Sound Investing

Chris and Paul explain what target-date funds are and do, and how to augment them with some small-cap value to get the broad diversification benefits of the other Sound Investing portfolios.

They describe several approaches and tools investors can use to determine what might be best for them.

CHAPTERS

00:00 Intro

03:03 Target-Date Funds

07:00 Glide Paths

15:17 TDF Backtesting

19:55 TDF Weaknesses

26:20 "Easy" 2FFL

34:46 "Moderate" 2FFL

37:48 "Aggressive" 2FFL

41:00 Customizer

52:15 Calculator

61:07 Books

66:00 Outro

LINKS:

• Wharton: Target Date Funds & Portfolio Choice in 401(k) Plans
• Morningstar: “2026 Target-Date Fund Landscape”
• Chris' Tables of 2 Funds for Life and Target Date Funds (PDF)

Paul sits down with Chris Pedersen and Daryl Bahls for the first Q&A session in months — and this one is built around the questions readers and listeners ask most often. Chris and Daryl share what they're working on next (Best-in-Class ETF updates, Target Date Fund work, telltale charts, risk-adjusted return analysis), Paul talks about a smarter way to use AI for the questions outside our wheelhouse, and the team works through six reader questions about portfolio design — from combining model portfolios to choosing between fund families.

If you've ever wondered whether your portfolio is "right," this conversation will help you think about it the way Chris and Daryl do.

1. 8:30 — Should I combine the Worldwide Four Fund, U.S. Four Fund, and Worldwide All Value with a small cap value tilt?
2. 16:00 — How do I read the Sound Investing tables to compare portfolios?
3. 30:30 — Worldwide All Small Cap Value vs. the U.S. Two Fund — which is better?
4. 38:15 — My Vanguard Four Fund uses VOO, VTV, VB, and VBR — am I using the right ETFs?
5. 41:30 — How do Vanguard, Fidelity, Schwab, DFA, and Avantis compare on size and value exposure?
6. 46:30 — How do I get help with Merriman portfolios when I need it?

Table B2 Table H2 Fine Tuning Tables Portfolio Configurator

You'll get the full answers, the data behind them, and Chris and Daryl's reasoning by watching or listening.

Watch the video here- https://youtu.be/BdTNOkALpuQ

Paul and Chris introduce the new Avantis and DFA Best-in-Class fund family recommendations and talk about the shift away from evaluating and recommending à la carte choices from multiple fund providers. 

They emphasize that the quality and breadth of the offerings from Avantis and DFAhave reached a point where it's better and more sustainable to recommend these fund families than to continually change recommendations among funds that are increasingly close unexpected performance.

Best in Class ETF recommendations https://www.paulmerriman.com/best-in-class-recommendations

Portfolio Configurator https://lookerstudio.google.com/u/0/reporting/a941a5d4-0929-45ea-b22e-3bb82dc334ff/page/99wxc?s=hqmha3-AK5k

This special two-part session opens with Paul Merriman solo — paying tribute to Tim Ranzetta of Next Generation Personal Finance, sharing the latest numbers on state-mandated financial literacy, and walking through Daryl Bahls' quilt charts to show annual earnings invested in the S&P 500, large-cap value, small-cap blend, and small-cap value since 1928.Then Paul sits down with Christine Benz — Morningstar's Director of Personal Finance and Retirement Planning, and author of How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement — for a wide-ranging conversation on how to actually make a retirement portfolio last.Christine lays out her five-step plan for anyone retiring in 2030 or 2035: turbocharge savings, rethink household spending, build seven to ten years of "safer assets" for portfolio withdrawals, diversify globally, and use TIPS to protect purchasing power. She and Paul dig into how to structure fixed income (short, intermediate, TIPS), why she's cooler on REITs than she used to be, when a simple income annuity makes sense, and why alternatives rarely earn their keep.They also cover performance-chasing the S&P 500, balanced funds vs. building your own portfolio (including Paul's Wellesley/Wellington pairing for hands-off investors), how AI is starting to change the financial advice landscape, and the honest answer to "have you planned out to the day you die?" — even from a Morningstar executive.The audience Q&A covers bonds vs. T-bills, down-payment savings, the four-fund portfolio, Vanguard asset allocation for retirees, tax-efficient withdrawal sequencing, TIAA annuities, managed futures, and gold.Part of the Spring Financial Education Series hosted by the Bainbridge Community Foundation in partnership with the Merriman Financial Education Foundation.Coming up in this series: Mike Piper (April 21) and Bill Bernstein (April 28).🔗 LINKS & RESOURCES:📖 How to Retire — Christine Benz🎙️ The Long View Podcast🌐 https://www.morningstar.com/people/christine-benz📘 https://www.ngpf.org🌐 https://paulmerriman.comTIMESTAMPS:📚 PART 1 — Paul Merriman Solo0:00–Welcome from Matt Longmire2:55–Paul Merriman intro3:50–Tim Ranzetta & NGPF7:00–Financial literacy stats9:30–Why NGPF is free10:30–Ben Carlson & oil shocks13:50–Risk and Reward preview14:40–Quilt charts explained17:00–$100 since 192820:00–Quintile rankings22:30–Four-fund consistency24:00–Volatility discussion25:30–Best/worst decades🎙️ PART 2 — Christine Benz Interview27:00–Christine joins29:00–Retirement mindset31:00–Planning for 2030/203532:30–Boosting savings33:30–Lifestyle adjustments35:00–7–10 years safer assets38:00–Bond strategy40:00–Risk tiers (cash → bonds)42:00–Equity allocation44:30–TIPS importance48:00–Buy-and-hold vs timing50:00–Handling macro fears52:30–Top risks54:00–Annuities overview56:00–SPIAs & DIAs58:30–Income psychology1:02:00–More resources1:04:00–Alternatives critique1:07:30–401(k) concerns1:10:00–Investor gap1:12:00–Christine’s planQ&A:1:15:00–Bonds vs T-bills1:20:00–$95k down payment1:22:00–Four-fund portfolios1:25:00–FXAIX vs VOO1:26:00–Model portfolios1:29:00–Balanced funds1:33:00–Tax-managed funds1:34:00–Active vs passive1:39:00–Bond ETFs1:41:00–TIAA annuities1:42:30–Withdrawal strategy1:44:00–AI investing1:46:00–Future of advice1:50:00–Gold & alternatives1:52:00–Closing thoughts1:53:00–Next episode

Watch video here

Paul Merriman sits down with Larry Swedroe — author of 22 books and one of the most respected voices in evidence-based investing — for a conversation that covers everything from the five factors that actually matter to why Bitcoin might go to zero.

Larry explains why judging your investment decisions by their outcomes is one of the most dangerous mistakes you can make, lays out the academic criteria he uses to separate real factor premiums from data mining, and reveals that he's made only three tactical moves in 30 years of investing. He and Paul use three eye-opening slides to show why chasing recent winners almost guarantees you'll underperform.

They also dig into why growth stocks don't deliver the returns most people expect (hint: the growth rate is already in the price), why traditional index funds are "dumb traders" bleeding money to hedge funds, and how AI will make markets harder to beat — not easier.

The audience Q&A covers emerging markets, the updated "Larry Portfolio," crypto, private equity, and which fund families Larry actually trusts with his own money.

Part of the Spring Financial Education Series hosted by the Bainbridge Community Foundation in partnership with the Merriman Financial Education Foundation.

LINKS & RESOURCES:  

"Enrich Your Future" — Larry Swedroe  

"Your Complete Guide to Factor-Based Investing" — Larry Swedroe & Andrew Berkin  

"Your Complete Guide to a Successful and Secure Retirement" — Larry Swedroe  Larry Swedroe on Substack: https://larryswedroe.substack.com  

The Hidden Flaw in Style Index Funds

The Hidden Costs of Index Replication: What Every Investor Needs to Know About

Adverse Effects of Index Replication

Watch the video here.

Coming up in this series: Christine Benz (Morningstar), Mike Piper, and Bill Bernstein.

A special thanks to Professor Bunnell who teaches a  finance class at Bentley University.  He recommended his students tune into the interview.  I hope it motivated them to get a copy of Larry’s latest book. Enrich Your Future: The Keys to Successful Investing 1st Edition.   I would place a very large bet that it will make a huge difference in their financial future. By the way, to the best of my knowledge Bentley is the only university I know that requires a Personal Finance class to graduate.

Paul Merriman sits down with Mark Zoril, founder of PlanVision, in the first episode of a new series spotlighting affordable financial planning options for do-it-yourself investors.

Mark built PlanVision in 2012 around a simple premise: investing isn't as complicated as the financial services industry makes it seem, and technology makes it possible to deliver thoughtful, unbiased financial advice at a price almost anyone can afford.

In this episode you'll learn:

• What you get for $489 in the first year — including access to the eMoney financial planning platform and one-on-one advisor sessions
• How the $8/month ongoing subscription works, and when it makes sense to stay on vs. cancel
• Why PlanVision has no commissions, no affiliate links, no insurance sales, and no conflicts of interest
• How the firm handles complex situations: Roth conversions, Social Security timing, 529s, pension vs. lump sum, and tax planning (with a CPA on staff)
• What PlanVision will and won't do — no estate planning, no market timing, no gold hedging strategies
• How they serve expats in over 180 countries
• What happens when a client passes away and a surviving spouse needs guidance
• Mark's own investing philosophy — and why he puts his own money in a Vanguard target date fund
• How PlanVision works with clients who follow Paul Merriman’s, Rick Ferri's, Larry Swedroe's, or any other multi-equity asset class  indexing philosophy

Links mentioned:

• PlanVision website
• PlanVision testimonials
• Rob Berger interview with Mark Zoril (expat investing, 60+ min)
• Stan the Annuity Man
• Bogleheads PlanVision comments

Watch the full video on YouTube

At 82 years old, I still work. Not because I have to, but because I want to.

I joined Brian Herriot and Kirby Denison on “The Time Freedom Podcast” to talk about exactly that. But we ended up covering a lot more than I expected.

Here's something that might surprise you: I managed money for thousands of people over 30 years and built a firm to $1.6 billion under management. And I have never once managed my own money.

Why? Because I know myself too well. When the market drops, I would second-guess everything. I'd probably hesitate to put more money in, even though that's exactly what I teach people to do. So I let someone else handle it. I don't even check how I did last year.

We also got into my disagreement with John Bogle. I had the privilege of sitting with him for about 90 minutes earlier in my career. Bogle preached Enough and it's even the title of one of his books.

I respectfully disagree. I believe the goal should be more than enough. Because life gets in the way. Bad things happen. And they often happen during retirement, when you have the least ability to recover. If you stop working the moment you have just enough, you're one bad year away from trouble.

📚🎧 Brian's book Time Freedom is available for pre-order! Pre-order and get the audiobook free... instant access today, paper copy in September. Normally that takes three copies, but for my listeners, just one.

timefreedombook.com | code: PAUL

Q&A Highlights

1. How does a 4-fund portfolio compare to a 10-fund portfolio?
   
2. What is the best way to invest for a child’s future?
   
3. Is it too late to use a diversified strategy like the 10-fund portfolio at age 50?
   
4. Can I create and test my own custom portfolio using your tools?
   
5. How should I invest during periods of inflation or uncertainty?
   
6. What are some recommended fund options available at Schwab?
   
7. Is a portfolio combining large-cap value and small-cap blend a good approach?
   
8. Are there good alternatives to intermediate-term bonds?
   
9. Who are some trustworthy voices in personal finance and investing?
   
10. What is your opinion on separately managed accounts (SMAs)?
    

Key Takeaway

Long-term investment success is driven by asset allocation, discipline, and consistency—not complexity. A simple, well-structured portfolio that you can maintain through market cycles is often the most effective approach.

Listen to the individual questions here.

Paul Merriman is dedicated to helping do-it-yourself investors build portfolios they can stick with for life. In this episode, he shares what he believes is the closest thing to a perfect long-term equity strategy he's ever seen.

Paul traces the evolution of index investing — from John Bogle's cap-weighted S&P 500 funds to the academic research of Fama and French, whose factor-based work showed that small cap value, large cap value, and other equity asset classes have historically outperformed the broad market over time.

For years, the best factor-based funds from Dimensional Fund Advisors (DFA) were only available through select advisors. That changed when Avantis launched its ETF lineup in 2019, followed by DFA's own ETFs — putting institutional-quality, factor-based investing within reach of every self-directed investor.

Paul introduces a recommended ETF list spanning 10 equity asset classes across both fund families, explains the key differences between DFA and Avantis, and makes the case for owning both. He also covers where to buy them and why Fidelity's fractional shares make it easy to start with any dollar amount.

Key topics: Factor-based vs. traditional index funds · Accessing DFA and Avantis ETFs · The case for owning both · Simplifying rebalancing with M1 Finance

The Q&A Paul references was recorded separately.

In this episode, we explore how flexible (variable) withdrawal strategies can strengthen your retirement plan—and why fixed, inflation-adjusted withdrawals may increase risk over time.

Using detailed distribution tables—including Table F1.3 (flexible withdrawals) and comparisons to

 Table D1.3 (fixed withdrawals)—Paul walks through real historical outcomes across decades to show how adjusting withdrawals based on market performance can improve long-term results.

You’ll learn:

• Fixed vs. flexible withdrawal strategies

• Insights from Tables F1.3, F1.4 vs. D1.3, D1.4

• How flexibility helps defend against bear markets

• The role of diversification and low-cost investing

• Why oversaving creates powerful financial freedom

If you’re planning for retirement or already taking withdrawals, this episode may offer a smarter, more adaptable approach to generating income.

Watch Youtube

Boot Camp 7 page