Sound Investing

In Boot Camp #6, Paul Merriman walks through real historical data starting in 1970 to test what happens when retirees withdraw 3%, 4%, or 5% from a $1 million portfolio — adjusted for inflation — across some of the toughest market conditions in history.

This episode covers:

• The difference between retiring with “enough” and “more than enough”

• How inflation quietly turns $30,000 into $130,000+ over 30 years

• What happens if you retire into a bear market

• Why 1% more in withdrawals can cost millions

• S&P 500 vs. a globally diversified four-fund strategy

• How diversification impacts lifetime income and legacy outcomes

• The real risk of sequence of returns in retirement

• Why some portfolios ran out of money — and others didn’t

You’ll hear side-by-side comparisons of:

• 100% S&P 500 portfolios

• 40/60, 50/50, and 60/40 stock-bond mixes

• A worldwide four-fund equity strategy

• Fixed inflation-adjusted withdrawals over 30 years

The results may surprise you — especially when comparing 3%, 4%, and 5% withdrawal rates.

If you're approaching retirement, already retired, or helping someone make distribution decisions, this episode breaks down the numbers in plain English and shows how small choices can create million-dollar differences.

Next week: the strategy Paul considers the very best distribution method — for investors who retire with more than enough.

Watch Video Here

Catch up on the previous Boot Camp 2026 here

In Boot Camp #5 of 10, Paul delivers what he believes is the most important session in the series—especially for new and early investors (teens, 20s, 30s, and anyone just getting started).

Instead of treating investing like speculation, Paul reframes it as building—or buying—a business over decades.

Using clear, data-driven tables and “fine-tuning” comparisons, he walks through a simple, repeatable plan: start with $1,000 per year (about $83.33/month), increase contributions by 3% annually, and stay invested for 40+ years. You’ll see how long-term outcomes change based on asset allocation (100% stocks vs. 60/40 stocks and bonds), and why diversification can matter when markets go sideways.

Paul also compares an S&P 500-only approach with a globally diversified “worldwide four-fund” strategy (mixing U.S. and international, large and small, value and growth). Along the way, he explains the real power source in early investing: your contributions, not short-term market performance—and why tax-advantaged accounts like a Roth IRA or Roth 401(k) can dramatically increase the impact of compounding over a lifetime.

If you want a practical framework for long-term, low-cost, diversified investing, plus a clear-eyed discussion of volatility, sequence of returns, and retirement withdrawals (including the concept of a 5% annual withdrawal strategy), this episode lays the groundwork.

• Why Paul believes this is the most important boot camp session

• Investing as building a business (the “portfolio mortgage” analogy)

• Starting with $83/month and increasing contributions by 3% annually

• Understanding the fine-tuning tables and historical market returns

• S&P 500 vs. 60/40 portfolio: balancing growth and volatility

• The Worldwide Four-Fund Portfolio and the benefits of deeper diversification

• How sequence of returns impacts accumulation and withdrawals

• Why you rarely notice individual company failures inside diversified funds

• The long-term advantage of Roth IRA / Roth 401(k) compounding

• Staying disciplined through crashes, recessions, and sideways markets

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How much should you really have in stocks vs. bonds — and what happens when the market turns south with a vengence?

In Boot Camp #4, we break down the fine-tuning asset allocation tables that show exactly how different combinations of equities and bonds have performed from 1970 through 2025. This episode goes beyond average returns and dives into what investing actually feels like during the worst 3-month, 12-month, and 60-month market declines.

You’ll learn:

• Why equities have historically dominated bonds for long-term retirement investing

• How the S&P 500 compares to diversified strategies like the Four-Fund portfolio

• The real impact of worst-case drawdowns (including 50%+ bear markets)

• What happens to a 100% stock portfolio during retirement withdrawals

• How 50/50, 60/40, and other stock-bond allocations reduce volatility

• Why median returns matter — and why averages can mislead

• How to control risk through asset allocation, low costs, tax efficiency, and index investing

We explore real historical data — including the 1973-74 bear market, the 2000-2002 tech crash, and the 2008 financial crisis — to help you understand both accumulation and retirement distribution phases.

Whether you're in your 20s building wealth, in your 50s preparing for retirement, or already retired and managing withdrawals, this episode helps you align your portfolio with your risk tolerance, return needs, and long-term financial goals.

If you want to be a confident do-it-yourself investor — without paying a 1% management fee — this episode gives you the framework to make informed decisions about stocks, bonds, diversification, and risk control.

Watch Boot Camp #4 video

Welcome to Bootcamp #3 of the Sound Investing Series with Paul Merriman — where real investing data meets practical long-term strategy. 📈 In this session, Paul breaks down the performance of diversified portfolios vs. the S&P 500 using decades of historical data going back to 1970. You’ll learn how different combinations of equity asset classes have performed in good markets, bad markets, and everything in between.

📊 What You’ll Learn in This Video:
• A deep dive into the Sound Investing Portfolios and how they work for DIY investors
• Historical returns of 2-, 4- and multi-fund strategies compared to the S&P 500
• Why diversification matters and how it can reduce risk and improve returns
• How different portfolios performed in tough decades like the 1970s and 2000s
• Practical takeaways for long-term investors, retirees, and those choosing equity allocations

Whether you’re a beginner or experienced investor, this Bootcamp episode gives you real numbers and evidence-based insights to help shape your portfolio strategy with confidence. 

💡 Topics Covered:
✔ Sound Investing Portfolios explained
✔ Risk vs. return comparison
✔ Historical performance of diversified portfolios
✔ The role of small-cap & value stocks
✔ Why a 2-fund strategy can compete with the S&P 500
✔ How to think about risk in real market conditions

🔗 Useful Resources & Tables - https://www.paulmerriman.com/sound-investing-portfolios-2026
To follow along with the charts, tables, and data Paul references during the presentation, check the pinned links and video notes.

📈 Perfect For:
✔ DIY investors
✔ Retirement planners
✔ Anyone curious about portfolio diversification
✔ Investors who want to avoid common mistakes

📩 Questions? Paul encourages you to leave comments and reach out — he often uses viewer questions in future episodes!

➡️ Don’t forget to subscribe for more deep-dive investing education and future Bootcamp episodes from the Merriman Financial Education Foundation: Paul Merriman’s mission is to help you make more money with less risk and more peace of mind.

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.