"Diversification is hard because you just know there is always going to be something in your portfolio that’s going to underperform. You just don’t know what that asset class or strategy it will be at any given time." Ben Carlson

In This Edition
Winning the Battle Against Investment Fees and Biases
Truth Teller Corner
AAII Houston Chapter- Chris Pedersen
Latest Podcast
Testimonial

It is an honor to be a contributing editor for the AAII Journal. While Marketwatch wants articles of approximately 1000 word the AAII Journal allows up to 3000 words.

Winning the Battle Against Investment Fees and Biases would be a good article to share with first time investors. Here is what one of the article readers had to say about the article.

Juice up your S&P 500 fund for higher returns

"Bless you, Paul Merriman! "The solution is simple (though not always emotionally easy): Buy and hold, trusting the long-term upward trend of the market." You don't know how long I've waited to read that line in the AAII Journal! If only we could get young people to read, understand, and FOLLOW your teachings in this article, their lives would be greatly improved!”

I hope you will pass it along.

Demystifying Diversification — Asset Class & Portfolio Essentials with Chris Pedersen

May 18, 2024 10:30 am- noon (Central Time)

“I just reviewed Chris’ slides for his Houston AAII presentation. I think it is his finest work. I’ll be there. I hope you will be there too!"

Chris will show us how a study of different investments’ (asset classes) long-term past performance and diversification can help us achieve our financial goals. Three things you will learn from this presentation are:

Past performance does not guarantee future returns, but it provides valuable insights for setting expectations.

Asset allocation is key to managing volatility and achieving financial goals. By combining different investments, we can create a path tailored to individual risk tolerance.

Understanding historical performance across asset classes allows us to construct well-balanced portfolios for a successful financial journey.

Chris Pedersen is Director of Research at The Merriman Financial Education Foundation and creator of the 2 Funds for Life investing approach to augmenting target-date funds. He is an engineer by training, and a new opportunity finder by nature. In his work for the foundation, he develops and maintains a set of best-in-class exchange-traded fund (ETF) recommendations, the customizable Merriman Aggressive Target Date glidepath calculator and regularly contributes to articles and podcasts. Like the rest of the Merriman Foundation staff, his work is motivated by a genuine desire to learn and help, free of any financial incentives or conflicts of interest.

Registration: This meeting will be online only. Registration information will be available in the first week of May.

Truth Teller Corner- Ben Carlson

For those of you concerned about the future of Social Security I think you will appreciate Ben Carlson’s new article on, “Is Social Security Going Bankrupt” https://awealthofcommonsense.com/2024/05/is-social-security-going-bankrupt/

I suspect many of you will find the podcast on the topic very interesting as they cover a range of topics I know you will find interesting.

And here is another Carlson article on the topic, “Can Young People Still Count on Social Security"

Latest Podcast/Video- Best in class ETF Q&A

Paul and Chris cover several questions about the Best-in-Class ETF recommendations and selection process.

1. What's the overarching objective of the Best-in-Class ETF recommendations?
2. What's the 6-step process described in your ⁠AAII Best-in-Class ETF Article⁠?
3. Why is it sometimes worth paying another tenth of a percent or more for funds with more exposure to small or value?
4. Is AVUV's recent 6%/year return advantage over VBR expected and/or likely to continue?

5.What did Avantis say are the market conditions that favor or disadvantage their approach?

6.How should investors think of the risks of tilting away from the cap-weighted market indexes towards small and value?
7. Retail investors have a potential superpower versus institutional fund managers -- patience!
8. How many hours does it take Chris to update the Best-in-Class ETF recommendations?
9. JL Collins is a big proponent of the total market index. How much is our Best-in-Class ETF recommendation for large-cap blend (AVUS) likely to outperform a total-market index fund such as VTI?
10. What happens when small-cap value becomes super popular?

Links: Best-in-Class ETF Bootcamp ⁠video⁠ and ⁠podcast⁠

AAII article on ⁠Choosing Best-in-Class ETFs⁠⁠ Portfolio configurator⁠

Portfolio visualizer ⁠factor statistics⁠, ⁠factor regression tool⁠, and ⁠fund factor regressions⁠.

⁠Watch video here

Testimonial

"There is a Certified Financial Planner who is an owner of a local wealth management firm. He wanted our church to move our pastor 403b funds to his company and pay him about half a percent to manage it. I let him run a full analysis. I used the US 4 Fund from your website through Vanguard. He called me to tell me that they have never run an analysis on a better portfolio. They went on and on about how I am beating the "efficient frontier." He recommended I keep doing what I am doing. Thank you for all the educational resources.”

Best in class ETF Q&A

Call To Action!

Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and communities, creating more opportunities for all.

Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think!
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In This EditionWinning the Battle Against Investment Fees and BiasesTruth Teller CornerAAII Houston Chapter- Chris PedersenLatest PodcastTestimonial

In This Edition
Winning the Battle Against Investment Fees and Biases
Truth Teller Corner
AAII Houston Chapter- Chris Pedersen
Latest Podcast
Testimonial

The Case for International Stocks