Sound Investing

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.

Watch the video here [https://www.youtube.com/watch?v=qXUwFBlmLJ4] Join me on Catching Up to Fi l with Rick Ferri to discuss key investing topics like asset allocation and the pros and cons of small-cap value vs. total market funds. TIMESTAMPS / CHAPTERS 00:00 ⛓️ Understanding Bonds and Young Investors 02:31 🌟 Introduction to Financial Literacy Titans 03:12 🎓 Paul Merriman's Financial Education Foundation 04:18 🧠 Rick Ferri and the Bogle Center for Financial Literacy 12:09 ⚖️ The Importance of Asset Allocation 23:11 🌍 Debating International vs. US Stocks 35:12 🗓️ Target Date Retirement Funds: Pros and Cons 45:55 📈 Exploring Small Cap Value Investing 49:34 🧩 Understanding Non-Traditional Index Funds 50:28 🔍 Small Cap Value Performance Analysis 52:56 👨‍👩‍👧‍👦 Generational Wealth and Portfolio Management 53:54 🧬 Diverse Value Factors in Investing 55:55 🚧 Challenges of Small Cap Value Investing 57:33 🧭 The Philosophy of Long-Term Investment Strategies 01:01:11 🧪 Debating the Evidence-Based Investing Approach 01:12:46 🛡️ The Importance of Staying the Course 01:22:05 🎤 Final Thoughts and Recommendations

In the left corner, we have Paul Merriman, the seasoned finance veteran weighing in at 183 pounds. In the right corner, Dr. Karsten Jeske, the scrappy newcomer at 208 pounds. The bell rings, and the small cap value debate begins. This episode features a financial boxing match between two investment heavyweights with dramatically different perspectives. Paul Merriman champions diversification through the efficient frontier, which means adding small cap value to your portfolio. Dr. Karsten Jeska has “thrown cold water” on this approach, favoring simpler strategies like “VTSAX and chill.” The stakes are high — we’re talking potentially millions of dollars in your retirement account over decades. Merriman argues that history shows clear evidence for small cap value’s premium. From 2000 to 2009, small cap value outperformed the S&P 500 in all but one year, compounding at 10 percent while the S&P 500 returned negative 1 percent. He believes this pattern will continue, creating a powerful diversification effect when combined with broader market indexes. Jeske counters that small cap value’s outperformance is mostly “front-loaded” in history, happening before anyone knew about it. Since 2006, small cap value has underperformed. He argues that once an advantage becomes widely known, it disappears in an efficient market. Adding small cap value might even be “di-worsification” — increasing complexity without improving returns. The debate expands beyond small cap value to touch on: * Active vs. passive investing strategies * Market timing vs. buy-and-hold approaches * Simplicity vs. complexity in portfolio construction * The role of faith vs. evidence in investment decisions While both experts disagree about small cap value’s future, they agree on fundamentals: invest early, stay invested for the long term, and understand that no one can predict markets with certainty. What starts as a technical debate evolves into a philosophical discussion about evidence, probability, and the limits of our knowledge — all with millions of retirement dollars hanging in the balance. Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths. (0:00) Debate intro: small cap value vs index funds (4:01) Merriman: small cap value offers premium returns (9:40) Jeske: small cap value underperformed since 2006 (18:20) Historical performance data significance (25:15) Stakes: difference of millions over time (33:08) Diversification vs added volatility debate (41:45) Risk-adjusted returns comparison (49:08) Questioning true diversification benefits (57:40) Value traps and actively managed funds (1:05:08) Technology stocks vs value investments (1:13:45) Data selection bias in studies (1:19:40) Faith vs science in investment decisions (1:29:20) Personal risk tolerance considerations (1:36:08) Closing arguments on investment strategies (1:42:08) Paula declares the debate a draw Watch video here [https://www.youtube.com/watch?v=MRXsxMi2b1c]

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. Before discussing flexible distributions Paul lists the reasons he believes that 99% of successful long term depends on defensive steps. After listing 18 defensive decisions he explains why flexible distributions are better than fixed distributions for those who have over said. The presentation includes 16 distribution tables that can be found in this pdf for the presentation [https://my.duda.co/site/6b78c197/?preview=true&nee=true&showOriginal=true&dm_checkSync=1&dm_try_mode=true]. In each case 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: one using the S&P 500 and the other the U.S. 2 Fund Portfolio (50/50 S&P 500Small Cap Value). Other links noted in the presentation: Sound Investing Portfolios [https://my.duda.co/site/6b78c197/Sound-investing-portfolios-2025?preview=true&nee=true&showOriginal=true&dm_checkSync=1&dm_try_mode=true]