul Merriman—founder of The Merriman Financial Education Foundation—has dedicated his retirement to providing free education for all ages about how to secure a more stable financial future.   On behalf of BCF, every year Paul organizes ⁠free virtual events⁠ with speakers who are nationally renowned experts in their fields in order to help educate our community on how to better plan for our futures. These events target all ages and levels of financial literacy, including youth, first-time investors who are still in the workforce, and those who have just entered retirement. Watch video here

Two financial gurus, JL Collins and Paul Merriman, discuss wealth strategies, index funds, and the power of small-cap companies. They delve into diversification, disciplined strategies, and the psychology of successful investing. Whether you're a beginner or seasoned investor, this episode offers valuable tips for a robust financial future.

So, you've chosen to be a buy-and-hold investor following one of Paul's Sound Investing portfolios.  Now, the question is, what to buy?  It's time to become a knowledgeable shopper. Chris Pedersen describes the attributes that make an ETF or mutual fund more or less suited to implementing the portfolios we've discussed.  He then shows how to use Morningstar and Portfolio Visualizer to evaluate funds and points to the Best-in-Class recommended funds he's chosen. Finally, he demonstrates how the Portfolio Configurator can compare different fund family implementations and calculate the needed percentages of different funds for your personal portfolio choices.   Along the way, we learn that, like Warren Buffet, he has a thing for Diet Coke. Resources: AAII Article describing his Best-in-Class ETF selection process-  Video link to section of prior video showing more detail of the factor analysis he uses- Time mark- 46:00 Best-in-Class ETF's article  Best-in-Class ETFs Portfolio Configurator