While the industry generally agrees the most important investment decision is your choice of asset allocation, Paul makes the case that the choice between being a do it yourself investor vs. hiring a professional advisor is much more impactful over a lifetime. Paul discusses the many challenges of both decisions and finishes by showing DIY investors what they should do to be sure they address all of the risks investors accept, with or without a professional advisor. Paul uses ChatGPT as the source to a number of lists. Paul also mentions free books: If You Can by William Bernstein We’re Talking Millions — 12 Simple Ways To Supercharge Your Retirement 2-Funds for Life: a quest for simple and effective investing strategies 101 Investment Decisions Guaranteed to Change Your Financial Future Get Smart or Get Screwed: How To Select The Best and Get The Most From Your Financial Advisor  First Time Investor: Grow and Protect Your Money And for DYI investors to learn the most important investment decisions please visit:  https://paulmerriman.com/bootcamp-for-investors-2023/

Paul starts the podcast with an update on the Bogleheads Conference.  For those who want to see a sample of last years presentations here is a link to all of the 2022 presentations. https://boglecenter.net/bogleheads-university/ For those interested in 2023 Conference, including list of speakers:  https://boglecenter.net/conferences/ For this interested in exploring John Bogles archives: https://boglecenter.net/bogle-archive/ Paul is working on a list of 80 quotes investors might use to remind themselves of the important investment beliefs that keep investors on track.  He asks listeners to send him the quotes that have kept you on track.  Please send to paul@paulmerriman.com. Our Truth Tellers are individuals or organizations that, in our opinion, are committed to helping investors better understand the facts and act in their own best interest. Their work and voice consistently provides useful, evidence-based information and advice, often on topics that we do not cover, and we want you to be aware of them to help you be a better long-term investor. Here is a Truth Teller page for Ben Felix. Ben is  the host of a popular YouTube series.  His over 100 videos are some of the best teaching tools in the industry.  The following are a few samples: Is Investing Risky? Dave Ramsey's Investing Advice Small Cap and Value Stocks Plus  Ben and Cameron Passmore interview other financial experts on their podcast, Rational Reminder.  They have made a special effort to interview many of the academics who have studied the investment process. Here is a wonderful interview with: Prof. Meir Statman: Financial Decisions for Normal People 5:16 Meir defines Behavioral Finance 15:37 The difference between a "normal" investor and a rational one 21:48 Why normal investors like lottery-like assets despite low or negative expected returns 26:24 The downsides to the "consume from dividends but don't dip into capital" rule 32:59 Why dollar-cost averaging is so persistent, when it is well-known to be rationally suboptimal 36:48 What makes strategies like covered calls and structured products so attractive to normal investors 43:19 Why normal wealthy people seek to invest in hedge funds and private equity, despite their questional benefits to a rational investor 48:24 How normal investors should deal with currency hedging in global portfolios 53:03 How behavioral portfolio theory differs from mean-variance portfolio theory 1:00:21 How an optimal behavioral portfolio differs from an optimal CAPM portfolio 1:09:21 How the typical risk-profile questionnaire can be adapted to improve the behavioral dimension of portfolios 1:15:53 How financial advisors can use behavioral finance principles to improve client outcomes 1:17:55 What puts financial advisors in a position to give well-being advice 1:23:27 Meir defines success in his life  

There is no question AI is a hot topic.  I have watched “end of the world” interviews with people who know a lot more than I do about AI.  In a recent poll, noted in The New Yorker, half of A.I. scientists agreed that there was at least a ten-per-cent chance that the human race would be destroyed by A.I.”  I have also watched marketing people use Chat GPT to create very good marketing pieces.   So I thought it’s time to find out how good a source of general and specific investment advice Chat GPT might be.  Will it help people understand the important investment decisions that will lead them to higher rates of return within their personal risk limits.  Will it help them to understand the sources of information that will possibly put more money into the presenters pocket or the investors pocket. Since I recently discussed Dave Ramsey,  the very controversial and very popular guru, I thought it would be interesting to see what Chat GPT would say about Ramsey’s advice. On this podcast I ask Chat GPT: What are the pros and cons of advice from Dave Ramsey?  What is Dave Ramsey's position on index funds vs. actively managed funds? I asked again:  How does Dave Ramsey feel about index funds? Does Dave Ramsey recommend an advisor be a fiduciary? Are all the advisors that Dave Ramsey recommends fiduciaries?   Here are links to what Motley Fool has to say about Dave Ramsey’s advice: https://www.fool.com/the-ascent/personal-finance/articles/dont-follow-this-dave-ramsey-advice-about-getting-out-of-debt/ https://www.fool.com/the-ascent/personal-finance/articles/4-things-dave-ramsey-is-dead-wrong-about/ The following links are to Dave Ramsey’s literature: https://www.ramseysolutions.com/retirement/why-dave-prefers-up-front-fees https://cdn.ramseysolutions.net/media/pdf/daves_investment_philosophy.pdf

Financial expert Dave Ramsey joins Chris, Daryl, and Paul to discuss the lawsuit he is facing and recommendations to eliminate conflicts of interest. They delve into the performance of small cap value and compare actively managed funds to index funds. The hosts also emphasize the importance of minimizing costs and maximizing efficiency in investing.

Paul starts the podcast with a brief discussion about the new “financial Literacy for All Students” project at Western Washington University (WWU).   The Merriman Financial Education Foundation, WWU, and Paul personally, are working together to make this project a reality in the next two to three years. The main topic of the podcast focuses on the returns investors should expect in the future.  Paul reviews the 5, 10, 20, 50 and 80 years ending 2022,as reported by Dimensional Fund Advisors 2023 Matrix Book.  He also reviews the DFA asset class returns from 2000 to 2022.  The period starting in 2000 is used as 1999 was the end of one of the longest market runs in history.  Paul compares both the U.S. and international returns for large, small, value, growth and NASDAQ indices.  The only other tables that are referenced are the 1928-2022 1,15 and 40 year returns.Paul ends the podcast asking listeners to email him (paul@paulmerriman.com) with any questions or comments they have regarding the  recent series of 8 major investor decisions.  These topics were covered in articles, podcasts and videos on the following pages.   Ultimate Buy and Hold Strategy Sound Investing Portfolios Risk and Return History Fine-Tuning Your Asset Allocation Fixed Contributions Fixed Distributions Flexible Distributions The Simple Story About 2 Funds for Life Selecting the Best in Class ETFs

"It’s good to learn from your mistakes.  It’s better to learn from other people’s mistakes.”  Warren BuffettThere are easy choices in the investment process.  Much of the advice we offer is very simple and without much disagreement.  On the other hand there are choices that must come after a thoughtful understanding of long term historical results along with an understanding of your need for return and personal risk tolerance.Jerzy Gregorek says it simply (not about investing).  “Hard choices, easy life.  Easy choices, hard life.”I would make a change in that quote to represent what I know about investment choices.Easy choices, good life.  Hard choices, great life.This podcast is a quick review of  the series of articles, podcasts and videos that address 8 investment decisions that Paul feels require deeper consideration and more statistical information than the simple choices that most people understand intuitively.Here are links to 8 pages that offer the article, podcast, video and tables about the important investment decision each addresses. Ultimate Buy and Hold Strategy Sound Investing Portfolios Risk and Return History Fine-Tuning Your Asset Allocation Fixed Contributions Fixed Distributions Flexible Distributions The Simple Story About 2 Funds for Life Selecting the Best in Class ETFs

I have a number of things on my bucket list.  One is to get "We’re Talking Millions!” in the hands of a million young people.  It would seem an impossible challenge but I know it can be done.  One of the reasons I know it is possible is because one of our podcasts has been opened by 977,088 listeners.  Let’s see if we can take it to a million!   Paul has been writing articles about index funds for decades.  The most read is “30 reasons to fall in love with index funds”.  While the most common advantages are low expenses, low turnover, massive diversification, Paul suggests the #1 reason may be keeping investors as far away as possible from commission-based sales people, con artists and other conflicts of interest typically not associated with index fund providers. Many do-it-yourself investors rely of services that have a large presence on the internet. A wonderful aspect of the internet is the ability to do meaningful due diligence on the reputations of those offering their “special ways” to perform better than index funds.  But can you depend on the information you find on the internet? Paul discusses the services of “search engine suppression consultants.”  These very clever people are wizards at making bad information disappear.  In fact, in many cases their fees are not earned until all the damaging information is totally eliminated.  He reads an example of one such article that claims to address the pros and cons of a well-known investment manager.  The pros are strong convincing points, while the cons are almost the mistakes that we would expect would be found in any firm. Paul also addresses the outrageous life-changing fees teachers are being charged and the work of an unscrupulous sales person who holds himself out as a friend of his community. The bottom line: None of these bad investments would be available through those who supply very low-cost index funds. The low costs don’t leave any room to take advantage of the investor.

Over the last 8 weeks Paul, Chris and Daryl have produced a series of podcasts and videos on 8 of the most important investment decisions investors make.  Along with these podcasts and videos Paul and Rich have written Marketwatch articles on the same topics.  As a part of the discussion of these important decisions Daryl has updated over 200 tables of hypothetical returns that are used to support the recommended conclusions. This week, Ben Carlson, one of our Truth Tellers, has written an article on the inherent weaknesses of  backtesting.  While we have taken steps to minimize the potential problems with backtesting, Paul thinks Ben’s comments are worthy of consideration.  Along with his recent article, “10 Things You Can’t Learn From a Backtest,” we have included links to two of Ben’s past articles on the same topic.  Backtests are Unemotional.  Humans are not.Roughly Right or Precisely Wrong

Paul discusses ways a parent or grandparent might explain 2 Funds for Life to a young adult. In the discussion Paul suggests using the following tables to make a handful of important decisions.Tables 1-4 from his Follow the Math comments- Table 1 Table 2 Table 3 Table 4 Equity Index Returns (1928-2022) to compare the returns of major equity asset classesTable B13 to show what happens when you combine a small amount of small cap value with a mostly bond portfolioTable B14A to show the impact of combining a small amount small cap value with a large cap blend fund The first objective is to help a young investor understand how a target date fund works and why it is likely to provide a reliable source of income for the balance of their life. The second objective is to show a young investor how a small amount of a small cap value fund, along with a target date fund, will likely help build an investment portfolio that will allow them to retire with substantially more income and leave more to their heirs. For the parent or grandparent it will be helpful to watch the videos on Fixed and Flexible Distributions.

If a retired investor has the ability to use a flexible distribution strategy it will likely produce one of the best financial outcomes in retirement.  In this presentation Paul compares the difference in returns and risk between the fixed and flexible distribution strategies.    The discussion compares returns and total distributions for two of the 9 sound investing portfolios.   In the presentation he makes use of the following tables:Table D1.3  Fixed Distribution S&P 500 Equity Portfolio  ($30,000/yr)Table D1.5  Fixed Distribution S&P 500 Equity Portfolio  ($50,000/yr)Table E1.3  Flexible Distribution U.S. 4-Fund Equity Portfolio (3%/yr)Table E1.4  Flexible Distribution U.S. 4-Fund Equity Portfolio (4%/yr)Table E1.5  Flexible Distribution U.S. 4-Fund Equity Portfolio (5%/yr)Table E1.6  Flexible Distribution U.S. 4-Fund Equity Portfolio (6%/yr)For those interested in the historical returns of the 9 portfolios, as well as the complete list of flexible distribution tables:   50/50 Sound Investing PortfolioFlexible distribution tables (50/50 U.S./Intl)Flexible distribution tables (70/30 U.S./Intl)