Sound Investing

Q&A HighlightsHow does a 4-fund portfolio compare to a 10-fund portfolio?What is the best way to invest for a child’s future?Is it too late to use a diversified strategy like the 10-fund portfolio at age 50?Can I create and test my own custom portfolio using your tools?How should I invest during periods of inflation or uncertainty?What are some recommended fund options available at Schwab?Is a portfolio combining large-cap value and small-cap blend a good approach?Are there good alternatives to intermediate-term bonds?Who are some trustworthy voices in personal finance and investing?What is your opinion on separately managed accounts (SMAs)?Key TakeawayLong-term investment success is driven by asset allocation, discipline, and consistency—not complexity. A simple, well-structured portfolio that you can maintain through market cycles is often the most effective approach.Listen to the individual questions here.

Paul Merriman is dedicated to helping do-it-yourself investors build portfolios they can stick with for life. In this episode, he shares what he believes is the closest thing to a perfect long-term equity strategy he's ever seen.Paul traces the evolution of index investing — from John Bogle's cap-weighted S&P 500 funds to the academic research of Fama and French, whose factor-based work showed that small cap value, large cap value, and other equity asset classes have historically outperformed the broad market over time.For years, the best factor-based funds from Dimensional Fund Advisors (DFA) were only available through select advisors. That changed when Avantis launched its ETF lineup in 2019, followed by DFA's own ETFs — putting institutional-quality, factor-based investing within reach of every self-directed investor.Paul introduces a recommended ETF list spanning 10 equity asset classes across both fund families, explains the key differences between DFA and Avantis, and makes the case for owning both. He also covers where to buy them and why Fidelity's fractional shares make it easy to start with any dollar amount.Key topics: Factor-based vs. traditional index funds · Accessing DFA and Avantis ETFs · The case for owning both · Simplifying rebalancing with M1 FinanceThe Q&A Paul references was recorded separately.

In this episode, we explore how flexible (variable) withdrawal strategies can strengthen your retirement plan—and why fixed, inflation-adjusted withdrawals may increase risk over time.Using detailed distribution tables—including Table F1.3 (flexible withdrawals) and comparisons to Table D1.3 (fixed withdrawals)—Paul walks through real historical outcomes across decades to show how adjusting withdrawals based on market performance can improve long-term results.You’ll learn:Fixed vs. flexible withdrawal strategiesInsights from Tables F1.3, F1.4 vs. D1.3, D1.4How flexibility helps defend against bear marketsThe role of diversification and low-cost investingWhy oversaving creates powerful financial freedomIf you’re planning for retirement or already taking withdrawals, this episode may offer a smarter, more adaptable approach to generating income.Watch YoutubeBoot Camp 7 page

In Boot Camp #6, Paul Merriman walks through real historical data starting in 1970 to test what happens when retirees withdraw 3%, 4%, or 5% from a $1 million portfolio — adjusted for inflation — across some of the toughest market conditions in history.This episode covers:The difference between retiring with “enough” and “more than enough”How inflation quietly turns $30,000 into $130,000+ over 30 yearsWhat happens if you retire into a bear marketWhy 1% more in withdrawals can cost millionsS&P 500 vs. a globally diversified four-fund strategyHow diversification impacts lifetime income and legacy outcomesThe real risk of sequence of returns in retirementWhy some portfolios ran out of money — and others didn’tYou’ll hear side-by-side comparisons of:100% S&P 500 portfolios40/60, 50/50, and 60/40 stock-bond mixesA worldwide four-fund equity strategyFixed inflation-adjusted withdrawals over 30 yearsThe results may surprise you — especially when comparing 3%, 4%, and 5% withdrawal rates.If you're approaching retirement, already retired, or helping someone make distribution decisions, this episode breaks down the numbers in plain English and shows how small choices can create million-dollar differences.Next week: the strategy Paul considers the very best distribution method — for investors who retire with more than enough.Watch Video HereCatch up on the previous Boot Camp 2026 here

In Boot Camp #5 of 10, Paul delivers what he believes is the most important session in the series—especially for new and early investors (teens, 20s, 30s, and anyone just getting started).Instead of treating investing like speculation, Paul reframes it as building—or buying—a business over decades.Using clear, data-driven tables and “fine-tuning” comparisons, he walks through a simple, repeatable plan: start with $1,000 per year (about $83.33/month), increase contributions by 3% annually, and stay invested for 40+ years. You’ll see how long-term outcomes change based on asset allocation (100% stocks vs. 60/40 stocks and bonds), and why diversification can matter when markets go sideways.Paul also compares an S&P 500-only approach with a globally diversified “worldwide four-fund” strategy (mixing U.S. and international, large and small, value and growth). Along the way, he explains the real power source in early investing: your contributions, not short-term market performance—and why tax-advantaged accounts like a Roth IRA or Roth 401(k) can dramatically increase the impact of compounding over a lifetime.If you want a practical framework for long-term, low-cost, diversified investing, plus a clear-eyed discussion of volatility, sequence of returns, and retirement withdrawals (including the concept of a 5% annual withdrawal strategy), this episode lays the groundwork.Why Paul believes this is the most important boot camp sessionInvesting as building a business (the “portfolio mortgage” analogy)Starting with $83/month and increasing contributions by 3% annuallyUnderstanding the fine-tuning tables and historical market returnsS&P 500 vs. 60/40 portfolio: balancing growth and volatilityThe Worldwide Four-Fund Portfolio and the benefits of deeper diversificationHow sequence of returns impacts accumulation and withdrawalsWhy you rarely notice individual company failures inside diversified fundsThe long-term advantage of Roth IRA / Roth 401(k) compoundingStaying disciplined through crashes, recessions, and sideways marketsWatch Video

How much should you really have in stocks vs. bonds — and what happens when the market turns south with a vengence?In Boot Camp #4, we break down the fine-tuning asset allocation tables that show exactly how different combinations of equities and bonds have performed from 1970 through 2025. This episode goes beyond average returns and dives into what investing actually feels like during the worst 3-month, 12-month, and 60-month market declines.You’ll learn:Why equities have historically dominated bonds for long-term retirement investingHow the S&P 500 compares to diversified strategies like the Four-Fund portfolioThe real impact of worst-case drawdowns (including 50%+ bear markets)What happens to a 100% stock portfolio during retirement withdrawalsHow 50/50, 60/40, and other stock-bond allocations reduce volatilityWhy median returns matter — and why averages can misleadHow to control risk through asset allocation, low costs, tax efficiency, and index investingWe explore real historical data — including the 1973-74 bear market, the 2000-2002 tech crash, and the 2008 financial crisis — to help you understand both accumulation and retirement distribution phases.Whether you're in your 20s building wealth, in your 50s preparing for retirement, or already retired and managing withdrawals, this episode helps you align your portfolio with your risk tolerance, return needs, and long-term financial goals.If you want to be a confident do-it-yourself investor — without paying a 1% management fee — this episode gives you the framework to make informed decisions about stocks, bonds, diversification, and risk control.Watch Boot Camp #4 video

Welcome to Bootcamp #3 of the Sound Investing Series with Paul Merriman — where real investing data meets practical long-term strategy. 📈 In this session, Paul breaks down the performance of diversified portfolios vs. the S&P 500 using decades of historical data going back to 1970. You’ll learn how different combinations of equity asset classes have performed in good markets, bad markets, and everything in between.📊 What You’ll Learn in This Video:• A deep dive into the Sound Investing Portfolios and how they work for DIY investors• Historical returns of 2-, 4- and multi-fund strategies compared to the S&P 500• Why diversification matters and how it can reduce risk and improve returns• How different portfolios performed in tough decades like the 1970s and 2000s• Practical takeaways for long-term investors, retirees, and those choosing equity allocationsWhether you’re a beginner or experienced investor, this Bootcamp episode gives you real numbers and evidence-based insights to help shape your portfolio strategy with confidence. 💡 Topics Covered:✔ Sound Investing Portfolios explained✔ Risk vs. return comparison✔ Historical performance of diversified portfolios✔ The role of small-cap & value stocks✔ Why a 2-fund strategy can compete with the S&P 500✔ How to think about risk in real market conditions🔗 Useful Resources & Tables - https://www.paulmerriman.com/sound-investing-portfolios-2026To follow along with the charts, tables, and data Paul references during the presentation, check the pinned links and video notes.📈 Perfect For:✔ DIY investors✔ Retirement planners✔ Anyone curious about portfolio diversification✔ Investors who want to avoid common mistakes📩 Questions? Paul encourages you to leave comments and reach out — he often uses viewer questions in future episodes!➡️ Don’t forget to subscribe for more deep-dive investing education and future Bootcamp episodes from the Merriman Financial Education Foundation: Paul Merriman’s mission is to help you make more money with less risk and more peace of mind.

In this second session of our 10-part Boot Camp series, we dive into the piece that’s helped shape decades of investing decisions: The Ultimate Buy & Hold Portfolio.For nearly 30 years, this research—co-created with the late Rich Buck—has explored a simple but powerful question: What happens when you go beyond the S&P 500 and build a lifetime portfolio across 10 equity asset classes?Starting with data back to 1970, we walk through the math of compounding, diversification, and disciplined rebalancing. You’ll see how adding small amounts of large value, small cap, REITs, international equities, and emerging markets historically increased returns—without meaningfully increasing risk. The result? A dramatic difference over time, powered by patience and structure.Whether you’re new to these concepts or have followed this work for years, this episode breaks down the numbers, the lessons, and the real-world implications for long-term investors.This recording is also a tribute to Rich Buck—an extraordinary collaborator whose work on this topic has reached millions of investors.Download the tables and watch the video, follow along, and join us as we revisit one of the most impactful investing frameworks we’ve ever created—and set the stage for next week’s deep dive into the Sound Investing portfolios.

What if small decisions — just a half-percent here or an extra year there — could change your financial future by millions?In this episode, we continue our annual Boot Camp series by tackling one of the biggest forks in the road investors face: stocks and bonds. Drawing on nearly a century of academic research and data, we break down what the math actually tells us about compounding, risk, diversification, and long-term returns.You’ll hear why:Tiny differences in returns can mean millions over a lifetimeBonds are designed for safety — not wealth creationEquity asset classes behave very differently from year to yearDiversification across asset classes smooths volatility and improves outcomesTrying to “pick winners” is a losing game — and why owning the whole market worksThis episode is educational, not personal advice — think of it as a roadmap that helps you ask better questions and make more informed decisions. Important: The tables and charts referenced in this episode are available in the PDF. Watching the companion video will make these concepts even clearer.If you care about making smarter long-term decisions for yourself and your family — this is one to share.

Sometimes the best moments are the unexpected ones. This week brought one of those moments when Daryl Bahls delivered an extraordinary surprise: access to every table used across our entire investing Boot Camp Series — months of work, ready ahead of schedule.That gift makes it possible to move forward faster, including setting up pages for the upcoming Series and potentially releasing the tables before all the podcasts and articles are complete.The White Coat Investor: 150+ Portfolios That WorkWe revisit the White Coat Investor article “150 Portfolios Better Than Yours” (now over 200 portfolios), originally published in 2014.The key lesson:There is no single “best” portfolio — most of the portfolios are legitimate and effective. What matters most is:Choosing a sound portfolioUnderstanding why it worksStaying the course over decadesEarly success can be misleading, but the portfolio you choose in the beginning can mean millions of dollars more in the long-term.Why Portfolio Design Matters So MuchUsing historical data going back to 1970, we explore how different strategies produce dramatically different outcomes over time:S&P 500 only vs. globally diversified portfoliosMulti–asset-class investingValue-focused portfolios (U.S. and international)Even small starting amounts can lead to large differences over a lifetime.What We Do — and What We Don’t Do To Help Investors We are:Focused on educationDedicated to do-it-yourself investorsGrounded in academic research and evidence-based investingWe are not:Financial plannersEstate plannersTax advisorsOur goal is to help investors build portfolios they can trust through good markets and bad — with the potential to land in the top 5–10% of long-term outcomes.Preview: The 10-Part Boot Camp SeriesOver the coming weeks, we’ll release a comprehensive boot camp covering:Stocks vs. Bonds — why this decision alone can be a $10 million differenceEquity Asset Class Selection — based on academic research, not trendsSimple Sound Investing Portfolios — small, powerful, manageableAdding Bonds Intelligently — controlling risk without killing returnsLong-Term Contributions — what steady investing really looks likeFixed Withdrawal Strategies — taking distributions when you retire with only "enough"Flexible Withdrawal Strategies — especially for those who’ve oversavedTarget-Date Funds & Glide Paths — with added diversification insightsETF Selection — why DFA and Avantis may help investors stay the courseInvesting for Children & Newborns — including new retirement account considerationsEach topic will eventually include:A podcast episodeA written articleSupporting data tablesDaryl has now produced 247 educational tables, all designed to support smarter portfolio decisions.  You will see all of them during the 10 week series.

Upcoming Event + What’s NewBefore jumping into today’s questions—there are some good ones—I want to share a quick note.I’ll be at the Annual RetireMeet on March 7 in Bellevue at the Maidenbauer Building. I’ll be there all day at the booth and will be discussing the inside story on diversification, including new thinking on rebalancing that I believe you’ll find useful.Christine Benz —HOW TO RETIREDon McDonald — RETIREMENT EVOLUTION: FROM NONE TO FUNTom Cock — RETIREMENT INCOME: THE 4% RULE & BEYONDKevin Peterson — GETTING THE MOST FROM MEDICAREJoe Saul-Sehy — COMMON MISTAKES THAT MAKE RETIREMENT MISERABLEThe event is available in person and online. In-person attendees receive lunch. Online attendees pay a small fee that supports nonprofits focused on financial education.I also spent time this week with Daryl Balls, working on updates to the quilt charts and new tables. We’re excited to share those soon, along with the next Boot Camp series, starting later this month.Questions of the DayHow can I avoid getting scammed by a bad financial advisor? 04:03How can my parents decide when to start Social Security? 07:08How do I identify my target asset allocation if I am 41 and plan to retire at 65, taking Social Security at 70 and with a pension? 08:47Can you help me build a sample asset allocation? 11:46What should I learn first to understand asset allocation? 14:10How do target date funds fit into asset allocation? 17:42How does VTSAX fit into this strategy? 17:04My 401(k) only offers Vanguard Total Market, Mid-Cap Index, and Small-Cap Index. Can I build a good portfolio? 20:40If I’m contributing monthly, should I rebalance using contributions or make separate trades? 27:59I have a closed 401(k) with a target date 2050 fund. Is that a good core holding? 28:50A Final ThoughtI recently spoke with an investor who realized they didn’t need to draw from their investments at all, thanks to Social Security and a pension—even with nearly $2 million invested.When you don’t need the money, you get to choose your medicine—aggressive or conservative.We’re excited about the upcoming Boot Camp, new tables, and educational tools. If we can do a better job teaching, our hope is that you’ll do a better job investing—for yourselves and for those who count on you. Links Mentioned in This EpisodeInvestor Education⁠Get Smart or Get Screwed ⁠Truth Tellers – Social Security⁠Social Security Made Simple⁠ by Mike Piper⁠Mike Piper⁠ – Oblivious Investor When to Take Social Security: Pros & Cons – Jim Dahle (White Coat Investor)⁠https://www.whitecoatinvestor.com/when-to-take-social-security-a-pro-con/⁠Asset Allocation & Target Date Funds⁠Two Funds for Life ⁠– Chris Pedersen⁠Sound Investing Portfolio Series⁠ (Boot Camp – prior year)⁠Ultimate Buy & Hold Strategy⁠⁠Fine-Tuning Your Asset Allocation⁠Event⁠Annual RetireMeet – Bellevue (March 7)⁠Research & Tools⁠Quilt Charts and Tables (Paul Merriman / Daryl Balls)⁠

In this week’s Sound Investing episode, Paul Merriman answers a wide-ranging set of listener questions — from choosing ETFs and building portfolios to managing risk in retirement and investing wisely at every age.One of the biggest takeaways? There is no universally “best” ETF or portfolio. The right answer depends on your goals, risk tolerance, time horizon, and — just as importantly — your ability to stick with a strategy during difficult markets.Here are some of the highlights from the episode:What’s the “best ETF”?Paul explains that for simple exposure (like the S&P 500), the lowest-cost option often wins. But once you move into areas like small-cap value or factor investing, fund construction and index methodology matter far more than expense ratios alone.Single-fund vs. DIY portfoliosPaul compares all-in-one solutions like AVGV (Avantis All-World Value ETF) with building the same asset classes yourself. While a DIY approach can sometimes produce higher returns, it also requires discipline and comfort with tracking and rebalancing multiple funds.Portfolios for different stages of lifeYounger investors (30s): Paul favors all-equity portfolios for long time horizons, assuming the investor can tolerate volatility.Pre-retirees and retirees: The focus shifts to managing downside risk, withdrawal rates, and behavioral comfort — not maximizing returns at all costs.Retirement withdrawals and sequence riskUsing historical examples starting in 1970, Paul shows how withdrawal rates (4%, 5%, 6%) and portfolio composition can mean the difference between ending with millions — or running out of money entirely.Mutual funds vs. ETFsETFs have become more tax-efficient, more flexible, and easier to trade — making them ideal for the smaller, diversified portfolios Sound Investing now recommends.How to self-manage a portfolioPaul walks through how to:Choose equity asset classesUse best-in-class ETF recommendationsRebalance intelligentlyInvest weekly without overcomplicating the processResources mentioned in the episode:Sound Investing Boot Camphttps://paulmerriman.com/bootcamp/Ultimate Buy & Hold Portfoliohttps://paulmerriman.com/ultimate-buy-and-hold-portfolio/2025 Sound Investing Portfolioshttps://paulmerriman.com/sound-investing-portfolios/Avantis Investors & AVGVhttps://www.avantisinvestors.com/Morningstar Fund Comparison Toolshttps://www.morningstar.com/Ben Felix (Canadian investing insights)https://www.pwlcapital.com/profile/benjamin-felix/REIT background and tax considerationshttps://en.wikipedia.org/wiki/Real_estate_investment_trustPaul closes the episode with a reminder that diversification means always owning some underperformers — and that’s not a flaw, it’s the price of long-term success.Thanks for listening, and we’ll see you next week.

For first-time listeners, welcome! In this opening episode of the year, Paul Merriman—founder of the Merriman Financial Education Foundation—looks back at 2025 to uncover what the markets taught us and how those lessons can help do-it-yourself investors make better decisions going forward.Despite endless predictions about what markets should do, Paul reminds us that his role isn’t to forecast the future—but to help investors understand risk, return, and how to build portfolios they can truly stick with.In this episode, Paul explores:A surprising result from the “Magnificent Seven” stocksWhy diversification mattered more than ever in 2025How different equity asset classes really performedWhat 56 years of data (1970–2026) tells us about staying the courseWhy portfolio structure matters far more than chasing winnersTwo very different—but valid—approaches to fixed income investingIf you want perspective instead of predictions—and data instead of hype—this episode is a powerful way to start the year.

The following are Dr. Pass’ note to his podcast: This week we end 2025 with a Pediheart tradition - an episode on personal finance for medical professionals with noted authority on index investing and personal finance, Mr. Paul Merriman. Paul is a retired investment advisor who now has a popular podcast "Sound Investing" and website in which he offers advice on investing for 'do it yourself' investors. In this week's episode, the 5th of his visits to Pediheart, Mr. Merriman discusses 'factor investing' via index-like ETF's and funds. He also reviews who he believes might benefit from a financial advisor, what sort of advisor most should seek out and why he believes that many do not need one if they can 'stay the course'. Resources mentioned in today's podcast are below. Wishing all a happy and healthy new year in 2026. Paul's website:https://www.paulmerriman.com/#gsc.tab=0'Best In Class' ETF's:https://www.paulmerriman.com/Best-in-Class-ETF-Recommendations2025#gsc.tab=0Sound Investing 'Quilt Charts':https://irp.cdn-website.com/6b78c197/files/uploaded/(K)_Quilt_Charts_(1928-2024)_-_2024_Returns_(1).pdfDFA 'Turn Out The Noise':https://www.dimensional.com/filmAs a reminder, all of the information provided in this week's episode should be considered entertainment and all financial decisions should be vetted with professionals or knowledgeable and trusted friends/family. 

In this episode, Paul shares the thinking behind what he believes may be one of the most important projects of his career—a project guided by a single goal:That every investor who follows our work will know how to invest for the rest of their life.To explain why that goal matters, Paul walks through the forks in the road every investor eventually faces—from betting on individual companies to owning entire markets, from chasing excitement to embracing simplicity.Drawing on real experiences, including private investments that went to zero and one that unexpectedly turned into millions, Paul explains why diversification beats prediction, how a simple portfolio decision may quietly add about 1% a year over time, and why many academics draw a clear line between investing and speculation.This episode isn’t about chasing returns.It’s about building a plan you can live with—through good markets and bad—for the rest of your life.If you’re looking for clarity, discipline, and a framework that helps you stay the course, this conversation is a powerful place to start.Next week, I’ll be reviewing what we learned in 2025—and what those lessons may mean for 2026 and beyond.Thank you, and happy holidays to you and your family.

Compounding Project Podcast – Episode 36In Episode 36 of The Compounding Project Podcast, legendary investing educator Paul Merriman shares timeless insights on long-term investing, the power of compounding, and how everyday investors can build lasting wealth.Paul explains why starting early is one of the most important financial decisions you can make, how compound growth works quietly over decades, and why low-cost index funds remain the foundation of successful investing strategies.This episode dives deep into portfolio diversification, the hidden impact of investment fees, and the role of small-cap value investing in improving long-term returns. Paul also offers practical, evidence-based guidance for young investors, parents, late starters, and anyone seeking financial independence through disciplined investing.Whether you’re new to investing or refining an existing portfolio, this conversation delivers actionable lessons on building wealth the smart way.Starting early and staying consistent matters more than market timing or stock picking.Low-cost index funds and diversification are the most reliable tools for long-term wealth building.Small-cap value investing and minimizing fees can significantly increase lifetime investment returns.Your Money and Your BrainThe Psychology of MoneyThinking, Fast & SlowSpending Your Way to WealthWatch the full episode for expert insights on investing, compounding, and financial freedom.Follow Paul Merriman On Social Media: ⤵︎📷 Instagram: /   / paulamerriman2012  📱 YouTube: /    / @paulmerrimansoundinvesting  To Know More,Follow Sathish Gajula On Social Media: ⤵︎ 📷 Instagram: /   / compoundingproject  📱 YouTube: /    / @compoundingproject  Timestamps:00:00 Episode Trailer02:00 Intro to Wealth and Index Funds03:20 The Million Dollar Decision07:04 Investing Tips for Young Parents12:47 Saving When Money Feels Tight15:35 Stocks vs Bonds19:58 Rethinking Stock Market Risk24:36 Why Investing Is Easier Today27:06 How Fees Hurt Returns29:08 When Bonds Make Sense32:56 Investing Across Generations34:58 Portfolios by Age35:52 Starting Late in Investing41:05 Defensive Investing Basics42:10 Why Stocks Matter Most43:04 Beating the S&P 50048:09 Market Returns Explained51:22 Why Diversification Matters54:49 Fees and Long-Term Returns58:28 Small Cap Value vs Total Market01:03:25 Equal-Weight S&P 50001:08:36 Handling Market Volatility01:11:05 Picking Small Cap Value Funds01:12:50 Trust in Investing01:16:42 Hotseat Questions

Over the last couple of weeks, I’ve been recording a series of Q&As that came out of a presentation I gave in November for the American Association of Individual Investors — AAII.At the end of that nearly two-hour talk, I promised that I’d do a podcast answering every single question that came in. Well… there were 36 questions. That’s a little too much for one episode, so we broke them into three parts.This is Part 3 — the final 12 questions. If you haven’t heard Parts 1 and 2 yet, we’ll link those in the show notes so you can catch up.Before we jump in, I just want to say: I’m a huge fan of AAII. I started teaching their local chapters way back in 1984, and over the years I think I’ve presented to just about every chapter in the country — sometimes in person, sometimes by Zoom — but always to people who are genuinely committed to learning how investing works.If you’ve never checked out AAII, I’ll include a link in the notes for a low-cost trial membership. Take a look around and see if it’s a resource that fits your investing journey.Alright — let’s get to the last 12.Will you develop strategies using the equal-weighted S&P 500? 01:44Can you recommend advisors who follow your strategy? 07:20Should I move mutual funds to ETFs in taxable accounts despite taxes? 11:26With markets at highs, should I keep dollar-cost averaging or rebalance? 16:17What portfolio fits 10 years to retire and 20–30 years of decumulation? 24:08Will the configurator shift to only Avantis/DFA funds in 2026? 30:37What does “inflation-adjusted fixed withdrawals” mean? 33:56How should I invest an inheritance for kids/grandkids ages 2–45? 38:21Ultimate Buy-and-Hold vs. two- or four-fund strategies — which is better? 49:03Should political conditions change retirement portfolio decisions? 59:12How do I find a fee-based/hourly advisor (Rhode Island question)? 1:05:56Should very conservative 91-year-olds move beyond bonds and cash? 1:13:28Part 1 of the AAII Q&A Series Part 2 of the AAII Q&A Series AAII trial membership offer (the ~$2 first month deal) Boot Camp series hub Fine-Tuning Your Asset Allocation table / lessonSound Investing / portfolio decade return tables — Fixed vs. Variable Withdrawal episode/article H-2A table referenced in Q9 Chris Pedersen Boot Camp presentation (Two-Fund for Life) Garrett Planning Network advisor directory HelloNectarine hourly advisor platform PlanVision / Mark Zoril reference 

Paul continues his three-part series responding to questions from his November 8 AAII presentation. In this episode, he digs into risk-parity portfolios, the role of gold, how the 10-Fund Strategy compares to the S&P 500, growth vs. value, rebalancing discipline, and how to choose the right bond allocation in retirement. If you were at the AAII event, you’ll find the exact 12 questions listed below so you can jump straight to your topic.12 AAII Questions CoveredThoughts on risk-parity portfolios during retirement distributions? 2:12Was the 10-Fund Strategy originally meant to mirror 60/40? 14:51Should investors add gold (IAU) after its recent streak? 21:40What is a double-rung bond ladder? 24:03Which of the nine portfolios has the best return per unit of risk? 26:36Analysis of growth funds outperforming over the last decade? 31:36How to invest new money when the economic outlook looks uncertain? 36:40Will the AAII slide deck be available? 38:54How often do you rebalance? 39:25How do you tune out the noise and stay the course? 41:13How to choose your bond allocation in the distribution phase?  45:25Can you share ETFs for the bond portion of a retirement portfolio? 52:12Resources MentionedAAII presentation slides10-Fund vs. S&P long-term comparison Fine-Tuning Your Asset Allocation tablesSound Investing tablesRetirement withdrawal tablesLifetime Investment Strategy calculatorBest-in-Class ETF recommendations

Recorded from our new home on Bainbridge Island and released on Thanksgiving, this episode is equal parts gratitude and practical investing help. I open with my annual tradition of writing a fresh Thanksgiving list—people, communities, and institutions that have shaped my life and this work. I’m especially thankful for you, the DIY investors who keep showing up to learn, ask thoughtful questions, and hopefully staying the course.I also share appreciation for the resources that support disciplined investing—Morningstar, the Bogleheads community, and the American Association of Individual Investors (AAII). After a recent AAII presentation (over 150 attendees), we ran out of time for a live Q&A. I promised to respond to every legitimate question, so this episode kicks off a multi-part series answering them in depth.Here are the first 12 AAII questions covered in today’s episode:(9:42) What alterations in portfolio construction do you recommend in transition from accumulation to distribution in order to maximize diversification of uncorrelated assets, safe withdrawal rates, and spending? ⁠Table h2a (21:21) I’m a huge fan of your U.S. two-fund portfolio. Why is diversification between large-cap growth and small-cap value so important, while diversification between VTSAX and AVUS (within the same asset class) is not? Should we diversify fund selection within the same asset class? Table K2b(26:49) Have you considered creating a quilt chart for the Ultimate Buy-and-Hold portfolios with a 70/30 U.S./international split? Table K1a and H2a and H2b(32:04) You appear to have avoided any mention of mid-cap. Should we be ignoring mid-cap funds?(33:35) What do you think about adding alternative investments to the portfolio (for example, managed futures)?(38:39) Are your recommendations for everyone, or does the game change when you have a pension for life?(43:07) I was fighting with the Zoom link and arrived 25 minutes into the presentation. Will a video recording be available to participants?(44:08) What would you expect the difference between the S&P 500 cap-weighted index (VFINX)and the S&P 500 equal-weighted index (VADAX)  to be?(49:53) The four-fund portfolios are equal-weighted across their asset classes, which results in a value tilt overall. Why weigh them equally?(54:35) One might think that adding international large-cap growth and international small-cap value to the two-fund approach would improve results. Does international allocation mainly reduce volatility/drawdown length, or also increase returns?  H2a and H2b(56:26) Can you buy DFA and Avantis funds at Charles Schwab?(58:40) What should you do if you have a lump sum to invest today, but current market highs make entry uncomfortable? https://awealthofcommonsense.com/2025/11/do-we-need-a-long-bear-market/

Paul Merriman brings 60+ years of investing experience to the Retire Today podcast, breaking down what really determines retirement success. Most investors think it’s about picking the right fund or timing the market—but Paul says the biggest threats aren’t headlines. They’re costs and emotions.In the 1960s, investors routinely paid 8.5% to buy a mutual fund. Today fees are far lower, but the impact is still huge. Paul notes that even a 1% difference in expenses “can cost you about $3.5 million over a lifetime” because compounding works both for you and against you.Behavior can cost even more. “When the market goes down, people panic,” Paul explains. Selling in a downturn—the “I just can’t take it anymore” moment—means locking in losses and missing the recovery. His advice: don’t time the market. Build a plan you can actually stick to.When asked what separates retirees who thrive from those who struggle, Paul’s answer is simple: education. What you learn and who you learn it from shapes your decisions—and helps you stay calm when markets get rough. That’s why his nonprofit work focuses on teaching diversified, simple, low-cost strategies through guides like Sound Investing Portfolios and We’re Talking Millions!Paul once promoted a 10-fund “Ultimate Buy-and-Hold” portfolio, but even John Bogle told him it was too complex. After testing simpler versions, Paul found that two-, four-, and six-fund portfolios often matched or beat the original. You can explore these models at PaulMerriman.com/portfolios. The takeaway: simplicity makes discipline easier.We also discussed retirement withdrawals. Paul recommends a flexible approach: take a bit less after down years and a bit more when markets are strong. This can reduce stress and help your portfolio last. “If you know how long you’re likely to live and how much you have,” he says, “that knowledge gives you freedom—not fear.”If you’re approaching retirement, here’s Paul’s short list:Diversify with low-cost index funds. Focus on the right mix, not the perfect pick.Match risk to reality. Choose a stock/bond split you can live with in bad markets.Use flexible withdrawals. Adjust spending based on market conditions.Keep behavior boring. Automate rebalancing and ignore predictions.Invest in education. Knowledge keeps emotions from running the show.You’ve worked hard to build your savings. Now build a plan that works just as hard—quietly, efficiently, and with confidence. Watch the full conversation on YouTube for more on fees, behavior, portfolio design, and practical withdrawal strategies.