"Investor performance is determined principally by two things – the quality of advice they receive,

and their willingness to follow it." George Sisti

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AAII & Bogleheads Presentations
Latest MarketWatch Article
Website News
Latest Podcast
Chris Pedersen's Q&A
Testimonials

Dear Friends,

Okay, I made it to 80. The good news, according to Death Clock (https://www.death-clock.org/), is I am likely to live another 9 years, 9 months and 9 days. To many 9s to be believable but I’ll take it!

This newsletter will be brief as we are waiting to find out when the NYC AAII Chapter and Bogleheads presentations will be archived and available to the public.

Chris and I were thrilled by the signups and turnout for the AAII presentation. Over 1900 investors signed up and 661 showed up. We each had 45 minutes and a joint Q&A session. We will have many unanswered questions that we will address in future podcasts.

It was an honor to attend and speak at the Bogleheads Conference in Rockville, MD. There were 500 guests in attendance. I had many conversations with people who are following our work. I wish Chris and Daryl had been there to hear the accolades about their educational efforts.

I was given 20 minutes to address the same topic I spent 45 on for AAII. I made the decision to cut out 12 of the slides from the AAII presentation and address the remaining 12 tables and graphs. That was a mistake. For those that already own small cap value it was probably okay but for those I hoped would consider adding a bit of small cap value to their portfolios, I think I failed.

In this weeks podcast I make the case for small cap value using one single table. This is what I should have done for the Bogleheads. If you are considering adding small cap value to your portfolio, I hope you will listen to this podcast.

Beyond the S&P 500: How to supercharge your diversification

You know you should diversify, so you don’t have all your eggs in one basket. But it’s easy to think you’re getting a lot more diversification than you really are.

In this article, I’ll show you how to use smart diversification to boost your likely long-term results while you reduce your volatility at the same time. Never fear: This doesn’t take a lot of work.

Why diversify at all?

Any single asset, whether it’s a stock or a fund, inevitably has its ups and downs. The “ups” make us feel smart, successful, lucky; but the “downs” can make us feel confused, unlucky, and perhaps even failures.

It helps a lot to own something that’s gaining to offset something else that’s losing.

Website News

Thank you for your patience as we move Paulmerriman.com to a new platform. The new platform will help us reach and teach more investors.

Latest Podcast

How I failed the Bogleheads

I went to the Bogleheads Conference with high hopes I would convince guests that small cap value should be at least a small part of every equity portfolio. Many respond that they have all the small cap value they need in a total market index like VTI.

Why I failed: I only had 20 minutes, as compared to 45 a couple of days earlier for the NYC AAII Chapter. I took a dozen slides out of the shorter presentation but still had at least another dozen tables and graphs to address in the 20 minutes. What I should have done is spend the 20 minutes on one table. That table is B14B In this podcast I make the presentation I wish I made at the conference.

If you have a friend you think could use the information, please pass it on.

Chris Pedersen's Q&A

Questions: 1. How do I plan a two funds for life portfolio when I want to provide for a wife who is 15 years younger than me?

At the moment I'm thinking of a TDF that splits our retirement years in half. That is, instead of choosing, say, the 2035 TDF I chose the 2045 TDF and/or maybe goosed up my SCV a wee bit. Both are riskier but maybe that's the best way to accommodate asset needs to ensure my wife a safe retirement.

2. How can you and Mr. Merriman recommend more expensive (and actively managed) funds as part of your "Best in Class" funds?

You may have explained this somewhere in your books or online but I can't find it thus far or forgot where it is. For years I've read Mr. Merriman talk about how much expenses matter, yet not all of your recommendations are "low" cost.

For instance, the best in class for a taxable portfolio among value fund recommendations includes an actively managed fund and I think it has an expense ratio of .36, considerably higher than the .025 for the Fidelity small cap value index fund. I was thinking of investing only in the latter until I saw your recs.

Is there a place I can find any Merriman/Pederson explanation for what justifies the higher expense ratio?

Thank you for all you do and for considering a response to my questions.

Best,
Mike

Answer: Hi Mike,

A1: I like the way you're thinking about adapting the 2 Funds for Life approach for a couple with different retirement horizons. Picking a date midway between the two retirement dates makes sense. Whether you do this or manage two separate portfolios with different dates, the result will be similar. It all adds up to a portfolio that is between the two extremes.

A2: All of the funds we recommend are managed systematically with little room for judgement on the part of fund managers. Some are classified as active because they don't follow a published index, but I feel that label misrepresents how they are managed. The reason we sometimes choose funds with higher expense ratios is that the have higher expected returns based on their historical exposure to market factors. You can learn more about this in the various articles and presentations I've made regarding my best-in-class fund selection process.

Thanks,
Chris

Testimonials from Bogleheads Conference

This past weekend was a first for me like you as I attended the Bogleheads Conference in Rockville, Maryland.

My primary reason for attending was to see you in person and hear further details of your views on investment portfolios including Small Cap Value. Personally, I have added Small Cap Value to my portfolio after viewing many of your You Tube and staff’s videos, with charts explaining its benefits. Your team of Chris, and Daryl have provided excellent research and data proving its viability as an asset class to own.

Thank you for all of yours and your team’s work.

FELLOW BOGLEHEADS ATTENDEE

Beyond the S&P 500: How to supercharge your diversification

How I failed to Bogleheads

The Lifelong Process of Financial Education with Paul Merriman

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In This Edition AAII & Bogleheads PresentationsLatest MarketWatch ArticleWebsite NewsLatest PodcastChris Pedersen's Q&ATestimonials

In This Edition

AAII & Bogleheads Presentations
Latest MarketWatch Article
Website News
Latest Podcast
Chris Pedersen's Q&A
Testimonials

AAII and Bogleheads presentations