Sound Investing

Q&A Follow-up to “Simple & Effective Balanced Portfolios for Lifetime Investing Success”

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In a live AAII webinar on Oct. 21, 2020, Chris Pedersen, Director of Research at The Merriman Financial Education Foundation, presented some very simple portfolios that achieve massive diversification and how to apply a variety of approaches during both working years and retirement. Following this presentation, Chris, Paul Merriman and Daryl Bahls, Director of Analytics, met (virtually) to address additional questions received during the event.

  1. What withdrawal strategies do you recommend?  Should I take money equally or draw from the fund that has grown the most?  How do RMDs change things?
  2. How do you manage a do-it-yourself 2 Funds for Life portfolio using only a U.S. Total Market Fund and a U.S. small-cap-value fund?
  3. What percent of investors can sustain a strategy the means experiencing a 50% decline?
  4. Why did the Trev4 Portfolio do so much better in Chris’ presentation compared to Paul’s presentation?
  5. Why don’t you mention mid-cap funds?
  6. How can an investor determine what factors their stocks and bonds fall in to?
  7. How can an investor add some value and size factors to their portfolio without exposing them to too much risk?
  8. What mix of assets are suggested to a retiree with the goal of asset preservation that keeps up with inflation?
  9. In the Vanguard TDF example, why is there a disproportionately lower increase in return as you go up in the stock exposure?
  10. how much will taxes from rebalancing hurt my returns in a taxable account?
    • To view the graphics from this Q&A session (thanks to Daryl Bahls), click here.
    • See the original AAII presentation here. 
    • For a free download of the original presentation slideshow (by Chris Pedersen),click here.

      • This podcast is also available as a Video.

      This podcast is part of the educational offerings from The Merriman Financial Education Foundation, a registered 501(c)3.  If you found value in this podcast, here are four ways to support the podcast and our foundation:

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      Sound InvestingBy Paul Merriman
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