Sound Investing

Prior to discussing his topic of the day, Paul shares his thoughts on a recent podcast [https://talkingrealmoney.com/talking-real-money/a-dimensional-mind?ss_source=sscampaigns&ss_campaign_id=682ba1842f1ef604027d7c6a&ss_email_id=682ba1cd778d0034b511f540&ss_campaign_name=Singing+Moneygram&ss_campaign_sent_date=2025-05-19T21%3A25%3A38Z] featuring Truth Tellers Tom Cock and Don McDonald, joined by Weston Wellington from Dimensional Fund Advisors. Weston weighs in on some of the most critical issues facing investors right now. Here are the topics on the podcast with Tom Cock and Don McDonald- 0:53 Weston Wellington on volatility and market uncertainty 2:47 Why volatility is the “price we pay to play” 3:32 The media’s role in investor anxiety 4:57 Should investors act on daily financial advice? 6:15 Portfolio changes should reflect personal changes, not headlines 7:24 Spam vs. Motorola: A lesson in stock picking 9:44 Dimensional’s stance on individual stock ownership 10:02 Diversification as “the closest thing to a free lunch” 11:07 Are alternative investments the new magic bullet? 12:43 Mutual funds vs. ETFs—what works best and when 15:27 Industry evolution: from 8% loads to indexing dominance 18:29 Where Dimensional fits in the modern fund landscape 21:01 AI vs. “aggregated intelligence” in managing portfolios 24:04 How regular people can find real financial advice 25:34 The key to success: Temperament, not timing 26:44 Weston’s side gig as a roving birthday singer 27:58 Why Weston hasn’t been invited lately (and he's lonely) Next, Paul highlights a recent article by another Truth Teller, Ben Carlson. In “60/40 Portfolio Corrections, Bear Markets and Recoveries,” [https://awealthofcommonsense.com/2025/05/60-40-portfolio-corrections-bear-markets-and-recoveries/] Ben breaks down the differences in returns during bear markets and the bounce-back that follows. Inspired by this, Paul explores a question that doesn’t get much attention: What’s the impact on a portfolio when you apply a 4% fixed withdrawal rate to the nine Sound Investing equity portfolios, each with a 60/40 equity-to-fixed income split? The results may surprise you! Paul notes there’s more to come on this topic, as these findings could have a real impact on how investors choose their retirement portfolios. As promised, here are the links to the Sound Investing Portfolios: 50% U.S. / 50% International [https://irp.cdn-website.com/6b78c197/files/uploaded/Sound_Investing_Portfolio_Returns_%281970-2023%2950-50.pdf] 70% U.S. / 30% International [https://irp.cdn-website.com/6b78c197/files/uploaded/%28H%29_Sound_Investing_Portfolios_Performance_%2870-30%29_-_2024_Returns.pdf]

Being a do-it-yourself investor can be both rewarding and challenging. In this episode, we explore the essential mindset and strategies needed to succeed in the long term. Drawing from academic research, historical data, and decades of experience, this episode covers: 1. Why short-term returns are often just noise and how to focus on the bigger picture. 2. The importance of a 20-30 year horizon for small-cap value investments. 3. How to avoid emotional decision-making and set realistic expectations. 4. Insights into the performance of small-cap value vs. the S&P 500 over 25+ years. 5. The role of faith, patience, and discipline in building a successful investment portfolio. Paul also provides a step-by-step guide to help investors analyze the numbers referenced in this episode. Follow these steps to compare small-cap value funds and the S&P 500: Steps to Analyze Performance on Morningstar: 1. Open morningstar.com [https://www.morningstar.com/]. 2. Enter DFFVX in the search box at the top of the page. 3. Open the Chart option located next to the Quote. 4. Select MAX next to the Start Date to view the full performance history. 5. One by one, enter the following ticker symbols into the Fund Chart Compare search box and hit return after each: This process allows you to visualize and compare the performance of these funds over time and gain a deeper understanding of the data discussed in this podcast. Whether you're 25 or 81, this episode is packed with actionable insights and encouragement to help you stay the course and achieve your financial goals.  Listen now for expert advice and a fresh perspective on long-term investing! Links that Paul uses in this podcast- Bootcamp #1 - Biggest Decision of All: Stocks vs. Bonds [https://www.youtube.com/watch?v=WAl46d0uinQ] Avantis Quilt Chart [https://irp.cdn-website.com/6b78c197/files/uploaded/Avantis_-_Index_Dispersion_Quilts_-_2009-2024_%28Branded%29.pdf]

"Buy and hold investors don’t just win on average returns— they win by avoiding the behavioral landmines that sabotage long-term success.” Paul Merriman In this podcast Paul addresses one of the most important investment decisions a do it yourself investor will make. Paul opens the discussion with comments from a Forbes article [https://www.forbes.com/2008/04/30/warren-buffett-profile-invest-oped-cx_hs_0430buffett.html] from 2008 that discusses Warren Buffett’s market timing decision he made to get totally out of the market in 1969 and back aboard in 1974. The podcast (with the help of Chatgpt, includes a list of 10 common reasons market timing doesn’t work for amateur investors. 1. Missing the best days 2. Emotional decision-making 3. Perfect timing is impossible 4. Higher costs and taxes 5. Volatility is high during recovery 6. Recency Bias 7. Focus on noise, not timing signals 8. Overconfidence 9. Loss of Compound Growth 10. Data shows long-term investing wins Paul challenges AI that there are many emotional disadvantages with timing. The most important performance and non performance hurdles: 1. Decision-making: Timing requires lots of work and buy and hold almost none. 2. Mistakes: Market timing suffers lots of mistakes and buy & hold rarely wrong in the long term. 3. Emotional Toll: Timing has lots of emotional challenges and buy & hold is more peaceful.  4. Behavioral Risks: Timing has lots of behavioral risks and buy & hold is simple. 5. Time Commitment: Timing takes time and action and buy & hold is rarely touched. 6. Expenses: Costs and taxes are both lower with buy & hold. 7. Timers must be more resilient with many decisions being wrong. 8. Financial Results: A few timers may perform well but all buy & holders are likely to have “won”.

Watch Video here [https://youtu.be/D9EzXvDiofM] April is Financial Literacy Month, and to help us celebrate we brought in a returning guest, Paul Merriman. Paul has been on the show before to discuss investment portfolios, but today he talks with us about some extraordinary strides he's making as a financial literacy advocate through his nonprofit, The Merriman Financial Education Foundation. We also share some of our favorite financial literacy resources. RESOURCES MENTIONED ON THE SHOW🌐 Visit Catching Up to FI website https://catchinguptofi.comPaul's Website https://www.paulmerriman.comMerriman Financial Literacy Program at Western Washington University https://financialliteracy.wwu.eduIGrad https://www.igrad.com/Next Gen Personal Finance https://www.ngpf.orgWhite Coat Investor https://www.whitecoatinvestor.comThe John C. Bogle Center for Financial Literacyhttps://boglecenter.net TIMESTAMPS / CHAPTERS 00:00 📣 Introduction and Financial Literacy Impact 01:09 👋 Welcome and Guest Introduction 01:35 🤝 Paul Merriman's Nonprofit and Financial Literacy Story 02:33 💡 The Importance of Financial Literacy 06:59 🏫 Nonprofit Initiatives and University Programs 16:15 🏋️‍♀️ Bootcamp and Investment Decisions 18:07 🌐 Other Financial Literacy Organizations 22:09 🏛 State-Level Financial Literacy Education 25:55 ✨ Final Thoughts and Encouragement 31:27 🙏 Conclusion and Farewell

Watch video here [https://youtu.be/6Wtg95gZs1E] This updated discussion of the Ultimate Buy and Hold Portfolio highlights the advantages of equity asset allocation and worldwide diversification. The presentation was presented to members of the Washington State Society of CPAs. At the end of the presentation Paul adds his list of 15 million dollar decisions that all investors will make in their lifetime.