Watch the video here⁠ Join me on Catching Up to Fi l with Rick Ferri to discuss key investing topics like asset allocation and the pros and cons of small-cap value vs. total market funds. TIMESTAMPS / CHAPTERS 00:00 ⛓️ Understanding Bonds and Young Investors 02:31 🌟 Introduction to Financial Literacy Titans 03:12 🎓 Paul Merriman's Financial Education Foundation 04:18 🧠 Rick Ferri and the Bogle Center for Financial Literacy 12:09 ⚖️ The Importance of Asset Allocation 23:11 🌍 Debating International vs. US Stocks 35:12 🗓️ Target Date Retirement Funds: Pros and Cons 45:55 📈 Exploring Small Cap Value Investing 49:34 🧩 Understanding Non-Traditional Index Funds 50:28 🔍 Small Cap Value Performance Analysis 52:56 👨‍👩‍👧‍👦 Generational Wealth and Portfolio Management 53:54 🧬 Diverse Value Factors in Investing 55:55 🚧 Challenges of Small Cap Value Investing 57:33 🧭 The Philosophy of Long-Term Investment Strategies 01:01:11 🧪 Debating the Evidence-Based Investing Approach 01:12:46 🛡️ The Importance of Staying the Course 01:22:05 🎤 Final Thoughts and Recommendations

Watch video here In the left corner, we have Paul Merriman, the seasoned finance veteran weighing in at 183 pounds. In the right corner, Dr. Karsten Jeske, the scrappy newcomer at 208 pounds. The bell rings, and the small cap value debate begins. This episode features a financial boxing match between two investment heavyweights with dramatically different perspectives. Paul Merriman champions diversification through the efficient frontier, which means adding small cap value to your portfolio. Dr. Karsten Jeska has “thrown cold water” on this approach, favoring simpler strategies like “VTSAX and chill.” The stakes are high — we’re talking potentially millions of dollars in your retirement account over decades. Merriman argues that history shows clear evidence for small cap value’s premium. From 2000 to 2009, small cap value outperformed the S&P 500 in all but one year, compounding at 10 percent while the S&P 500 returned negative 1 percent. He believes this pattern will continue, creating a powerful diversification effect when combined with broader market indexes. Jeske counters that small cap value’s outperformance is mostly “front-loaded” in history, happening before anyone knew about it. Since 2006, small cap value has underperformed. He argues that once an advantage becomes widely known, it disappears in an efficient market. Adding small cap value might even be “di-worsification” — increasing complexity without improving returns. The debate expands beyond small cap value to touch on: Active vs. passive investing strategies Market timing vs. buy-and-hold approaches Simplicity vs. complexity in portfolio construction The role of faith vs. evidence in investment decisions While both experts disagree about small cap value’s future, they agree on fundamentals: invest early, stay invested for the long term, and understand that no one can predict markets with certainty. What starts as a technical debate evolves into a philosophical discussion about evidence, probability, and the limits of our knowledge — all with millions of retirement dollars hanging in the balance. Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths. (0:00) Debate intro: small cap value vs index funds (4:01) Merriman: small cap value offers premium returns (9:40) Jeske: small cap value underperformed since 2006 (18:20) Historical performance data significance (25:15) Stakes: difference of millions over time (33:08) Diversification vs added volatility debate (41:45) Risk-adjusted returns comparison (49:08) Questioning true diversification benefits (57:40) Value traps and actively managed funds (1:05:08) Technology stocks vs value investments (1:13:45) Data selection bias in studies (1:19:40) Faith vs science in investment decisions (1:29:20) Personal risk tolerance considerations (1:36:08) Closing arguments on investment strategies (1:42:08) Paula declares the debate a draw

If a retired investor has the ability to use a flexible distribution strategy it will likely produce one of the best financial outcomes in retirement. Before discussing flexible distributions Paul lists the reasons he believes that 99% of successful long term depends on defensive steps. After listing 18 defensive decisions he explains why flexible distributions are better than fixed distributions for those who have over said. The presentation includes 16 distribution tables that can be found in this pdf for the presentation . In each case Paul compares the difference in returns and risk between the fixed and flexible distribution strategies. The discussion compares returns and total distributions for two of the 9 sound investing portfolios: one using the S&P 500 and the other the U.S. 2 Fund Portfolio (50/50 S&P 500Small Cap Value). Other links noted in the presentation: Sound Investing Portfolios

The move from the accumulation to distribution period of an investors lifetime includes some very important decisions. What asset allocation between equities and fixed income? What combination of equity asset classes in the equity portion, as well as fixed income asset classes? What amount of distribution will be made annually? Will the payments be monthly, quarterly or annually? Will payments be adjusted for inflation and how often? Will the distributions be based on a fixed distribution with regular adjustments for inflation (the topic in this presentation) or on a flexible basis (the topic of the next segment)? In this podcast Paul uses 15 slides to address the questions above. It is recommended the viewer print out the ⁠⁠⁠ ⁠PP presentation⁠ to make it easier to follow the numbers. Many may find it is easier to follow the information on ⁠ Paul’s video⁠ ⁠ on the same topic. If you have questions about the presentation please leave comment or question in the comment section of the video or email ⁠⁠paul@paulmerriman.com⁠⁠ . For those sending an email please let us know the topic of the Boot Camp presentation.

Watch video here  Young and first time investors have to address a number of monumental decisions. How much money to save for the future How much they should invest in equities and bonds How much of the equities should be in large, small, value, growth, U.S. and international asset classes How much to increase the investment each year This podcast/video helps the investor address those decisions. For those listening to the podcast here is a link to the pdf of all of the tables referenced in the presentation. He only focuses on a handful of tables but here is a ⁠ link for those who want to review the entire set of tables.⁠ Paul discusses the accumulation process from the viewpoint of an investor as well as a small business owner. If you have questions please send them to ⁠paul@paulmerriman.com⁠ or leave them in the comment section below.

This is the 4th in a series of 9 Boot Camp videos/podcasts.  The previous three segments covered : ⁠Stocks vs. Bonds⁠ ⁠The Ultimate Buy and Hold Portfolio⁠ ⁠Sound Investing Portfolios.⁠ In this presentation Paul focuses on the differences between the risks and returns of different percentages stocks and bonds. He also discusses one table that mixes different percentages of the S&P 500 and small cap value.Here are a couple of videos that focus on small cap value. ⁠ $13.83 Million? Yes Please! Paul Merriman’s Small Cap Value Strategy ⁠ ⁠ The one asset class you must own

⁠Watch Video here⁠ Chris Pedersen updates his recommendations and describes his selection process in an interactive presentation with Paul and Daryl along for the ride. This "Best In Class ETFs Recommendations" presentation is the 9th in the Boot Camp Series. (We have not completed some of the earlier presentations due to the high interest in Chris' Best In Class Recommendations). The focus of each the Boot Camp presentation is to help investors make the best of what we consider to be the biggest long term decisions they will make. Of course we cannot know the ETFs that will produce the highest returns but we can measure the likely impact of the factors that Chris discusses during his presentation. On behalf of all of the people who find this work helpful, as well as Daryl Bahls and myself, I want to thank Chris Pedersen for all he has done to help us understand the potential long term advantage of his analysis. It is our hope that his work will give investors the confidence and commitment to “stay the course" in the normal ups and downs of the market. 00:00:00 - Intro 00:07:15 - Changes 00:12:31 - Factor Basics 00:18:00 - Selection Criteria 00:20:21 -- Quantifying Differences 00:24:32 -- Comparing in an Asset Class 00:31:10 -- More than just numbers 00:32:12 -- BIC ETFs on Website 00:33:05 -- US Large Cap Blend 00:34:33 -- US Large Cap Value 00:37:40 -- US Small Cap Blend 00:42:30 -- Int'l Large Cap Value 00:43:30 -- Int'l Small Cap Blend 00:44:15 -- Em. Mkts Small Cap Blend 00:44:50 -- Portfolio Configurator 00:46:25 -- Roboadvisor ETFs 00:51:06 -- Versus Russell 2,000? 00:54:00 -- Avantis & DFA Advantage 01:03:36 -- Analysis Timeframes 01:04:44 -- Closing Remarks  Links: ⁠Best-in-Class ETF Recommendations Page⁠ ⁠Portfolio Configurator⁠ ⁠Sound Investing Portfolios Bootcamp Page⁠

The 2024 numbers are finally in and we have produced the #1 investment decision in the Bootcamp series. There is no question that the biggest lifetime decision an investor makes is the choice between the safety of bonds and the potential long term growth of stocks. Here is a ⁠⁠ link⁠⁠ to the pdf of the set of slides Paul uses in the presentation. The presentation includes the ⁠⁠updated 1, 15 and 40 year returns tables ⁠⁠ along with the ⁠⁠quilt charts for the 1928 to 2024 period⁠⁠ . Our thanks to Daryl Bahls who has put together most of the tables in the Bootcamp series. If you have questions please send them to ⁠⁠paul@paulmerriman.com⁠⁠ . Please put Bootcamp #1 in the subject line.  ⁠Watch video here.⁠

The purpose of this podcast/video is to help investors understand the likely risk and return parameters of small cap value, S&P 500, 2 Fund Portfolio (50% each SCV/S&P) and 4 Fund Portfolio (25% each SCV/S&P/SCB/LCV). In each case the best, worst, and average 1, 2, 3, 5, 10. 15, 20, 25, 30, 35, 40 year returns are listed. The following tables are discussed: ⁠S&P 500 Historical Risk and Return⁠ ⁠US SCV Index Portfolio Historical Risk and Return⁠ ⁠US 2 Fund Index Portfolio Historical Risk and Return⁠ ⁠US 4 Fund Index Portfolio Historical Risk and Return⁠  Also the risk and return page from the ⁠Sound Portfolios ⁠ is referenced.

This is the second presentation in the Boot Camp Series. Click for video . The first presentation (Stocks Vs. Bonds) will be available in the next two weeks. This presentation makes the case for diversifying a portfolio using multiple equity asset classes. Paul uses 4 set of tables to make his case: A1a: Ultimate Buy & Hold Equity Portfolio (50% US/50% Int'l) A2a: Alternative Equity Portfolio Tables (50% US/50% Int'l) A1b: Ultimate Buy & Hold Equity Portfolio (70% US/30% Int'l) A-2b: Alternative Equity Portfolio Tables (70% US/30% Int'l) Paul also mentions the recent video/podcast that addresses the Sound Investing Portfolios. https://www.youtube.com/watch?v=XGv0ZdZ8adk https://www.paulmerriman.com/2025-bootcamp-3-sound-investing-portfolios

In this Podcast, Paul, Chris, and Daryl describe the Sound Investing Portfolios and their background, rationale, construction, and performance. Click for video link 00:00 - Intro 02:00 - DFA Background 05:47 - Portfolio Rationale 11:45 - Allocations 14:11 - Backtesting & Comparisons 19:32 - Rewards of Diversification 28:42 - Differing Good Times 32:40 - 70/30 US/Int'l Portfolios 35:05 - Which Funds? 39:08 - Close During the Podcast the following tables were referenced: ✅ ⁠ Table H1a - Sound Investing Portfolios: Asset Allocations (50% U.S. / 50% Int’l)⁠ ✅ ⁠Table H2a - Sound Investing Portfolios: Comparative Data (50% U.S. / 50% Int’l)⁠ ✅ ⁠ Table H3a - Sound Investing Portfolios: Annual Returns (50% U.S. / 50% Int’l)⁠ ✅ Table H4a - Sound Investing Portfolios: Quilt Chart (50% US / 50% Int'l) ✅ ⁠ Table H1b - Sound Investing Portfolios: Asset Allocations (70% U.S. / 30% Int’l)⁠ ✅ ⁠Table H2b - Sound Investing Portfolios: Comparative Data (70% U.S. / 30% Int’l)⁠ ✅ ⁠Table H3b - Sound Investing Portfolios: Annual Returns (70% U.S. / 30% Int’l) ✅ Table H4b - Sound Investing Portfolios: Quilt Chart (70% US / 30% Int'l)

In this insightful conversation, renowned financial expert Paul Merriman shares his wealth of knowledge and experience in investing. He discusses his journey from stockbroker to founding his own investment advisory firm, and eventually establishing the Merriman Financial Education Foundation. Paul delves into various topics, including: ✅ The importance of data-driven investing and understanding the math behind it ✅ His meeting with John Bogle and their differing philosophies on investing ✅ The case for small cap value investing and its historical performance ✅ The challenges of market timing and the benefits of portfolio diversification ✅ The emergence of ETFs and trend following strategies PaulMerriman.com Tables, Graphs and Charts Boot C a mp S&P 500 vs Small Cap Value Quilt Charts Equity Index Returns Free Copy- We’re Talking Millions Free Copy- 2 Funds for Life Best in Class ETF Update 2024 ETFAtlas.com – A new portal offering a comprehensive catalog of ETFs from the United 00:00:00 Introduction and ETFAtlas.com 00:03:30 Paul's early career and transition to investing 00:08:50 Founding an investment advisory company 00:13:05 Transition to financial education 00:19:20 The importance of data-driven investing 00:23:05 Meeting with John Bogle and differing philosophies 00:29:20 The importance of having more than enough for retirement 00:32:50 Teaching young people about investing as a business 00:36:20 The magic of compound interest in investing 00:45:50 The case for small cap value investing 00:54:40 Trend following strategies and ETFs

The podcast starts with a brief history of the growth of the Merriman Financial Literacy Foundation. From it’s small beginning in December 2012, it has produced over 1000 videos, articles and podcasts, published 6 books, spoken at many national conferences, underwritten a university class on investing for non finance majors at Western Washington University, produced portfolios for do it yourself investors, produced recommended mutual funds and ETFs to build the portfolios. Most recently there is a new effort to give every Western student a meaningful exposure to personal finance. This is being done under the Merriman Financial Literacy Program at Western.  Two years ago we introduced the Merriman Boot Camp. The purpose of the project is to help investors make the best financial decisions. In the podcast Paul discusses 14 of those decisions and how we are enlarging our educational efforts. He also notes that the Boot Camp pages will also contain a new Q&A section on each topic as well as additional information from our list of Truth Tellers.

In this first Q&A podcast of 2025, Paul, Daryl, and Chris discuss several listener questions and expand on Paul's rebuttal of Big ERN's recent criticisms of diversifying with small-cap value. Watch video here. 0:00 – Introduction 0:29 – Responding to Big ERN's critique 2:11 – Small-cap value lumpsum vs. dollar-cost averaging 6:38 – Daryl's take on SCV's premium persistence 8:46 – Chris' take on SCV's premium persistence 15:50 – Paul highlights the random timing of SCV vs. S&P500 returns 19:50 -- Are there good alternatives to Vanguard's Wellesley fund? 26:18 -- Does 2 Funds for Life mean no SCV in retirement? 29:35 -- Why not let Buffet manage our money in BRK.B? 33:52 -- What portfolio to get a 3.6% safe withdrawal rate in retirement? 38:53 -- Which accounts do we tap for our annual spending needs? 49:39 -- Why doesn't the Portfolio Configurator include REITs and emerging markets? 54:52 -- When will the Best-in-Class ETF recommendations be updated? These tables were referenced- ⁠Table G-1b - Fine Tuning Table: S&P 500 vs US SCV Equity Portfolio - Out-Performance ⁠ ⁠Tell-Tale_Charts⁠ ⁠2 Funds for Life PDF⁠ ⁠2 Funds for Life on Amazon⁠

There has been a lot of anti small cap value articles and podcasts over the last several years. I have been asked many times whether I think the small cap value premium is a thing of the past.In this podcast I have addressed the most commonly discussed criticisms of small cap value. During the presentation I reference a blog entitled," Small-Cap Value Stocks: Diversification or Di-WORSE-fication?⁠ " The Early Retirement Now newsletter is written by Karsten Jeske, PhD, CFA. Here is a ⁠video⁠ of a friendly debate that Karsten and I had on the “Forget About Money” podcast. Listeners will learn that Karsten and I have very different beliefs about what returns best represent the small cap value premium. I reference the real time Morningstar performance results of DFFVX (2000 to present), DFSVX (1993 to present) and AVUV (2019 to present). During my discussion I reference ⁠Table G-1b, Fine Tuning Table: S&P 500 vs. US SCV Equity Porfolio - Out-Performance⁠ and ⁠Table H2a - Sound Investing Portfolios: Comparison Data ⁠ I also referenced a Q&A response on Truth Teller Rob Berger regarding his ⁠personal take on small cap value in his own portfolio⁠ . I also mention the interview with Jim Dahle at the 2024 Bogleheads Conference. https://www.youtube.com/watch?v=8C3KhRJCwCQ⁠

The following are Dr. Pass’ note to his podcast: "This week to conclude 2024 we speak with noted investment expert Mr. Paul Merriman to discuss a few topics related to personal finance and investing. First we tackle the notion of having 'enough' to retire. Is there a magic value and how would one think about this? Why is an S&P 500 Index or Total US Stock Market Index a fine 'core' investment and how might one possibly improve upon its performance? What are some of the psychological hurdles we have as investors and potential retirees? Mr. Merriman reviews these and other topics on our end of year episode.” Paul Merriman's Website Paul's "Quilt" Chart Paul's "Bootcamp" page Last Year's episode of Pediheart was replayed on Mr. Merriman's site Paul's book "We're Talking Millions"

On December 26, 2019 Paul recorded a podcast entitled, “Could This Be the #1 Reason to Invest in Index Funds?” We were shocked to learn that over 1,000,000 investors opened the podcast. In this podcast he addresses the topic again in “Could This Be the #1 Reason to Invest in Index Funds? Part 2” The podcast reviews the well established index advantages and adds one that may be the biggest reason an investor is able to find comfort staying the course in an index fund for the rest of their life. This might be a good podcast to share with your young adult children.

Paul, Daryl, and Chris discuss the risks of investing and life. Paul starts with an introduction and admission of his challenges managing risks related to diet and health. He then gets Chris and Daryl to chime in with their definitions and perspectives on risk. Daryl then shares a framework for evaluating risk from his days as a systems engineer. The framework looks at risks in two dimensions: likelihood and impact (or severity). He describes how the framework can help prioritize which risks to mitigate and gives examples of how some financial risks might be reduced in both dimensions. Chris is reminded of the book "Die with Zero," and mentions how risks extend beyond finances to experiences. Paul, Chris, and Daryl then discuss some of their challenges in managing the risks of their own portfolio allocations and how their behaviors differ from what might be considered ideal. This leads to discussing the dangers of learning the wrong lessons with examples from inside and outside the personal finance world. Paul reads from the Jonathan Clemens article that inspired this podcast: "The Risks We Miss." https://humbledollar.com/2024/07/the-risks-we-miss/ Paul then closes out the podcast. Outtakes include Paul and Chris discussing how the Best-in-Class ETFs can help mitigate risk, and what Daryl wants for Christmas.lmerriman.com, for hundreds of free podcasts, articles, recommendations for ETFs, mutual funds, 401k plans and free eBooks and more.

While I was at the Bogleheads conference in Minneapolis earlier this year, I had a lengthy interview with Paula Pant. I enjoyed the interview and found lots of questions and comments under the YouTube presentation that I wanted to answer. While I wrote short comments on the site, I decided many of the questions were worthy of more discussion.Here is a link to the ⁠YouTube ⁠ interview and ⁠podcast⁠ : #1. “Most of my holdings are in cash as I cashed out last time the market went down. How do I stay invested and think long-term to help me ride out the ups and downs of the market?” 02:17 #2. “I’m just beginning my investment journey and planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns.” ⁠https://rethinking65.com/the-preference-for-dividend-paying-stocks-is-irrational/⁠ 10:41 #3. "What Fidelity Funds do you recommend to build your ⁠4 Fund Portfolio⁠ ?" 15:00 #4. "How often do you recommend rebalancing the 4 Fund Portfolio?" 17:02 #5 "Nobody knows what’s going to happen next so we should practice some humility and CHOOSE a strategy with a long-term edge." What is the edge and what else do you need to know dividend stocks k? 21:02 #6. "I”m not looking to beat the S&P 500…I’m more than happy with the returns I get from it.” Does that mean it’s right for you? 24:36 #7. In response to Paul's recommendation of the 4 Fund Portfolio this is what one viewer said, “For what it's worth, backtesting shows his proposed fund portfolio does not do better than VTI or VOO.” Paul responds. 28:32 #8. "The only small cap value available in my 401k is DFSVX which has an expense ratio of .30%. Is this expense ratio too high? 32:32 #9. "Can you give ETF recommendations for all of the equity asset classes?" ⁠ Here are the Best In Class recommendations⁠ . 35:23 #10. Please recommend more information on how I might adjust my 401k. ⁠We're talking millions⁠ and ⁠2 funds for life⁠ . 36:37 #11 "Would you accomplish similar performance results by setting up a strategy using sector diversification instead of asset class diversification?" 40:01 #12 "I’m helping my 17 year old daughter with her Roth IRA. What do you think about shooting for an all equity 40/30/30 portfolio of US small cap value/S&P 500/Total International market?” 42:23  #13. “This guy has been pushing small cap value and underperforming for years. Sorry, no thanks." 44:25