In this second session of our 10-part Boot Camp series, we dive into the piece that’s helped shape decades of investing decisions: The Ultimate Buy & Hold Portfolio.

For nearly 30 years, this research—co-created with the late Rich Buck—has explored a simple but powerful question: What happens when you go beyond the S&P 500 and build a lifetime portfolio across 10 equity asset classes?

Starting with data back to 1970, we walk through the math of compounding, diversification, and disciplined rebalancing. You’ll see how adding small amounts of large value, small cap, REITs, international equities, and emerging markets historically increased returns—without meaningfully increasing risk. The result? A dramatic difference over time, powered by patience and structure.

Whether you’re new to these concepts or have followed this work for years, this episode breaks down the numbers, the lessons, and the real-world implications for long-term investors.

This recording is also a tribute to Rich Buck—an extraordinary collaborator whose work on this topic has reached millions of investors.

Download the tables and watch the video, follow along, and join us as we revisit one of the most impactful investing frameworks we’ve ever created—and set the stage for next week’s deep dive into the Sound Investing portfolios.

What if small decisions — just a half-percent here or an extra year there — could change your financial future by millions?

In this episode, we continue our annual Boot Camp series by tackling one of the biggest forks in the road investors face: stocks and bonds. Drawing on nearly a century of academic research and data, we break down what the math actually tells us about compounding, risk, diversification, and long-term returns.

You’ll hear why:

• Tiny differences in returns can mean millions over a lifetime

• Bonds are designed for safety — not wealth creation

• Equity asset classes behave very differently from year to year

• Diversification across asset classes smooths volatility and improves outcomes

• Trying to “pick winners” is a losing game — and why owning the whole market works

This episode is educational, not personal advice — think of it as a roadmap that helps you ask better questions and make more informed decisions.

 Important: The tables and charts referenced in this episode are available in the PDF. Watching the companion video will make these concepts even clearer.

If you care about making smarter long-term decisions for yourself and your family — this is one to share.

Sometimes the best moments are the unexpected ones. This week brought one of those moments when Daryl Bahls delivered an extraordinary surprise: access to every table used across our entire investing Boot Camp Series — months of work, ready ahead of schedule.

That gift makes it possible to move forward faster, including setting up pages for the upcoming Series and potentially releasing the tables before all the podcasts and articles are complete.

The White Coat Investor: 150+ Portfolios That Work

We revisit the White Coat Investor article “150 Portfolios Better Than Yours” (now over 200 portfolios), originally published in 2014.

The key lesson:
There is no single “best” portfolio — most of the portfolios are legitimate and effective. What matters most is:

• Choosing a sound portfolio

• Understanding why it works

• Staying the course over decades

Early success can be misleading, but the portfolio you choose in the beginning can mean millions of dollars more in the long-term.

Why Portfolio Design Matters So Much

Using historical data going back to 1970, we explore how different strategies produce dramatically different outcomes over time:

• S&P 500 only vs. globally diversified portfolios

• Multi–asset-class investing

• Value-focused portfolios (U.S. and international)

Even small starting amounts can lead to large differences over a lifetime.

What We Do — and What We Don’t Do To Help Investors 

We are:

• Focused on education

• Dedicated to do-it-yourself investors

• Grounded in academic research and evidence-based investing

We are not:

• Financial planners

• Estate planners

• Tax advisors

Our goal is to help investors build portfolios they can trust through good markets and bad — with the potential to land in the top 5–10% of long-term outcomes.

Preview: The 10-Part Boot Camp Series

Over the coming weeks, we’ll release a comprehensive boot camp covering:

1. Stocks vs. Bonds — why this decision alone can be a $10 million difference

2. Equity Asset Class Selection — based on academic research, not trends

3. Simple Sound Investing Portfolios — small, powerful, manageable

4. Adding Bonds Intelligently — controlling risk without killing returns

5. Long-Term Contributions — what steady investing really looks like

6. Fixed Withdrawal Strategies — taking distributions when you retire with only "enough"

7. Flexible Withdrawal Strategies — especially for those who’ve oversaved

8. Target-Date Funds & Glide Paths — with added diversification insights

9. ETF Selection — why DFA and Avantis may help investors stay the course

10. Investing for Children & Newborns — including new retirement account considerations

Each topic will eventually include:

• A podcast episode

• A written article

• Supporting data tables

Daryl has now produced 247 educational tables, all designed to support smarter portfolio decisions.  You will see all of them during the 10 week series.

Upcoming Event + What’s New

Before jumping into today’s questions—there are some good ones—I want to share a quick note.

I’ll be at the Annual RetireMeet on March 7 in Bellevue at the Maidenbauer Building. I’ll be there all day at the booth and will be discussing the inside story on diversification, including new thinking on rebalancing that I believe you’ll find useful.

• Christine Benz —HOW TO RETIRE

  Don McDonald — RETIREMENT EVOLUTION: FROM NONE TO FUN

  Tom Cock — RETIREMENT INCOME: THE 4% RULE & BEYOND

  Kevin Peterson — GETTING THE MOST FROM MEDICARE

  Joe Saul-Sehy — COMMON MISTAKES THAT MAKE RETIREMENT MISERABLE

  The event is available in person and online. In-person attendees receive lunch. Online attendees pay a small fee that supports nonprofits focused on financial education.

  I also spent time this week with Daryl Balls, working on updates to the quilt charts and new tables. We’re excited to share those soon, along with the next Boot Camp series, starting later this month.

  Questions of the Day

  1. How can I avoid getting scammed by a bad financial advisor? 04:03
  2. How can my parents decide when to start Social Security? 07:08
  3. How do I identify my target asset allocation if I am 41 and plan to retire at 65, taking Social Security at 70 and with a pension? 08:47
  4. Can you help me build a sample asset allocation? 11:46
  5. What should I learn first to understand asset allocation? 14:10
  6. How do target date funds fit into asset allocation? 17:42
  7. How does VTSAX fit into this strategy? 17:04
  8. My 401(k) only offers Vanguard Total Market, Mid-Cap Index, and Small-Cap Index. Can I build a good portfolio? 20:40
  9. If I’m contributing monthly, should I rebalance using contributions or make separate trades? 27:59
  10. I have a closed 401(k) with a target date 2050 fund. Is that a good core holding? 28:50

  A Final Thought

  I recently spoke with an investor who realized they didn’t need to draw from their investments at all, thanks to Social Security and a pension—even with nearly $2 million invested.

  When you don’t need the money, you get to choose your medicine—aggressive or conservative.

  We’re excited about the upcoming Boot Camp, new tables, and educational tools. If we can do a better job teaching, our hope is that you’ll do a better job investing—for yourselves and for those who count on you.

  
  

   Links Mentioned in This Episode

  Investor Education

  • ⁠Get Smart or Get Screwed ⁠

  Truth Tellers – Social Security

  • ⁠Social Security Made Simple⁠ by Mike Piper⁠Mike Piper⁠ – Oblivious Investor 
  • When to Take Social Security: Pros & Cons – Jim Dahle (White Coat Investor)⁠https://www.whitecoatinvestor.com/when-to-take-social-security-a-pro-con/⁠

  Asset Allocation & Target Date Funds

  • ⁠Two Funds for Life ⁠– Chris Pedersen
  • ⁠Sound Investing Portfolio Series⁠ (Boot Camp – prior year)
  • ⁠Ultimate Buy & Hold Strategy⁠
  • ⁠Fine-Tuning Your Asset Allocation⁠

  Event

  • ⁠Annual RetireMeet – Bellevue (March 7)⁠

  Research & Tools

  • ⁠Quilt Charts and Tables (Paul Merriman / Daryl Balls)⁠

In this week’s Sound Investing episode, Paul Merriman answers a wide-ranging set of listener questions — from choosing ETFs and building portfolios to managing risk in retirement and investing wisely at every age.

One of the biggest takeaways? There is no universally “best” ETF or portfolio. The right answer depends on your goals, risk tolerance, time horizon, and — just as importantly — your ability to stick with a strategy during difficult markets.

Here are some of the highlights from the episode:

What’s the “best ETF”?
Paul explains that for simple exposure (like the S&P 500), the lowest-cost option often wins. But once you move into areas like small-cap value or factor investing, fund construction and index methodology matter far more than expense ratios alone.

Single-fund vs. DIY portfolios
Paul compares all-in-one solutions like AVGV (Avantis All-World Value ETF) with building the same asset classes yourself. While a DIY approach can sometimes produce higher returns, it also requires discipline and comfort with tracking and rebalancing multiple funds.

Portfolios for different stages of life

• Younger investors (30s): Paul favors all-equity portfolios for long time horizons, assuming the investor can tolerate volatility.

• Pre-retirees and retirees: The focus shifts to managing downside risk, withdrawal rates, and behavioral comfort — not maximizing returns at all costs.

Retirement withdrawals and sequence risk
Using historical examples starting in 1970, Paul shows how withdrawal rates (4%, 5%, 6%) and portfolio composition can mean the difference between ending with millions — or running out of money entirely.

Mutual funds vs. ETFs
ETFs have become more tax-efficient, more flexible, and easier to trade — making them ideal for the smaller, diversified portfolios Sound Investing now recommends.

How to self-manage a portfolio
Paul walks through how to:

• Choose equity asset classes

• Use best-in-class ETF recommendations

• Rebalance intelligently

• Invest weekly without overcomplicating the process

Resources mentioned in the episode:

• Sound Investing Boot Camp
  https://paulmerriman.com/bootcamp/

• Ultimate Buy & Hold Portfolio
  https://paulmerriman.com/ultimate-buy-and-hold-portfolio/

• 2025 Sound Investing Portfolios
  https://paulmerriman.com/sound-investing-portfolios/

• Avantis Investors & AVGV
  https://www.avantisinvestors.com/

• Morningstar Fund Comparison Tools
  https://www.morningstar.com/

• Ben Felix (Canadian investing insights)
  https://www.pwlcapital.com/profile/benjamin-felix/

• REIT background and tax considerations
  https://en.wikipedia.org/wiki/Real_estate_investment_trust

Paul closes the episode with a reminder that diversification means always owning some underperformers — and that’s not a flaw, it’s the price of long-term success.

Thanks for listening, and we’ll see you next week.

For first-time listeners, welcome! In this opening episode of the year, Paul Merriman—founder of the Merriman Financial Education Foundation—looks back at 2025 to uncover what the markets taught us and how those lessons can help do-it-yourself investors make better decisions going forward.

Despite endless predictions about what markets should do, Paul reminds us that his role isn’t to forecast the future—but to help investors understand risk, return, and how to build portfolios they can truly stick with.

In this episode, Paul explores:

• A surprising result from the “Magnificent Seven” stocks

• Why diversification mattered more than ever in 2025

• How different equity asset classes really performed

• What 56 years of data (1970–2026) tells us about staying the course

• Why portfolio structure matters far more than chasing winners

• Two very different—but valid—approaches to fixed income investing

If you want perspective instead of predictions—and data instead of hype—this episode is a powerful way to start the year.

The following are Dr. Pass’ note to his podcast:

This week we end 2025 with a Pediheart tradition - an episode on personal finance for medical professionals with noted authority on index investing and personal finance, Mr. Paul Merriman.

Paul is a retired investment advisor who now has a popular podcast "Sound Investing" and website in which he offers advice on investing for 'do it yourself' investors. In this week's episode, the 5th of his visits to Pediheart, Mr. Merriman discusses 'factor investing' via index-like ETF's and funds.

He also reviews who he believes might benefit from a financial advisor, what sort of advisor most should seek out and why he believes that many do not need one if they can 'stay the course'.

Resources mentioned in today's podcast are below. Wishing all a happy and healthy new year in 2026. 
Paul's website:
https://www.paulmerriman.com/#gsc.tab=0
'Best In Class' ETF's:
https://www.paulmerriman.com/Best-in-Class-ETF-Recommendations2025#gsc.tab=0
Sound Investing 'Quilt Charts':
https://irp.cdn-website.com/6b78c197/files/uploaded/(K)_Quilt_Charts_(1928-2024)_-_2024_Returns_(1).pdf
DFA 'Turn Out The Noise':
https://www.dimensional.com/film
As a reminder, all of the information provided in this week's episode should be considered entertainment and all financial decisions should be vetted with professionals or knowledgeable and trusted friends/family. 

In this episode, Paul shares the thinking behind what he believes may be one of the most important projects of his career—a project guided by a single goal:

That every investor who follows our work will know how to invest for the rest of their life.

To explain why that goal matters, Paul walks through the forks in the road every investor eventually faces—from betting on individual companies to owning entire markets, from chasing excitement to embracing simplicity.

Drawing on real experiences, including private investments that went to zero and one that unexpectedly turned into millions, Paul explains why diversification beats prediction, how a simple portfolio decision may quietly add about 1% a year over time, and why many academics draw a clear line between investing and speculation.

This episode isn’t about chasing returns.
It’s about building a plan you can live with—through good markets and bad—for the rest of your life.

If you’re looking for clarity, discipline, and a framework that helps you stay the course, this conversation is a powerful place to start.

Next week, I’ll be reviewing what we learned in 2025—and what those lessons may mean for 2026 and beyond.

Thank you, and happy holidays to you and your family.

Compounding Project Podcast – Episode 36

In Episode 36 of The Compounding Project Podcast, legendary investing educator Paul Merriman shares timeless insights on long-term investing, the power of compounding, and how everyday investors can build lasting wealth.

Paul explains why starting early is one of the most important financial decisions you can make, how compound growth works quietly over decades, and why low-cost index funds remain the foundation of successful investing strategies.

This episode dives deep into portfolio diversification, the hidden impact of investment fees, and the role of small-cap value investing in improving long-term returns. Paul also offers practical, evidence-based guidance for young investors, parents, late starters, and anyone seeking financial independence through disciplined investing.

Whether you’re new to investing or refining an existing portfolio, this conversation delivers actionable lessons on building wealth the smart way.

1. Starting early and staying consistent matters more than market timing or stock picking.

2. Low-cost index funds and diversification are the most reliable tools for long-term wealth building.

3. Small-cap value investing and minimizing fees can significantly increase lifetime investment returns.

• Your Money and Your Brain

• The Psychology of Money

• Thinking, Fast & Slow

• Spending Your Way to Wealth

Watch the full episode for expert insights on investing, compounding, and financial freedom.

Follow Paul Merriman On Social Media: ⤵︎📷 Instagram: /   / paulamerriman2012  📱 YouTube: /    / @paulmerrimansoundinvesting  To Know More,Follow Sathish Gajula On Social Media: ⤵︎ 📷 Instagram: /   / compoundingproject  📱 YouTube: /    / @compoundingproject  

Timestamps:

00:00 Episode Trailer

02:00 Intro to Wealth and Index Funds

03:20 The Million Dollar Decision

07:04 Investing Tips for Young Parents

12:47 Saving When Money Feels Tight

15:35 Stocks vs Bonds

19:58 Rethinking Stock Market Risk

24:36 Why Investing Is Easier Today

27:06 How Fees Hurt Returns

29:08 When Bonds Make Sense

32:56 Investing Across Generations

34:58 Portfolios by Age

35:52 Starting Late in Investing

41:05 Defensive Investing Basics

42:10 Why Stocks Matter Most

43:04 Beating the S&P 500

48:09 Market Returns Explained

51:22 Why Diversification Matters

54:49 Fees and Long-Term Returns

58:28 Small Cap Value vs Total Market

01:03:25 Equal-Weight S&P 500

01:08:36 Handling Market Volatility

01:11:05 Picking Small Cap Value Funds

01:12:50 Trust in Investing

01:16:42 Hotseat Questions

Over the last couple of weeks, I’ve been recording a series of Q&As that came out of a presentation I gave in November for the American Association of Individual Investors — AAII.

At the end of that nearly two-hour talk, I promised that I’d do a podcast answering every single question that came in. Well… there were 36 questions. That’s a little too much for one episode, so we broke them into three parts.

This is Part 3 — the final 12 questions. If you haven’t heard Parts 1 and 2 yet, we’ll link those in the show notes so you can catch up.

Before we jump in, I just want to say: I’m a huge fan of AAII. I started teaching their local chapters way back in 1984, and over the years I think I’ve presented to just about every chapter in the country — sometimes in person, sometimes by Zoom — but always to people who are genuinely committed to learning how investing works.

If you’ve never checked out AAII, I’ll include a link in the notes for a low-cost trial membership. Take a look around and see if it’s a resource that fits your investing journey.

Alright — let’s get to the last 12.

1. Will you develop strategies using the equal-weighted S&P 500? 01:44

2. Can you recommend advisors who follow your strategy? 07:20

3. Should I move mutual funds to ETFs in taxable accounts despite taxes? 11:26

4. With markets at highs, should I keep dollar-cost averaging or rebalance? 16:17

5. What portfolio fits 10 years to retire and 20–30 years of decumulation? 24:08

6. Will the configurator shift to only Avantis/DFA funds in 2026? 30:37

7. What does “inflation-adjusted fixed withdrawals” mean? 33:56

8. How should I invest an inheritance for kids/grandkids ages 2–45? 38:21

9. Ultimate Buy-and-Hold vs. two- or four-fund strategies — which is better? 49:03

10. Should political conditions change retirement portfolio decisions? 59:12

11. How do I find a fee-based/hourly advisor (Rhode Island question)? 1:05:56

12. Should very conservative 91-year-olds move beyond bonds and cash? 1:13:28

    
    

    Part 1 of the AAII Q&A Series 
    Part 2 of the AAII Q&A Series 
    AAII trial membership offer (the ~$2 first month deal)
    Boot Camp series hub 
    Fine-Tuning Your Asset Allocation table / lesson

    Sound Investing / portfolio decade return tables —
    Fixed vs. Variable Withdrawal episode/article 
    H-2A table referenced in Q9 
    Chris Pedersen Boot Camp presentation (Two-Fund for Life) 
    Garrett Planning Network advisor directory 
    HelloNectarine hourly advisor platform 
    PlanVision / Mark Zoril reference