The Index Edge: Paul Merriman’s Investment Insights
In this insightful conversation, renowned financial expert Paul Merriman shares his wealth of knowledge and experience in investing. He discusses his journey from stockbroker to founding his own investment advisory firm, and eventually establishing the Merriman Financial Education Foundation. Paul delves into various topics, including:
✅ The importance of data-driven investing and understanding the math behind it✅ His meeting with John Bogle and their differing philosophies on investing✅ The case for small cap value investing and its historical performance✅ The challenges of market timing and the benefits of portfolio diversification✅ The emergence of ETFs and trend following strategies
PaulMerriman.com
Tables, Graphs and ChartsBoot CampS&P 500 vs Small Cap ValueQuilt Charts Equity Index Returns Free Copy- We’re Talking MillionsFree Copy- 2 Funds for LifeBest in Class ETF Update 2024
ETFAtlas.com – A new portal offering a comprehensive catalog of ETFs from the United States, Canada, and Europe.
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1:15:50
Introduction to Boot Camp
The podcast starts with a brief history of the growth of the Merriman Financial Literacy Foundation. From it’s small beginning in December 2012, it has produced over 1000 videos, articles and podcasts, published 6 books, spoken at many national conferences, underwritten a university class on investing for non finance majors at Western Washington University, produced portfolios for do it yourself investors, produced recommended mutual funds and ETFs to build the portfolios. Most recently there is a new effort to give every Western student a meaningful exposure to personal finance. This is being done under the Merriman Financial Literacy Program at Western.
Two years ago we introduced the Merriman Boot Camp. The purpose of the project is to help investors make the best financial decisions. In the podcast Paul discusses 14 of those decisions and how we are enlarging our educational efforts. He also notes that the Boot Camp pages will also contain a new Q&A section on each topic as well as additional information from our list of Truth Tellers.
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36:18
Why should small cap value make higher returns?
In this first Q&A podcast of 2025, Paul, Daryl, and Chris discuss several listener questions and expand on Paul's rebuttal of Big ERN's recent criticisms of diversifying with small-cap value.
0:00 – Introduction
0:29 – Responding to Big ERN's critique
2:11 – Small-cap value lumpsum vs. dollar-cost averaging
6:38 – Daryl's take on SCV's premium persistence
8:46 – Chris' take on SCV's premium persistence
15:50 – Paul highlights the random timing of SCV vs. S&P500 returns
19:50 -- Are there good alternatives to Vanguard's Wellesley fund?
26:18 -- Does 2 Funds for Life mean no SCV in retirement?
29:35 -- Why not let Buffet manage our money in BRK.B?
33:52 -- What portfolio to get a 3.6% safe withdrawal rate in retirement?
38:53 -- Which accounts do we tap for our annual spending needs?
49:39 -- Why doesn't the Portfolio Configurator include REITs and emerging markets?
54:52 -- When will the Best-in-Class ETF recommendations be updated?
These tables were referenced-
Table G-1b - Fine Tuning Table: S&P 500 vs US SCV Equity Portfolio - Out-Performance
Tell-Tale_Charts
2 Funds for Life PDF
2 Funds for Life on Amazon
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56:23
The True Story About Small Cap Value
There has been a lot of anti small cap value articles and podcasts over the last several years. I have been asked many times whether I think the small cap value premium is a thing of the past.In this podcast I have addressed the most commonly discussed criticisms of small cap value. During the presentation I reference a blog entitled, "Small-Cap Value Stocks: Diversification or Di-WORSE-fication?"
The Early Retirement Now newsletter is written by Karsten Jeske, PhD, CFA. Here is a video of a friendly debate that Karsten and I had on the “Forget About Money” podcast. Listeners will learn that Karsten and I have very different beliefs about what returns best represent the small cap value premium. I reference the real time Morningstar performance results of DFFVX (2000 to present), DFSVX (1993 to present) and AVUV (2019 to present).
During my discussion I reference Table G-1b, Fine Tuning Table: S&P 500 vs. US SCV Equity Porfolio - Out-Performance and Table H2a - Sound Investing Portfolios: Comparison Data
I also referenced a Q&A response on Truth Teller Rob Berger regarding his personal take on small cap value in his own portfolio.
I also mention the interview with Jim Dahle at the 2024 Bogleheads Conference. https://www.youtube.com/watch?v=8C3KhRJCwCQ
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45:01
Paul Merriman speaks with Robert Pass on Pediheart: Pediatric Cardiology Today Podcast - "When it comes to retirement, how much is enough?"
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"
Ireland