December 26, 2013


Dear Friends,

As we say farewell to another year, I’d like to take this opportunity to express my appreciation for you, our readers. One of the great gifts in life is meaningful work, and I have the pleasure of continuing mine in retirement. It is through this amazing medium of the worldwide web that I am able to share with you my lifetime of knowledge about sound investing. My intention is that you – and those you love – enjoy greater abundance with less risk and more peace of mind.

I love hearing from you and thought I would share a few questions recently received, and my answers. You can read many more at this page on my website.

Q: My husband and I are just stepping into the world of mutual funds. We immensely enjoyed reading 2 of your 3 books online and are currently reading the third book Get Smart or Get Screwed! We decided to invest in a Vanguard Mutual Fund but we need a minimum of $3,000 for most of the funds there, which is all we have to spare right now. So, which fund should it be invested in?

A: I am pleased you have found my books helpful.  I think you should use one of the commission-free ETF portfolios I recommend. If you work with my Schwab recommendations you can build a completely diversified portfolio with $1,000 or less.

Q:  Do you have any performance data on your strategy starting in 2000? Starting back in 1970 is not very interesting – the market has changed since then.

A: Actually, the longer the performance the more meaningful it is. If investors had been aware of the losses in 1973-1974, they would not have been surprised by the losses during the 2007-2009 bear market. The losses were almost exactly the same in both periods. The best information I have for any period starting in 1970 is found on my Fine Tuning Table. The all-equity worldwide portfolio is next to the S&P 500, so it is easy to compare any of the last 43 years. I also suggest you compare the 50% bonds/50% equity with the S&P. The returns have been virtually the same for both strategies but the 50/50 is less than half the risk. Here is a link to the table. If you want shorter-term returns using Vanguard, I suggest you read this recent Vanguard article.

Also, nothing warms my heart as much as hearing how my advice has helped others, so I want to share with you a couple of recent compliments:

Dear Mr. Merriman: Like most, I fail to take the time to openly acknowledge someone I consider unique. I am making an exception this time because few people that I have been associated with, in any capacity, have done for others for no other apparent reason than to share their knowledge and experience. You are one of those people and I personally am grateful. – N. Meier 

Paul, I have been following your portfolio advice for around 15 years now and it has served me well in my retirement since 2000. Thanks for a great retirement! – J. Henderson

I could not be doing this work without my great team: financial writer and long-time associate and friend Rich Buck, business and marketing coach Aysha Griffin, website manager Margie Baxley and social media manager Berenice Parra Vazquez.

Thanks also to Dr. Pamela LaBorde, who is doing a great job teaching the course I am sponsoring at Western Washington University. Her work will change the lives of a lot of young people. She shared: “several students told me it was the most practical course they had ever had.”  And thanks to Dr. Sandra Mottner who is responsible for the long-term survey of students who complete our Personal Investing course. I have seen the test results for the first quarter and I am convinced that we are on track to accomplish what I hoped. Of course the real test is what they do with their investments long after I am gone.

Thanks to you all – and my supportive family – for another great year, with more to come in 2014!

To Your Success!


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