Sound Investing

In this interview from the 2026 Bainbridge Community Foundation Annual Financial Education Series, Paul sits down with Bill Bernstein — neurologist, financial historian, and author of The Four Pillars of Investing and If You Can — for a wide-ranging conversation drawn from 50-plus years of investing experience.
Bill explains why you're only rewarded for taking risk in well-regulated markets (and why crypto doesn't qualify), how today's market echoes the late 1990s, why the "reverse glide path" makes sense the older you get, and what the Bessembinder research really tells us about the cost of trying to pick winners. Paul and Bill also debate withdrawal strategies, the case against long bonds, and whether tilted small-value investing still works once "the bozos know about it."
A masterclass in evidence-based investing from one of the most respected voices in the field.
CHAPTERS
00:00 Intro from Matt Longmire, Bainbridge Community Foundation
02:50 Welcoming Bill Bernstein
03:50 Why The Four Pillars of Investing belongs on every DIY investor's shelf
05:50 Risk vs. reward — and why Bitcoin doesn't qualify
08:30 How many asset classes do you really need?
11:50 Where today's market resembles the late 1990s
13:40 Are REITs still worth holding?
15:50 The case for automating everything
19:45 Why retirees need to fear sequence-of-returns risk
21:30 Paul's 5% rule vs. the 4% rule
25:30 The two-bucket theory and the reverse glide path
27:30 Prediction markets, gambling, and "being the house"
32:00 The sociological signs of a bubble
35:00 Speculation vs. gambling — gold's real return
40:00 The Bessembinder study: why 4% of stocks make most of the returns
46:00 Why rich people plan three generations ahead
49:00 Audience Q&A
58:30 Tilted index funds (DFA, Avantis) — worth it?
01:03:50 The future of Social Security
01:07:00 Closing thoughts and book recommendations
LINKS:
The Four Pillars of Investing — Bill Bernstein (2nd ed., 2023)
If You Can — Free PDF from Bill Bernstein
The Bessembinder Study — "Do Stocks Outperform Treasury Bills?"
Bainbridge Community Foundation
Ben Carlson's New Book on Risk and Reward

Chris and Paul explain what target-date funds are and do, and how to augment them with some small-cap value to get the broad diversification benefits of the other Sound Investing portfolios.
They describe several approaches and tools investors can use to determine what might be best for them.

CHAPTERS
00:00 Intro
03:03 Target-Date Funds
07:00 Glide Paths
15:17 TDF Backtesting
19:55 TDF Weaknesses
26:20 "Easy" 2FFL
34:46 "Moderate" 2FFL
37:48 "Aggressive" 2FFL
41:00 Customizer
52:15 Calculator
61:07 Books
66:00 Outro
LINKS:
Wharton: Target Date Funds & Portfolio Choice in 401(k) Plans
Morningstar: “2026 Target-Date Fund Landscape”
Chris' Tables of 2 Funds for Life and Target Date Funds (PDF)

Paul sits down with Chris Pedersen and Daryl Bahls for the first Q&A session in months — and this one is built around the questions readers and listeners ask most often. Chris and Daryl share what they're working on next (Best-in-Class ETF updates, Target Date Fund work, telltale charts, risk-adjusted return analysis), Paul talks about a smarter way to use AI for the questions outside our wheelhouse, and the team works through six reader questions about portfolio design — from combining model portfolios to choosing between fund families.
If you've ever wondered whether your portfolio is "right," this conversation will help you think about it the way Chris and Daryl do.
8:30 — Should I combine the Worldwide Four Fund, U.S. Four Fund, and Worldwide All Value with a small cap value tilt?
16:00 — How do I read the Sound Investing tables to compare portfolios?
30:30 — Worldwide All Small Cap Value vs. the U.S. Two Fund — which is better?
38:15 — My Vanguard Four Fund uses VOO, VTV, VB, and VBR — am I using the right ETFs?
41:30 — How do Vanguard, Fidelity, Schwab, DFA, and Avantis compare on size and value exposure?
46:30 — How do I get help with Merriman portfolios when I need it?
Table B2 Table H2 Fine Tuning Tables Portfolio Configurator
You'll get the full answers, the data behind them, and Chris and Daryl's reasoning by watching or listening.
Watch the video here- https://youtu.be/BdTNOkALpuQ

Paul and Chris introduce the new Avantis and DFA Best-in-Class fund family recommendations and talk about the shift away from evaluating and recommending à la carte choices from multiple fund providers. 
They emphasize that the quality and breadth of the offerings from Avantis and DFAhave reached a point where it's better and more sustainable to recommend these fund families than to continually change recommendations among funds that are increasingly close unexpected performance.

Best in Class ETF recommendations https://www.paulmerriman.com/best-in-class-recommendations

Portfolio Configurator https://lookerstudio.google.com/u/0/reporting/a941a5d4-0929-45ea-b22e-3bb82dc334ff/page/99wxc?s=hqmha3-AK5k

This special two-part session opens with Paul Merriman solo — paying tribute to Tim Ranzetta of Next Generation Personal Finance, sharing the latest numbers on state-mandated financial literacy, and walking through Daryl Bahls' quilt charts to show annual earnings invested in the S&P 500, large-cap value, small-cap blend, and small-cap value since 1928.Then Paul sits down with Christine Benz — Morningstar's Director of Personal Finance and Retirement Planning, and author of How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement — for a wide-ranging conversation on how to actually make a retirement portfolio last.Christine lays out her five-step plan for anyone retiring in 2030 or 2035: turbocharge savings, rethink household spending, build seven to ten years of "safer assets" for portfolio withdrawals, diversify globally, and use TIPS to protect purchasing power. She and Paul dig into how to structure fixed income (short, intermediate, TIPS), why she's cooler on REITs than she used to be, when a simple income annuity makes sense, and why alternatives rarely earn their keep.They also cover performance-chasing the S&P 500, balanced funds vs. building your own portfolio (including Paul's Wellesley/Wellington pairing for hands-off investors), how AI is starting to change the financial advice landscape, and the honest answer to "have you planned out to the day you die?" — even from a Morningstar executive.The audience Q&A covers bonds vs. T-bills, down-payment savings, the four-fund portfolio, Vanguard asset allocation for retirees, tax-efficient withdrawal sequencing, TIAA annuities, managed futures, and gold.Part of the Spring Financial Education Series hosted by the Bainbridge Community Foundation in partnership with the Merriman Financial Education Foundation.Coming up in this series: Mike Piper (April 21) and Bill Bernstein (April 28).🔗 LINKS & RESOURCES:📖 How to Retire — Christine Benz🎙️ The Long View Podcast🌐 https://www.morningstar.com/people/christine-benz📘 https://www.ngpf.org🌐 https://paulmerriman.comTIMESTAMPS:📚 PART 1 — Paul Merriman Solo0:00–Welcome from Matt Longmire2:55–Paul Merriman intro3:50–Tim Ranzetta & NGPF7:00–Financial literacy stats9:30–Why NGPF is free10:30–Ben Carlson & oil shocks13:50–Risk and Reward preview14:40–Quilt charts explained17:00–$100 since 192820:00–Quintile rankings22:30–Four-fund consistency24:00–Volatility discussion25:30–Best/worst decades🎙️ PART 2 — Christine Benz Interview27:00–Christine joins29:00–Retirement mindset31:00–Planning for 2030/203532:30–Boosting savings33:30–Lifestyle adjustments35:00–7–10 years safer assets38:00–Bond strategy40:00–Risk tiers (cash → bonds)42:00–Equity allocation44:30–TIPS importance48:00–Buy-and-hold vs timing50:00–Handling macro fears52:30–Top risks54:00–Annuities overview56:00–SPIAs & DIAs58:30–Income psychology1:02:00–More resources1:04:00–Alternatives critique1:07:30–401(k) concerns1:10:00–Investor gap1:12:00–Christine’s planQ&A:1:15:00–Bonds vs T-bills1:20:00–$95k down payment1:22:00–Four-fund portfolios1:25:00–FXAIX vs VOO1:26:00–Model portfolios1:29:00–Balanced funds1:33:00–Tax-managed funds1:34:00–Active vs passive1:39:00–Bond ETFs1:41:00–TIAA annuities1:42:30–Withdrawal strategy1:44:00–AI investing1:46:00–Future of advice1:50:00–Gold & alternatives1:52:00–Closing thoughts1:53:00–Next episode

Watch video here