Sound Investing

Latest Episodes:

M1 Finance Updated 2024 Oct 02, 2024

Show notes

Chris & Paul walk through the changes to The Merriman Financial Education Foundation’s relationship with M1 Finance, including affiliate commissions, a new emphasis on accurate messaging, and improved pre-made portfolio shortcuts (M1 calls them Pies).

The new Pies now include all of our Sound Investing equity portfolios, taxable and tax-deferred fixed-income portfolios, and 5-year increments of the Merriman Aggressive Target-Date Glide Path allocations. Chris shows how easy it is to mix them to get the equity and fixed income ratio you want. He also shows how to approximate intermediate years along the target-date glide path. Finally, Paul challenges him to create a mix of several different equity strategies, which he demonstrates.

Following the demonstrations, they briefly discuss how M1 compares to Fidelity’s offering.

They close with a request for listener questions to be used in an upcoming interview with M1 Finance’s founder and CEO, Brian Barnes. If you have any, please email them to chriskpedersen@gmail.com.

M1-Related Disclosures

This podcast and video were recorded on September 12, 2024. All information is subject to change. The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors.

M1 is a technology company offering a range of financial products and services. “M1” refers to M1 Holdings Inc., and its wholly-owned, separate affiliates M1 Finance LLC, M1 Spend LLC, and M1 Digital LLC.

If you choose to transfer your account to another broker-dealer, only the full shares are guaranteed to transfer. Fractional shares may need to be liquidated and transferred as cash.

All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products.

All investing involves risk, including the risk of losing the money you invest. Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.

M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. M1 is not recommending or endorsing this investment by making it available to its customers.

Lessons for Bogleheads Sep 25, 2024

Show notes

In preparation for his presentation at the Bogleheads Conference Paul reread John Bogle’s “The Little Book of Common Sense Investing” He has been recommending the book since 2007 but in 2017 Wiley published the updated and revised edition. There is some terrific new material in the revised edition.
Paul focuses on several topics from the book including Bogel’s statement that index funds are the only “honest” funds. Paul discusses the reasons actively managed funds can’t afford to tell the truth.
Paul also discusses Chapter 2 on Rational Exuberance. In this chapter Bogle discusses the very important topic of investment returns vs. speculative returns. This topic is essential for do it yourself investors to understand as it prepares them for a reality of investing that could help them stay the course during difficult times.
Paul ends by reading Bogle's list of 8 common sense realities that every investor should know. It would probably be smart to reread this short list at least once a year.
At the Bogleheads conference Paul will speak twice: once in an interview with Jim Dahle (The White Coat Investor). The topic is factor investing. We have developed a page of links to all of the tables that are focused on the use of factor funds to build a portfolio. Here is a link to that list of tables, charts and graphs.
In his second opportunity to share he is part of a panel on investing. That will be a free for all and should be fun.
All of the conference presentations are being taped so they will be available in the coming months.

Paul Merriman’s 12 Million Dollar Ideas for Investing Success Sep 17, 2024

Show notes

I had an amazing conversation with David Baughier on the Forget About Money podcast!

We discussed my 12 One-Million Dollar Ideas for building wealth, the power of starting early, and why index funds are a game-changer for long-term investing.

We also covered the importance of diversification, the benefits of small-cap value stocks, and why sticking with a buy-and-hold strategy beats trying to time the market.

Whether you're new to investing or looking to refine your retirement plan, this episode has actionable tips to help you secure your financial future. Give it a listen—you won’t want to miss it!

Watch the video here.

Download the transcript here

New Table, SCV Returns, Hourly Advisor Recommendation Sep 11, 2024

Show notes

Paul starts the podcast with a discussion of his ⁠special presentation⁠ to the graduating nurses from the College of Nursing at Texas A&M. This presentation was part of a Life Transitions Series. He discusses how he might be able to do a similar presentation for other groups of graduating college students, as well as groups of investors who are trying to get the most from their company 401k.

The second topic is regarding a new set of tables that should help investors figure out potential future returns for the S&P 500, ⁠Small Cap Value, U.S. 2 Fund Index Portfolio and U.S. 4 Fund Index Portfolio⁠.

The third topic was motivated by Ben Carlson’s articles on “⁠Why Housing is Everyone’s Favorite Investment⁠” and “⁠What is the Historical Rate of Return on Housing?⁠” Paul recently sold his home and discusses the challenges of figuring out how the profits compared to the S&P 500., As promised Paul had his meeting with David Sterman, an hourly CFP, who has followed our recommendations. Paul discusses his services and costs.

Here is his contact information:

⁠https://huguenotfinancialplanning.com⁠

1358 Old Ford Rd. New Paltz, NY 12561

Phone: (917) 553-0675⁠

david@huguenotfinancialplanning.com⁠

For those interested in the Boglehead Conference:

⁠https://boglecenter.net/2024conference/⁠

DCA vs. Lump Sum, Not Trusting SCV, Maximizing Roth, Moving From Ultimate B/H to Smaller Portfolio and More Sep 04, 2024

Show notes

Paul starts the podcast talking about the upcoming Boglehead Conference (Sept.27-29) in Minneapolis. The following link lists the speakers and topics. https://boglecenter.net/2024conference/

Q1: Should I invest $300,000 inheritance all at once or dollar cost average? 02:23

Q2: If SCV is such a great asset class why do the companies all have such low P/E ratios? 8:06

Q3: Given that our Roth IRAs have unlimited investment options how should we approach investing in our Roth accounts to best complement the life cycle funds in our 401k? 21:54

Q4: Should we invest our IRA contributions the first of the year or dollar cost average over the year? 24:56

Q5: I’m 70 and am considering a combination of the 2040 target date fund and small cap value. How much should be in each? 26:34

Q6: Been in Ultimate Buy and Hold since 2013. I’m thinking about simplifying by using 2 or 4 fund portfolios. What are the pros and cons of change? ⁠Recommended reviewing.⁠ 29:37

Q7: Can I still rollover regular IRAs into Roth now that I am retired? ⁠Recommended reading.⁠ 35:50

Q8: As a risk reducer to equities can I use T-Bills and money market funds rather than any kind of bonds. 37:35

Dave Ramsey, Crypto Currency, Trusting Past Performance and More Aug 28, 2024

Show notes

Paul starts with a general discussion of the decision to trust recent returns or make investment based on longer term returns. He uses AVUV and ARKK as two investments you could have made in September 2019. In the discussion he references a video where arkk creator and fund manager predicts future arkk returns.

Q: #1: Why should future results look like the past? 16:15

Q: #2 We are in mid 50s and we think we have more money than we will need in retirement. Is there a rule of thumb for how much money one needs? Should one just figure out their cost of living and back into the amount needed for retirement? 26:50

Q#3 Have you done a comparison of your returns compared to Dave Ramsey’s recommended portfolios? 32:55

Q #4 How can we teach young investors about the advantage of starting investing ASAP? See the following set of PowerPoints for the ⁠⁠Orange County AAII⁠⁠. 40:02

Q #5 What is your take on Crypto Currency? Here is what people I trust say about CC.

Warren Buffett: “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment. “Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.

Ben Carlson: I have no idea what will happen with bitcoin or cryptocurrencies in general in the years ahead. Anyone who thinks they know with certainty how this all plays out is delusional. But I can say that my stance on crypto has evolved over the years to the point where I think the best-case scenario just might be the new digital gold.

Larry Swedroe Swedroe took a more skeptical view of Bitcoin. He pointed out that Bitcoin’s value proposition is questionable. ⁠Bitcoin⁠ has a theoretical limited supply, capped at 21 million coins. However, the existence of an unlimited number of substitute cryptocurrencies means Bitcoin faces a daunting challenge. An asset with an unlimited supply typically sees its value approach zero. Swedroe categorized Bitcoin as a Ponzi scheme, though he acknowledged that it could achieve high trading values based on what people are willing to pay.

Leveraging ETFs, Moving from Cash to Equities, A Track Record You Can't Trust and more Q&A Aug 14, 2024

Show notes

1. My husband and I are moving to Fidelity to set up your Ultimate Buy and Hold Portfolio. How do we make the change from our holdings to your portfolio? Do I have to sell all of my holdings? Plus we want to find an hourly advisor to help. Can you make a recommendation? 1:45

2. I have $1million in a money market fund. Do you think it is time to start reducing the cash position and moving to short term bonds or equity ETFS? 8:45

3. Are target date funds the same as all in one funds? 17:15

4. I would like your guidance on the decision to put together a S&P 500 and Small Cap portfolio using 3 to 1 leveraged fu?nds. Does the extra return justify the higher risk? 20:00

5. How should I protect my portfolio against inflation from the loss of the petrodollar? 35:00

6. From what I can see you have not addressed investment needs of older people in their 80s and 90s. How should I invest? I just can’t afford to lose money at my age. 39:17

7. Would I be dumb to have 10% of my retirement funds in gold? 46:20

8. With the fed getting ready to lower interest rates should I move my money market funds into 10 year Treasuries? 52:40

9. In the small cap blend and small cap value indexes it seems investors don’t get the advantage of owning small companies that grow to be the giants of corporate America. How do you get the premium when you have to sell the companies when they move beyond their index? 59:15

10. What is the difference between your 2 Funds for Life strategy and the two fund strategy that holds the S&P 500 and small cap value? 1:01

Gold, REITs, CDs, Glide Paths, Quilt Charts and More Aug 07, 2024

Show notes

1. What is the best glide path (asset allocation) for a 58 year old pre-retiree and then in retirement? This is the link for Chris Pedersen’s 2 Funds for Life glide path. 2:50

2. I don’t need all of my RMD (required minimum distribution). How should I invest the excess? Here is the link to the video on "My 12 Favorite Vanguard Funds for Retirees” and the link to all of the Fine Tuning Tables. 11:19

3. My wife has easily onset demential. It’s costs $200,000 a year. How should a family invest in a situation like ours? Here is the link to the Vanguard Brokerage CDs (⁠https://investor.vanguard.com/investment-products/cds⁠) and ⁠stantheannuityman.com⁠ for MYGA rates. 17:18

4. What are your thoughts regarding precious metal investing? And if there is a place, what is the best way to do it? 22:52

5. Will the massive increase in passive investing, which has benefited the large cap growth indices, reduce the long term returns of small cap value? Here is the link to the long term returns Paul mentions. 28:50

6. How would the long term returns change if we overweight the U.S. 4 Fund Portfolio with slightly more small and large cap value? Here is the link to the Equity Asset Classes (1928-2023 ) 32:01

7. I’m 72 and my wife is 63. How different should our glide paths be? Here is the link to the Vanguard and Blackrock TDFs. 44:10

8. Are REITTs more like stocks or bonds? 46:41

Puget Sound Q and A with Paul and Chris Jul 31, 2024

Show notes

On July 25, 2024 Paul and Chris made a presentation to the Puget Sound AAII. Paul spoke to the latest research on small cap value and Chris spoke to the latest research on his 2 Funds for Life Portfolio. Following the presentation they answered questions from the guests.

Q: What advice do you give on conversion of regular IRAs to Roth IRAs?
Q: What investments do you recommend to offset large losses in the equity markets?
Q: Why do you recommend AVUS over VOO, or other S&P 500 funds? In Chris’ answer he recommends listeners read his AAII article on ETF Selection.

Q: Why don’t you recommend Long Term Treasury Bond fund? Vanguard Long Term Treasury VGLT
Q: Do you recommend a pension and/or Social Security be considered the equivalent of a bond fund?
Q: Can you compare RSP (an equal weighted S&P 500 Fund) vs. SPY?

Watch the full video here.

Truth Tellers on History of Returns & P.E. Ratios Jul 24, 2024

Show notes

In this podcast Paul discusses an article by Truth Teller Ben Carlson (The Biggest Winners in the Stock Market), regarding a study by Dr. Hendrik Bessenbinder (Which U.S. Stocks Generated the Highest Long-Term Returns )

This study is an update from an earlier study from Bessenbinder that Paul has recommended many times.
Paul also discusses an article by Truth Teller John Rekanthaler, "When Rebalancing Creates Higher Returns—and When It Doesn’t”

This article adds to THE discussion of the impact of rebalancing on the latest video/podcast.

Our TOPPODCAST Picks

Follow Us

Stay Connected

Related Podcasts

Links

Stay Connected