“Diversifying portfolios is a tacit admission that we don’t have a crystal ball. You reduce the range of outcomes by preparing for what you can’t see coming.”

— Dimensional Funds

In This Edition

›Three New Truth Tellers: Vanguard, Dimensional & Avantis

›This Week’s Podcast: Paul and Chris Follow Up the Rick Ferri Small-Cap Value Debate

›Worth Reading: The $100 Million Lesson

›Testimonials

From Paul

Three New Truth Tellers

We are adding three organizations to our list of Truth Tellers: Vanguard, Dimensional Fund Advisors and Avantis Investors.

Why would we include investment companies on a list devoted to sources investors can trust? Because each has contributed far more than investment products. They have helped investors understand how markets work, why costs matter, why diversification matters, and how evidence can be turned into a sensible investment strategy.

Vanguard deserves a special place in that history. It launched the first retail index fund in 1976 and has spent decades making the case for broad diversification, low costs, simplicity and long-term discipline. Its investor education library covers investing basics, retirement, IRAs, emergency savings and many other subjects.

Dimensional approaches investing from a somewhat different direction. Since 1981, it has worked to translate academic financial research into practical portfolios. Its educational materials explain the research, methodology and portfolio-construction principles behind its strategies.

Avantis is much younger, but its philosophy also combines financial science, broad diversification, low costs and systematic implementation. Its growing Insights Library and Monthly Field Guide provide articles, videos, market history, academic perspectives and discussions of investor behavior.

Truth Tellers Don’t Have to Agree

This may be the most important reason to follow all three.

Vanguard can make an extraordinarily powerful case for traditional market-cap-weighted indexing: own the market, keep costs extremely low, keep the portfolio simple and stay the course.

Dimensional and Avantis make a different argument: financial research suggests that certain characteristics of companies are associated with higher expected returns, and portfolios can systematically emphasize those characteristics while remaining broadly diversified.

Who is right? We don’t know what the next 50 years will bring. That’s precisely why we want you to hear thoughtful arguments from more than one source.

Calling these organizations Truth Tellers does not mean we believe everything they say will turn out to be right. Nor does it mean they are disinterested observers. All three sell investment products and benefit financially when investors use them. That should always be understood when evaluating their conclusions.

But we believe they have earned your attention because they explain their reasoning, provide evidence, educate investors and give us ideas that can be challenged and compared.

So our recommendation is simple: don’t just consider their funds. Take advantage of their education. Read Vanguard’s case for indexing and low costs. Read Dimensional’s research. Follow Avantis’ educational materials. Compare their conclusions. Then compare all three with the other Truth Tellers we recommend.

The purpose of the Truth Tellers list has never been to tell you whom to obey. It is to help you find people and organizations worth listening to — and then give you the confidence and knowledge to make your own decisions.

The best Truth Tellers don’t simply tell us what to think. They help us learn how to think.

Explore Vanguard’s Investor Education

Explore Dimensional’s Research & Insights

Explore Avantis’ Insights Library

This Week’s Podcast

Paul and Chris Follow Up the Rick Ferri Small-Cap Value Debate

After my conversation with Rick Ferri about total-market indexing versus factor-tilted portfolios, Chris Pedersen and I sat down to dig deeper into the question so many of you wrote in about: is the extra step toward small-cap value worth taking?

Chris brings the research and the numbers, and together we work through what the evidence actually shows, where reasonable people can disagree, and how to think about the decision for your own portfolio. If you enjoyed the debate with Rick, this follow-up is the conversation that puts it all in context.

You can listen to the podcast or watch the video below.

▶ Listen Now

▶ Watch on YouTube

Worth Reading

The $100 Million Lesson

I don’t spend much time on cryptocurrency, but a recent article in Advisor Perspectives caught my attention because it makes a point that applies to every investor, not just the crypto crowd.

The article describes how a single flaw in one company’s security let thieves drain more than $100 million from people who thought they’d done everything right. These were careful owners who stored their digital keys offline, exactly as they’d been told to — and it still wasn’t enough. The piece goes on to catalog the ways this can go wrong: forgotten passwords, phishing scams, even a hard drive holding half a billion dollars in Bitcoin lost forever in a landfill.

The lesson I take from it isn’t really about Bitcoin. It’s that complexity carries its own risks — risks that often don’t show up until it’s too late. When an investment requires you to become your own security expert, you’ve taken on a job most people aren’t equipped to do. As the author notes, for ordinary investors who want exposure without the peril, a mainstream Bitcoin ETF offers essentially the same price movement with far fewer ways to lose everything.

That’s the same reasoning behind everything I teach: keep it simple, keep it low-cost, and don’t take on risks you don’t understand and can’t control.

Read the Article

Testimonials

“Great podcast debate! You and Rick are a great combination, the best I’ve heard, and I listen to them all. I hope you and Rick do more. Thank you!”

— JF

▶ Watch the Debate

Thanks for listening, for sharing this information with others, and for your generous donations. And please keep getting the free We’re Talking Millions link into the hands of people who might be helped.

All the best to you and your family,
Paul Merriman

From Paul Merriman

Resources & Ways to Connect

Free Book Download

Get Paul's latest book — completely free. Thousands of investors have used it to build a better financial future.

📚 Download Free Book

Latest Podcast

Sound Investing — practical, no-nonsense financial wisdom you can act on today.

🎙️ Listen Now

YouTube Channel

Hundreds of videos on investing, retirement planning, and building long-term wealth.

▶️ Watch on YouTube

Follow on TikTok

Short, powerful investing tips delivered daily. Share with the next generation of investors.

🎵 Follow on TikTok

Support the Foundation

Your donation helps us continue providing free financial education to investors everywhere. Every dollar makes a difference.

❤️ Make a Donation

Three New Truth Tellers — and Why They Don't Always Agree