Sound Investing

Chris Pedersen answers your questions: Best in Class, 2 Funds for Life and more!

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Join Paul and Chris for this podcast/video they recorded. During the conversation Paul  mentions Chris’ free copy of  “2 Funds for Life”  and a fascinating interview with Professor Scott Cederburg on Rational Reminder.  Cederburg is an advocate for a lifetime portfolio of all equities. 


The following are the topics and questions they discussed:  

  1. What does an investor do if a small cap value fund is not available in their 401(K)?  Does a small cap blend fund, that is available, have the same impact as small cap value?
  2. How do you choose between investing in a higher expense ratio ETF (say Avantis) compared to investing in a low expense ratio small cap value index fund?  Would the decision be as simple as going with the lower expense ratio fund?  
  3. How do taxes impact your recommendations whether the asset class is held in taxable or tax advantaged accounts?  Specifically, the S&P 500 fund that has little to no annual taxes vs small cap value which is less tax efficient.
  4. Are you tempted to invest in individual stocks or actively managed funds?  
  5. Since small cap value funds can have long periods of underperformance,  does that suggest  those approaching retirement should avoid small cap value funds?
  6. How did you react to the March 2020 Market Meltdown and other past major market declines?   Did you try to take advantage of the declines as a buying opportunity?
  7. What about combining 25% each small cap value and S&P 500 fund with  50%  target date fund?  
  8. What’s the best way to move from your present holdings to a 2 Funds for Life Portfolio?
  9. Where do I find information on how you make your selection of Best In Class ETFs?  Here is the page that has links to the articles, podcasts and video.  Plus here is a link to Chris’ AAII article on the topic.
  10.  I’m setting up a  50/50 small cap value/target date fund.  Would it help to add international small cap value?
  11. How about using two small cap value ETFs?  DFA and Avantis each have similar ETFs but different portfolios.  
  12. What is the status of Chris’ new white paper on 2 Funds for Life?
    13. ...more
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    Sound InvestingBy Paul Merriman
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