Sound Investing

The following are Dr. Pass’ note to his podcast:  "This week to conclude 2024 we speak with noted investment expert Mr. Paul Merriman to discuss a few topics related to personal finance and investing. First we tackle the notion of having 'enough' to retire. Is there a magic value and how would one think about this? Why is an S&P 500 Index or Total US Stock Market Index a fine 'core' investment and how might one possibly improve upon its performance? What are some of the psychological hurdles we have as investors and potential retirees? Mr. Merriman reviews these and other topics on our end of year episode.” Paul Merriman's Website Paul's "Quilt" Chart  Paul's "Bootcamp" page Last Year's episode of Pediheart was replayed on Mr. Merriman's site Paul's book "We're Talking Millions"

On December 26, 2019 Paul recorded a podcast entitled, “Could This Be the  #1 Reason to Invest in Index Funds?”   We were shocked to learn that over 1,000,000 investors opened the podcast.  In this podcast he addresses the topic again in “Could This Be the #1 Reason to Invest in Index Funds? Part 2” The podcast reviews the well established index advantages and adds one that may be the biggest reason an investor is able to find comfort staying the course in an index fund for the rest of their life. This might be a good podcast to share with your young adult children.

Paul, Daryl, and Chris discuss the risks of investing and life. Paul starts with an introduction and admission of his challenges managing risks related to diet and health.  He then gets Chris and Daryl to chime in with their definitions and perspectives on risk.  Daryl then shares a framework for evaluating risk from his days as a systems engineer.  The framework looks at risks in two dimensions: likelihood and impact (or severity).  He describes how the framework can help prioritize which risks to mitigate and gives examples of how some financial risks might be reduced in both dimensions.  Chris is reminded of the book "Die with Zero," and mentions how risks extend beyond finances to experiences. Paul, Chris, and Daryl then discuss some of their challenges in managing the risks of their own portfolio allocations and how their behaviors differ from what might be considered ideal. This leads to discussing the dangers of learning the wrong lessons with examples from inside and outside the personal finance world. Paul reads from the Jonathan Clements article that inspired this podcast: "The Risks We Miss."  Paul then closes out the podcast. Outtakes include Paul and Chris discussing how the Best-in-Class ETFs can help mitigate risk, and what Daryl wants for Christmas. Watch video here- https://youtu.be/veXXh-YVYKU

While I was at the Bogleheads conference in Minneapolis earlier this year, I had a lengthy interview with Paula Pant.  I enjoyed the interview and found lots of questions and comments under the YouTube presentation that I wanted to answer.  While I wrote short comments on the site, I decided many of the questions were worthy of more discussion.Here is a link to the YouTube interview and podcast: #1.  “Most of my holdings are in cash as I cashed out last time the market went down.  How do I stay invested and think long-term to help me ride out the ups and downs of the market?”  02:17 #2.  “I’m just beginning my investment journey and planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns.”   https://rethinking65.com/the-preference-for-dividend-paying-stocks-is-irrational/ 10:41  #3. "What Fidelity Funds do you recommend to build your 4 Fund Portfolio?"   15:00 #4.  "How often do you recommend rebalancing the 4 Fund Portfolio?" 17:02 #5  "Nobody knows what’s going to happen next so we should practice some humility and CHOOSE a strategy with a long-term edge."  What is the edge and what else do you need to know dividend stocks k? 21:02 #6.  "I”m not looking to beat the S&P 500…I’m more than happy with the returns I get from it.”  Does that mean it’s right for you? 24:36 #7.  In response to Paul's recommendation of the 4 Fund Portfolio this is what one viewer said, “For what it's worth, backtesting shows his proposed fund portfolio does not do better than VTI or VOO.”  Paul responds. 28:32 #8.  "The only small cap value available in my 401k is DFSVX which has an expense ratio of .30%.  Is this expense ratio too high? 32:32 #9. "Can you give ETF recommendations for all of the equity asset classes?"   Here are the Best In Class recommendations. 35:23 #10. "How do you fund a Roth IRA when a child doesn’t have earned income?" #11.  Please recommend more information on how I might adjust my 401k. We're talking millions and 2 funds for life. 36:37 #11 "Would you accomplish similar performance results by setting up a strategy using sector diversification instead of asset class diversification?" 40:01 #12  "I’m helping my 17 year old daughter with her Roth IRA.  What do you think about shooting for an all equity 40/30/30 portfolio of US small cap value/S&P 500/Total International market?” 42:23 #13. “This guy has been pushing small cap value  and underperforming for years.  Sorry, no thanks." 44:25