Why Does Anyone Listen To Paul Merriman?

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crystalbank
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Re: Why Does Anyone Listen To Paul Merriman?

Post by crystalbank »

I listened to Paul's podcast and learned a lot from him. I don't strictly follow his portfolio advice but there's still a lot of wisdom from his decades long investing experience. He's also candid about his market timing failures and the effect of multiple divorces on his personal wealth.

Also, I don't know if his choice of AA (TDF + SCV) will underperform/overperform the market decades from now but it's far from terrible.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Sage16 »

Paul showed up at a Seattle Chapter Bogleheads lunch meeting before Covid started. Nice guy, we had a good discussion and I enjoyed listening to his views and logic. At the time he was suggesting a TDF with small cap value. Not the strategy I am looking for but I hope when we start to meet again he will become a regular, he brings a wealth of knowledge and diverse views to the group.
Bogle on investing: Diversify, focus on low costs, invest for the long term. Don't speculate and don't be distracted by volatility.
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Re: Why Does Anyone Listen To Paul Merriman?

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AlohaJoe
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Re: Why Does Anyone Listen To Paul Merriman?

Post by AlohaJoe »

Leesbro63 wrote: Thu Apr 15, 2021 8:59 am
AlohaJoe wrote: Thu Apr 15, 2021 12:53 am
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm Why do people still listen to this guy?
Because asset allocation is one of the least important things in investing for retirement and he talks about things other than asset allocation?
Asset allocation is one of the LEAST important things in investing in retirement?????
Yes. Bogleheads mostly have their financial act together, so they think asset allocation -- in the sense of "arguing over dozens of portfolio that are all reasonable" -- is one of the most important things out there. Go take a look at Reddit's personalfinance forum and tell me that asset allocation is something any of those posters should be worrying about.

https://www.reddit.com/r/personalfinance/

They generally have about 100 other problems they need to sort out for their retirement before asset allocation even comes into the picture.

But even in Boglehead-land, asset allocation is far, far, far outweighed by factors like savings rate and portfolio size effect and length of accumulation period and length of decumulation period and Social Security optimization and health insurance and withdrawal rate and withdrawal strategies. I'm retired and I've never met a single retiree in the real world who felt their retirement had been ruined because they picked one Boglehead-style portfolio over another. "Oh no, I picked Schulteis' Coffee House Portfolio and now I'm eating catfood!" Just doesn't happen.

There's a reason why White Coat Investor can write a blog post 150 Portfolios Better Than Yours because asset allocation just isn't that important once you've done the low-hanging fruit of broadly diversified and low-cost.

It'll be a long time before we actually have any idea what portfolios are "best". Check out “Optimal Versus Naive Diversification: How Inefficient is the 1/N Portfolio Strategy?” by DeMiguel, Garlappi, and Uppal in the 2009 The Review of Financial Studies. They compare 14 different asset allocation models against 7 different data sets and find that there's nothing that always works well. What's more you need a lot of data to have any confidence that your asset allocation is "right".
we find that for a portfolio with only 25 assets, the estimation window needed is more than 3000 months, and for a portfolio with 50 assets, it is more than 6000 months
3,000 months is 250 years of data, so we have a long way before we actually whether things like 3-fund or Coffee House or Coward's Portfolio are great or merely good. So all we can do is pick something not too terrible and stick with it.

Luckily, even a less-than-optimal asset allocation can be "saved" by working just 12-15 months extra (across a 100 lifespan) in most scenarios.
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Re: Why Does Anyone Listen To Paul Merriman?

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[quoted post removed by admin LadyGeek]

OK.
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CyclingDuo
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Re: Why Does Anyone Listen To Paul Merriman?

Post by CyclingDuo »

Sagefemme wrote: Thu Apr 15, 2021 9:32 am
CyclingDuo wrote: Thu Apr 15, 2021 8:58 am
Based on many previous threads such as this one, I began an experiment in the summer of 2018 with two 70/30 equity to bond allocation pies at M1 Finance for my own edification. One is the Vanguard Three Funder (same percentages of domestic vs. international as the Merriman) and the other is Merriman's Ultimate Buy and Hold.

CyclingDuo
This is off the thread topic but I'm wondering Cycling Duo how do you like M1? The screenshots you post look simple, effective, and visually appealing. Sounds like rebalancing is easy. Far cry from the *@%$! graphics one gets on the Charles Schwab site..........
M1 is easy to use, and certainly seems to be one of the companies that is getting it right for investing going into the future. I like that it is built and designed for the long term investor, not for trading. Full automation, easy rebalancing, and their CEO has a three pronged approach for the company's focus.

It might end up being like the Honda Element that was designed for the younger, "in" crowd, but ended up attracting more Baby Boomers which was not the demographic the marketing department had in mind at all. M1 might end up attracting more outside of the Millennial demographic (their target customer) than marketing intended. :mrgreen:

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tj
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Re: Why Does Anyone Listen To Paul Merriman?

Post by tj »

CyclingDuo wrote: Thu Apr 15, 2021 9:17 pm
Sagefemme wrote: Thu Apr 15, 2021 9:32 am
CyclingDuo wrote: Thu Apr 15, 2021 8:58 am
Based on many previous threads such as this one, I began an experiment in the summer of 2018 with two 70/30 equity to bond allocation pies at M1 Finance for my own edification. One is the Vanguard Three Funder (same percentages of domestic vs. international as the Merriman) and the other is Merriman's Ultimate Buy and Hold.

CyclingDuo
This is off the thread topic but I'm wondering Cycling Duo how do you like M1? The screenshots you post look simple, effective, and visually appealing. Sounds like rebalancing is easy. Far cry from the *@%$! graphics one gets on the Charles Schwab site..........
M1 is easy to use, and certainly seems to be one of the companies that is getting it right for investing going into the future. I like that it is built and designed for the long term investor, not for trading. Full automation, easy rebalancing, and their CEO has a three pronged approach for the company's focus.

It might end up being like the Honda Element that was designed for the younger, "in" crowd, but ended up attracting more Baby Boomers which was not the demographic the marketing department had in mind at all. M1 might end up attracting more outside of the Millennial demographic (their target customer) than marketing intended. :mrgreen:

CyclingDuo
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jason2459
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Re: Why Does Anyone Listen To Paul Merriman?

Post by jason2459 »

tj wrote: Thu Apr 15, 2021 9:18 pm
CyclingDuo wrote: Thu Apr 15, 2021 9:17 pm
Sagefemme wrote: Thu Apr 15, 2021 9:32 am
CyclingDuo wrote: Thu Apr 15, 2021 8:58 am
Based on many previous threads such as this one, I began an experiment in the summer of 2018 with two 70/30 equity to bond allocation pies at M1 Finance for my own edification. One is the Vanguard Three Funder (same percentages of domestic vs. international as the Merriman) and the other is Merriman's Ultimate Buy and Hold.

CyclingDuo
This is off the thread topic but I'm wondering Cycling Duo how do you like M1? The screenshots you post look simple, effective, and visually appealing. Sounds like rebalancing is easy. Far cry from the *@%$! graphics one gets on the Charles Schwab site..........
M1 is easy to use, and certainly seems to be one of the companies that is getting it right for investing going into the future. I like that it is built and designed for the long term investor, not for trading. Full automation, easy rebalancing, and their CEO has a three pronged approach for the company's focus.

It might end up being like the Honda Element that was designed for the younger, "in" crowd, but ended up attracting more Baby Boomers which was not the demographic the marketing department had in mind at all. M1 might end up attracting more outside of the Millennial demographic (their target customer) than marketing intended. :mrgreen:

CyclingDuo
Does the forced early morning trading window not bother you?
Doesn't bother me at all. It's not a Robinhood. I like M1 a lot.
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S_Track
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Re: Why Does Anyone Listen To Paul Merriman?

Post by S_Track »

JD2775 wrote: Thu Apr 15, 2021 9:45 am I really enjoyed the interview Rick Ferri did with him, and the interview that White Coat Investor did with him "vs" Rick Ferri. Seems like a really nice, knowledgeable guy. That said, I don't really follow his advice and stick to total market for simplicity purposes.
I agree, Ferri and Merriman on the Whitecoat Investor podcast was a good one for sure.
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jason2459
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Re: Why Does Anyone Listen To Paul Merriman?

Post by jason2459 »

S_Track wrote: Thu Apr 15, 2021 9:38 pm
JD2775 wrote: Thu Apr 15, 2021 9:45 am I really enjoyed the interview Rick Ferri did with him, and the interview that White Coat Investor did with him "vs" Rick Ferri. Seems like a really nice, knowledgeable guy. That said, I don't really follow his advice and stick to total market for simplicity purposes.
I agree, Ferri and Merriman on the Whitecoat Investor podcast was a good one for sure.
Same. Very much worth listening too. I really like all of Rick's podcasts and enjoyed having him on the other side being interviewed.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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nedsaid
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Re: Why Does Anyone Listen To Paul Merriman?

Post by nedsaid »

I am grateful to Paul for what he and his organization have taught me. I had the pleasure of attending two seminars led by Tom Cock, these seminars introduced me to the academic research, DFA, Small-Value tilting. True to their word, I got a free one hour consultation with one of their Financial Advisors over the phone. They even showed me how to create a portfolio using funds of my choice. They taught us how to execute their strategies using Vanguard, T. Rowe Price, Fidelity, and Schwab portfolios. The Merriman organization spent lots of effort and money for investor education. It was a great experience and I can't say enough good about them. Though I chose not to invest with them, I did apply the lessons they taught me.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Grt2bOutdoors »

First of all, investing is a marathon, a long term horizon, a 15 year look back is nothing, check back in thirty years. Second, he's not advocating for all small value, its just a tilt to small value and the amount of the tilt is dependent upon the investor's total equity allocation. Third, he's a nice guy. If you'd make a post asking that question here, why don't you reach out directly to Paul and ask him? Have you viewed his video's on YouTube, he freely shares his knowledge and experience and offers a view that is different than that of the "crowd". He's not forcing anyone to purchase or invest in his suggestions. His suggestions don't say "The Best Portfolio in the World" now do they? There is no "best", there are good and better, but best? Even your suggestion that the 3 Fund Portfolio is the "best" can be disproven if one did enough research and cherry picking of the best performing asset classes over the last 15 years.

Did I mention Paul is a nice guy? :) He responds to questions and he is paying it forward by teaching classes at a college in Washington state. How many 75+ year old retirees do you know spend their retirement teaching to educate others? You should check out his website and stop complaining. You don't like the portfolio he designed, great, we heard you, but no one is forcing you to implement it in your own portfolio.
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dabears17
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Re: Why Does Anyone Listen To Paul Merriman?

Post by dabears17 »

Grt2bOutdoors wrote: Thu Apr 15, 2021 10:00 pm First of all, investing is a marathon, a long term horizon, a 15 year look back is nothing, check back in thirty years. Second, he's not advocating for all small value, its just a tilt to small value and the amount of the tilt is dependent upon the investor's total equity allocation. Third, he's a nice guy. If you'd make a post asking that question here, why don't you reach out directly to Paul and ask him? Have you viewed his video's on YouTube, he freely shares his knowledge and experience and offers a view that is different than that of the "crowd". He's not forcing anyone to purchase or invest in his suggestions. His suggestions don't say "The Best Portfolio in the World" now do they? There is no "best", there are good and better, but best? Even your suggestion that the 3 Fund Portfolio is the "best" can be disproven if one did enough research and cherry picking of the best performing asset classes over the last 15 years.

Did I mention Paul is a nice guy? :) He responds to questions and he is paying it forward by teaching classes at a college in Washington state. How many 75+ year old retirees do you know spend their retirement teaching to educate others? You should check out his website and stop complaining. You don't like the portfolio he designed, great, we heard you, but no one is forcing you to implement it in your own portfolio.
+1 for all the education for free he does.... he even says people can give away PDF's of his latest book. Part of the TDF/SCV 2-fund portfolio is to keep things simple for younger investors. He's one of the good guys.

I have to add that he's a nice guy.

Listening to his podcast 2005-2008 got me to mostly get away from individual stocks. I saw him in person in 2007 and listened to him do the Silicon Valley AAII meeting last spring. I put half of my 401k into a UBH portfolio back in 2007/2008. Last spring he convinced me to put my new 401k contributions into TDF/SCV. My daughter's college savings is mostly a 3-fund portfolio. Late 2017 I shifted about 70pct my investments to a UBH portfolio. Late March last year I put about 20pct of my portfolio into SCV/VTI. I have about 5pct of my portfolio in a friends tech mutual fund.

Back in 2005-2008 I looked into both Rick Ferri and Merriman for investing and was impressed with both of them.... but was too cheap to pay the management fee.

PS- I do admit I listen to his podcast at bedtime on Thursdays and it lulls me to sleep 20-30 minutes into it.
Last edited by dabears17 on Thu Apr 15, 2021 11:32 pm, edited 1 time in total.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by mrspock »

JBTX wrote: Wed Apr 14, 2021 11:50 pm
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been getting its ass kicked since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
Why do people still listen to Bogle, when Bitcoin, Telsa, Gamestop and ARKK have blown the doors off of index funds recently?
Simple: Scale. Most investors can put all of their non-bond holdings into total market index funds — totaling millions of dollars and sleep like a babies. The same cannot be said of these other assets.

Secondly: Reproducibility. The total market strategy has worked for generations, through world wars and even a pandemic. I’m not interested in some asset which I’ll have to trade out of to find the new flavor of the day, incurring capital gains taxes every time I do.

The latter is critical, as when you combine simple indexing with compound interest... the effects are magical.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by CyclingDuo »

tj wrote: Thu Apr 15, 2021 9:18 pm
CyclingDuo wrote: Thu Apr 15, 2021 9:17 pm
Sagefemme wrote: Thu Apr 15, 2021 9:32 am
CyclingDuo wrote: Thu Apr 15, 2021 8:58 am
Based on many previous threads such as this one, I began an experiment in the summer of 2018 with two 70/30 equity to bond allocation pies at M1 Finance for my own edification. One is the Vanguard Three Funder (same percentages of domestic vs. international as the Merriman) and the other is Merriman's Ultimate Buy and Hold.

CyclingDuo
This is off the thread topic but I'm wondering Cycling Duo how do you like M1? The screenshots you post look simple, effective, and visually appealing. Sounds like rebalancing is easy. Far cry from the *@%$! graphics one gets on the Charles Schwab site..........
M1 is easy to use, and certainly seems to be one of the companies that is getting it right for investing going into the future. I like that it is built and designed for the long term investor, not for trading. Full automation, easy rebalancing, and their CEO has a three pronged approach for the company's focus.

It might end up being like the Honda Element that was designed for the younger, "in" crowd, but ended up attracting more Baby Boomers which was not the demographic the marketing department had in mind at all. M1 might end up attracting more outside of the Millennial demographic (their target customer) than marketing intended. :mrgreen:

CyclingDuo
Does the forced early morning trading window not bother you?
Nope.
"Save like a pessimist, invest like an optimist." - Morgan Housel
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Re: Why Does Anyone Listen To Paul Merriman?

Post by JBTX »

mrspock wrote: Thu Apr 15, 2021 11:30 pm
JBTX wrote: Wed Apr 14, 2021 11:50 pm
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been getting its ass kicked since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
Why do people still listen to Bogle, when Bitcoin, Telsa, Gamestop and ARKK have blown the doors off of index funds recently?
Simple: Scale. Most investors can put all of their non-bond holdings into total market index funds — totaling millions of dollars and sleep like a babies. The same cannot be said of these other assets.

Secondly: Reproducibility. The total market strategy has worked for generations, through world wars and even a pandemic. I’m not interested in some asset which I’ll have to trade out of to find the new flavor of the day, incurring capital gains taxes every time I do.

The latter is critical, as when you combine simple indexing with compound interest... the effects are magical.
Thanks. I was being sarcastic.
Orthodoc1.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Orthodoc1. »

Oh my goodness. I thought I was the only one. He seems so nice but he speaks so slowly and softly that I can't make it through a whole podcast. Lol.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by burritoLover »

Orthodoc1. wrote: Fri Apr 16, 2021 1:18 pm Oh my goodness. I thought I was the only one. He seems so nice but he speaks so slowly and softly that I can't make it through a whole podcast. Lol.
I play him at 1.5x or 2x - then he sounds normal.
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FIREGuy88
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Re: Why Does Anyone Listen To Paul Merriman?

Post by FIREGuy88 »

Yeesh, no Michael Scott fans huh? :P https://youtu.be/nhkNYjljbMs?t=12
Jags4186 wrote: Thu Apr 15, 2021 2:53 pm Paul has long been promoting a 4-Fund portfolio and a 2-Fund portfolio which will get very close to the performance of the UBH portfolio without all the fussing around for the individual investor.
This is helpful, thanks. It changes my perspective a lot. I've looked around quite a bit on his site and he doesn't seem to specifically list the funds he recommends for the 2-fund and 4-fund. And idea what they are?
whereskyle wrote: Thu Apr 15, 2021 3:05 pm Paul makes a good point. Total market index funds are dominated by megacap companies. Sure, they hold all the stocks, but 3000 of the stocks don't really have any effect on performance. Apple, Amazon and Facebook sure as heck do though. I am extremely happy with my 97% total market index portfolio, but I'm slowly building up a 20% mid/small tilt to diversify away from large cap growth and take a bit more risk while I'm young.
This is the best argument I've heard for this strategy so far. It makes sense to me. With that said, don't you also get exposure with a total market fund? As small caps grow, your total market fund shifts and accounts for this. You're not trying to guess what will happen next. Am I missing something?
alankirkendall wrote: Thu Apr 15, 2021 3:09 pm Any value strategy is simply a bet that over a long period (30 to 40 years) small and value will outperform. As UB&H involves 10 equity asset classes and rebalancing it will not interest those who want simplicity or don't want to bet on such long term trends.
For that reason, Paul advocates a simpler strategy of a Target Date Fund plus one small value fund. Hence the confusion as to whether he is advocating a 2 Fund or a 10 Fund strategy.
Got it, thank you for clarifying. What's the Vanguard small cap value fund he recommends?
Triple digit golfer wrote: Thu Apr 15, 2021 3:29 pm Since all the way back to 2015? My goodness, a 6 year period of underperformance?

Show me where Merriman has recommended this portfolio for a 6 year time frame.

This is designed to be a long-term portfolio. Think 30 years. I don't even follow Merriman and am a strong believer in the 3 fund portfolio, but your logic is nothing more than "it hasn't performed well lately." Clearly, then, you're not a good candidate for a Merriman portfolio and should join me in holding a 3 fund portfolio or target date fund.
This was a weird comment. Merriman has been flat vs the 3 fund portfolio since 2006, and losing to it since 2015. I only picked those numbers because that's how far back portfolio visualizer goes. Not sure why you're starting Internet arguments with someone you agree with, but okay.
DB2 wrote: Thu Apr 15, 2021 3:32 pm What kind of surprised me was how many 15-20 year periods where the S&P 500 was basically flat (and how many people would have only been able to own that fund alone if it existed at that time?). Adding even a bit of small cap value could have significantly helped a portfolio during those times.
Great point, this is very interesting.
palaheel wrote: Thu Apr 15, 2021 4:58 pm Why the fixation with 2015 and 2006?

Are you suggesting those periods are long enough to analyze investing strategy?

It's not hard to go back further. Merriman's site has data going back to 1970 (https://paulmerriman.com/wp-content/upl ... 0-2020.pdf). Have you looked at it? Merriman's table shows that since 1970, UBH has returned an annualized average of 12.1% versus 10.7% for the S&P 500.
You can't seriously be trying to convince me that 14 years of investment data is irrelevant.

I picked 2006 because that's the furthest portfolio visualizer goes back for those assets. The 3 fund portfolio isn't listed in that awful, un-useable chart that you linked to.
crystalbank wrote: Thu Apr 15, 2021 5:06 pm I listened to Paul's podcast and learned a lot from him. I don't strictly follow his portfolio advice but there's still a lot of wisdom from his decades long investing experience. He's also candid about his market timing failures and the effect of multiple divorces on his personal wealth.

Also, I don't know if his choice of AA (TDF + SCV) will underperform/overperform the market decades from now but it's far from terrible.
That's cool, I think everyone on this board took this as some personal attack on the guy. I'm attacking the strategy of a 10-fund UBH portfolio vs the 3-fund portfolio, not the guy's character.
Grt2bOutdoors wrote: Thu Apr 15, 2021 10:00 pm First of all, investing is a marathon, a long term horizon, a 15 year look back is nothing, check back in thirty years. Second, he's not advocating for all small value, its just a tilt to small value and the amount of the tilt is dependent upon the investor's total equity allocation. Third, he's a nice guy. If you'd make a post asking that question here, why don't you reach out directly to Paul and ask him? Have you viewed his video's on YouTube, he freely shares his knowledge and experience and offers a view that is different than that of the "crowd". He's not forcing anyone to purchase or invest in his suggestions. His suggestions don't say "The Best Portfolio in the World" now do they? There is no "best", there are good and better, but best? Even your suggestion that the 3 Fund Portfolio is the "best" can be disproven if one did enough research and cherry picking of the best performing asset classes over the last 15 years.

Did I mention Paul is a nice guy? :) He responds to questions and he is paying it forward by teaching classes at a college in Washington state. How many 75+ year old retirees do you know spend their retirement teaching to educate others? You should check out his website and stop complaining. You don't like the portfolio he designed, great, we heard you, but no one is forcing you to implement it in your own portfolio.
This isn't a good argument. You're just saying "yes the portfolio is underperforming, but check back in when it's not, and then you'll be wrong. Also, he's a nice guy."


Thanks Boglefam :)
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Re: Why Does Anyone Listen To Paul Merriman?

Post by dabears17 »

His 4 fund portfolio is discussed in this article:
https://paulmerriman.com/market-got-you ... portfolio/
https://paulmerriman.com/4-fund-combo-l ... endations/

The ETFs he recommends for it are VTI, RPV, IJR, SLYV

He's stopped updating it (I think to concentrate on the two funds for life), but for a long time he'd analyze 401k plans and recommend the best funds to use:
https://paulmerriman.com/find-your-companys-401k-plan/

Glancing through the articles, I don't see a specific fund recommendation, beyond 'Vanguard-like', I assume because he's recommending using the TDF and SCV fund that is available in your 401k.
https://paulmerriman.com/2-funds-for-life-q-a/
https://paulmerriman.com/2-funds-for-life/
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Re: Why Does Anyone Listen To Paul Merriman?

Post by BroIceCream »

dabears17 wrote: Fri Apr 16, 2021 5:01 pm ...
He's stopped updating it (I think to concentrate on the two funds for life), but for a long time he'd analyze 401k plans and recommend the best funds to use:
...
Glancing through the articles, I don't see a specific fund recommendation, beyond 'Vanguard-like', I assume because he's recommending using the TDF and SCV fund that is available in your 401k.
Whether you use his 2FL, 4-fund, or 10-fund, his ETF list, along with explainations on the preferences (and why they've recently changed) can be found at
paulmerriman.com/best-in-class-etfs-for-the-ultimate-buy-and-hold-2021
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Jags4186 »

FIREGuy88 wrote: Fri Apr 16, 2021 4:27 pm
Jags4186 wrote: Thu Apr 15, 2021 2:53 pm Paul has long been promoting a 4-Fund portfolio and a 2-Fund portfolio which will get very close to the performance of the UBH portfolio without all the fussing around for the individual investor.
This is helpful, thanks. It changes my perspective a lot. I've looked around quite a bit on his site and he doesn't seem to specifically list the funds he recommends for the 2-fund and 4-fund. And idea what they are?
He talks about two 4 - fund portfolios

All US including Large Cap Blend, Large Cap Value, Small Cap Blend, Small Cap Value
There is also a world wide version which is essentially US Large Cap, US Small Cap, Intl Large Cap, Intl Small Cap. 2 of the 4 should be “value” varieties and 2 of the 4 should be “blend” varieties

2-Funds portfolio includes a Target Date Fund appropriate for your retirement age and a US Small Cap Value fund.

Paul keeps a list of “Best in Class” ETFs. This is updated as new products come to market. https://paulmerriman.com/best-in-class- ... lios-2021/

For example, he used to recommend VOO Vanguard SP 500 fund for large cap blend. Then he changed that to VTI Vanguard Total Market, and now AVUS Avantis US Equity. In general, Merriman is trying to replicate the DFA equivalents for non-DFA clients.

What you have to keep in mind with Merriman is that the asset allocations has remained the same, he’s always trying to improve the performance by using new products in the market that can better achieve your goals. As is often noted, none of these ETFs are “pure”. Vanguards Small Cap Value has bigger stocks and is less deeply discounted than SLYV.
dharrythomas
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Re: Why Does Anyone Listen To Paul Merriman?

Post by dharrythomas »

I enjoy his podcast. I subscribe and listen to all of them. I also have a value tilt. It didn’t pay off in the 1990s, 2008, or recently, but it sure was nice during the tech crash.

Paul Merriman is a gentleman and he uses academic research. They do extensive historical research and provide free literature. He admits there there is some extra risk, but he is asking people to stretch for a little extra yield since over a 60 year investing career, an extra 1/2% per year can be life changing.

He also says that the behavioral part is the hard part. Historically it has worked over long timeframes, 40 years, to capture the over performance you’ve got to accept long periods of under performance. Unless of course, the world changes. He never undersells the risk of underperformance.

And best of all, he’s not selling anything. He’s doing this for free.

I was promoting 2 funds for life for to one of my kids. I gave both the pdf version of “12 Million Dollar Decisions”.
Leesbro63
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Leesbro63 »

Twenty-seven years ago, I read a Paul Merriman article about how grandparents can put $10,000 into a variable-annuity in a trust for grandkids that will be worth over $1M when the grandkid turns 65. I sort of tweaked that for our own family situation, but my now 31 and 27 year old adult children have a nice nest egg in those accounts. Paul is creative and has some good ideas.
burritoLover
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Re: Why Does Anyone Listen To Paul Merriman?

Post by burritoLover »

FIREGuy88 wrote: Fri Apr 16, 2021 4:27 pm You can't seriously be trying to convince me that 14 years of investment data is irrelevant.
Value strategies can easily underperform for that time period and longer. Then it explodes upwards in shorter time frames.

Image
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mrpotatoheadsays
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Re: Why Does Anyone Listen To Paul Merriman?

Post by mrpotatoheadsays »

FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been getting its ass kicked since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
Performance - 1990 to 2019 (CAGR)
------------------------------------------------------------
2-Fund (Bogleheads 3-Fund 70/30 [Equity-Only]): 8.8%
4-Fund World All Value (Merriman): 11.1%
4-Fund US (Merriman): 11.8%
2-Fund US All Value (Merriman): 12.3%

Performance - 1970 to 2019 (CAGR)
------------------------------------------------------------
S&P 500: 10.7%
Ultimate Buy and Hold (Merriman): 12.4%
4-Fund US (Merriman): 12.2%
4-Fund World All Value (Merriman): 12.4%
2-Fund World Small-Cap Value (Merriman): 14.2%

The Ultimate Buy and Hold portfolio produced a return similar to the 4-Fund World All Value. The 4-Fund World All Value is a simpler alternative to the Ultimate Buy and Hold, but it lacks its diversity.

The amount of bonds held in a portfolio is based on an individual's acceptance of risk; thus, only equity holdings are analyzed here.

Paul also has amazing research on fixed and flexible distributions in retirement.


References:
- American Association of Individual Investors 2020 Webinar Series, September 23, 2020, Which Is the Best 1-, 2-, 3- and 4-Fund Strategy?
- Paul Merriman, How to simplify the Ultimate Buy and Hold and Get Higher Returns
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Bluce
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Bluce »

I never heard of this guy til the past year or so, from being mentioned on this site.

I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
"There are no new ideas, only forgotten ones." -- Amity Shlaes
DB2
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Re: Why Does Anyone Listen To Paul Merriman?

Post by DB2 »

Bluce wrote: Sat Apr 17, 2021 3:06 pm I never heard of this guy til the past year or so, from being mentioned on this site.

I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
Paul has a lot of stuff on Youtube.
Dougroseville
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Dougroseville »

Bluce wrote: Sat Apr 17, 2021 3:06 pm I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
Here are a couple places where you can download his podcasts...
https://podcasts.apple.com/us/podcast/s ... 1464038604
https://www.podbean.com/podcast-detail/ ... ng-Podcast

I listen to many podcast and enjoy Paul's stuff a lot..
If you are a serious podcast listener, I think there are much better podcast apps than the standard Apple one. I currently am very happy with Overcast (free version) - I subscribe to many (more than 40) podcasts, then I curate the downloaded ones to different Playlists (like "Listen", "Bedtime", etc.) and I may delete or ignore some episodes (not Paul's) if they don't look of interest to me.
gideon trumpet
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Re: Why Does Anyone Listen To Paul Merriman?

Post by gideon trumpet »

As others have mentioned, six years is nowhere near long enough to evaluate a long-term portfolio strategy. I don't personally invest in one of Merriman's model portfolios but his experience and knowledge as an investor have more than earned him the right to be listened to. If Merriman came out and said he no longer believed in small-cap value, we would all be wise to listen. (And we would all be wise to immediately invest in small-cap value.)
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Bluce
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Bluce »

Dougroseville wrote: Sat Apr 17, 2021 5:10 pm
Bluce wrote: Sat Apr 17, 2021 3:06 pm I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
Here are a couple places where you can download his podcasts...
https://podcasts.apple.com/us/podcast/s ... 1464038604
https://www.podbean.com/podcast-detail/ ... ng-Podcast

I listen to many podcast and enjoy Paul's stuff a lot..
If you are a serious podcast listener, I think there are much better podcast apps than the standard Apple one. I currently am very happy with Overcast (free version) - I subscribe to many (more than 40) podcasts, then I curate the downloaded ones to different Playlists (like "Listen", "Bedtime", etc.) and I may delete or ignore some episodes (not Paul's) if they don't look of interest to me.
Ah yes, the Podbean --> download.

That's what I was looking for -- thanks. I DL one or two per day, but not financial stuff.
"There are no new ideas, only forgotten ones." -- Amity Shlaes
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jason2459
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Re: Why Does Anyone Listen To Paul Merriman?

Post by jason2459 »

Bluce wrote: Sat Apr 17, 2021 8:01 pm
Dougroseville wrote: Sat Apr 17, 2021 5:10 pm
Bluce wrote: Sat Apr 17, 2021 3:06 pm I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
Here are a couple places where you can download his podcasts...
https://podcasts.apple.com/us/podcast/s ... 1464038604
https://www.podbean.com/podcast-detail/ ... ng-Podcast

I listen to many podcast and enjoy Paul's stuff a lot..
If you are a serious podcast listener, I think there are much better podcast apps than the standard Apple one. I currently am very happy with Overcast (free version) - I subscribe to many (more than 40) podcasts, then I curate the downloaded ones to different Playlists (like "Listen", "Bedtime", etc.) and I may delete or ignore some episodes (not Paul's) if they don't look of interest to me.
Ah yes, the Podbean --> download.

That's what I was looking for -- thanks. I DL one or two per day, but not financial stuff.
This one would be worth it too.

Bogleheads On Investing Podcast on Podbean https://www.podbean.com/pa/pbblog-aihas-34a527
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: Why Does Anyone Listen To Paul Merriman?

Post by kelway »

FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been getting its ass kicked since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
I listen to him because he's honest. Did the 3-fund beat the doors off of a small value strategy so far this year? No it didn't, so I guess he's brilliant.
bck63
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Re: Why Does Anyone Listen To Paul Merriman?

Post by bck63 »

I enjoy his podcast. I like the music at the beginning.

He seems like a decent fellow who is trying to help people.
absolute zero
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Re: Why Does Anyone Listen To Paul Merriman?

Post by absolute zero »

At one point last year as I was searching for new avenues to increase my understanding of factor investing, I figured I’d listen to Paul Merriman. I tried listening to an interview by WCI where Jim was asking questions to both Paul Merriman and Rick Ferri. Jim asked Paul, “What do you think is the most important factor besides small or value?” And Paul appeared to be unable to answer the question. He said something like “you know, I’ve got a really sharp guy that works for me, he’s an expert on this stuff. Let me get him to write you up an answer and I’ll send it to you later.”

I appreciate it when someone acknowledges that a question is outside of the realm of their expertise, but seriously? If someone is constantly encouraging small cap value and teaching others to invest in SCV funds, they ought to be able to answer a softball question like that one. I haven’t listened to any of Paul’s podcasts or interviews since.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Bluce »

Bluce wrote: Sat Apr 17, 2021 8:01 pm
Dougroseville wrote: Sat Apr 17, 2021 5:10 pm
Bluce wrote: Sat Apr 17, 2021 3:06 pm I thought I might try a listen, but no matter the source I've gone to there doesn't seem to be any way of downloading his podcasts. Plenty of places to listen, but not download. :?: Am I missing something?
Here are a couple places where you can download his podcasts...
https://podcasts.apple.com/us/podcast/s ... 1464038604
https://www.podbean.com/podcast-detail/ ... ng-Podcast

I listen to many podcast and enjoy Paul's stuff a lot..
If you are a serious podcast listener, I think there are much better podcast apps than the standard Apple one. I currently am very happy with Overcast (free version) - I subscribe to many (more than 40) podcasts, then I curate the downloaded ones to different Playlists (like "Listen", "Bedtime", etc.) and I may delete or ignore some episodes (not Paul's) if they don't look of interest to me.
Ah yes, the Podbean --> download.

That's what I was looking for -- thanks. I DL one or two per day, but not financial stuff.
The most current one is from March 3?
"There are no new ideas, only forgotten ones." -- Amity Shlaes
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Bluce
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Bluce »

absolute zero wrote: Sun Apr 18, 2021 9:09 am At one point last year as I was searching for new avenues to increase my understanding of factor investing, I figured I’d listen to Paul Merriman. I tried listening to an interview by WCI where Jim was asking questions to both Paul Merriman and Rick Ferri. Jim asked Paul, “What do you think is the most important factor besides small or value?” And Paul appeared to be unable to answer the question. He said something like “you know, I’ve got a really sharp guy that works for me, he’s an expert on this stuff. Let me get him to write you up an answer and I’ll send it to you later.”

I appreciate it when someone acknowledges that a question is outside of the realm of their expertise, but seriously? If someone is constantly encouraging small cap value and teaching others to invest in SCV funds, they ought to be able to answer a softball question like that one. I haven’t listened to any of Paul’s podcasts or interviews since.
Yes. I don't pay any attention to what gurus are saying either. I just hold the total market (SWTSX) and let it run. Small cap, large cap, dividend stocks, low volatility -- they're all in there and if you invest for the long term just buy and hold a total index. If you want to speculate, jump in and out, buy what's "hot," then I cannot help.

You may get a jump for a few years by overweighting one of the sectors (on the advice of a guru) then, more than likely, you will follow it down when its day in the sun is over and will miss the the gains of the rest of the market as it rises sharply -- which none of the gurus (that YOU follow) will have predicted. Others will have, of course.

YMMV, but it's worked for me. I started in 1990, as a completely clueless investor, with $2,500 and now my biggest headache, as I approach 71, is who to leave it all to? I can live off the gains and will likely never spend any of it down.

SIDEBAR: My best friend's son (42) has been investing in "hot" mostly penny stocks for over 10 years. I have gently persuaded him to buy an index and forget all that other stuff.

So he did finally buy Schwab's SWTSX a few years ago for some portion of his portfolio but still has some single stocks. I told him after every 6 months, 12 months, whatever, compare each stock you've held to the index and see how often you beat it -- and compare the volatility too. He has finally admitted to me how tough it is to do.
"There are no new ideas, only forgotten ones." -- Amity Shlaes
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FIREGuy88
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Re: Why Does Anyone Listen To Paul Merriman?

Post by FIREGuy88 »

absolute zero wrote: Sun Apr 18, 2021 9:09 am Jim asked Paul, “What do you think is the most important factor besides small or value?” And Paul appeared to be unable to answer the question. He said something like “you know, I’ve got a really sharp guy that works for me, he’s an expert on this stuff. Let me get him to write you up an answer and I’ll send it to you later.”

If someone is constantly encouraging small cap value and teaching others to invest in SCV funds, they ought to be able to answer a softball question like that one.
🤔
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DWesterb2iz2
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Re: Why Does Anyone Listen To Paul Merriman?

Post by DWesterb2iz2 »

Leesbro63 wrote: Sat Apr 17, 2021 7:34 am Twenty-seven years ago, I read a Paul Merriman article about how grandparents can put $10,000 into a variable-annuity in a trust for grandkids that will be worth over $1M when the grandkid turns 65. I sort of tweaked that for our own family situation, but my now 31 and 27 year old adult children have a nice nest egg in those accounts. Paul is creative and has some good ideas.
Great that you did this. I have been interested for years that PM set these trusts up. And wondered about it, both the economics of it and the ramifications for all involved. Good for you.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Call_Me_Op »

FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been getting its ass kicked since 2015.
Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
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FIREGuy88
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Re: Why Does Anyone Listen To Paul Merriman?

Post by FIREGuy88 »

Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
YRT70
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Re: Why Does Anyone Listen To Paul Merriman?

Post by YRT70 »

FIREGuy88 wrote: Tue May 04, 2021 12:22 pm
Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
It hasn't done much in the US but Merriman recommends international diversification. Here's a standard world portfolio vs. Merriman's all small cap value portfolio.

https://www.portfoliovisualizer.com/bac ... tion5_2=20
Last edited by YRT70 on Tue May 04, 2021 12:40 pm, edited 1 time in total.
index245
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Re: Why Does Anyone Listen To Paul Merriman?

Post by index245 »

FIREGuy88 wrote: Tue May 04, 2021 12:22 pm
Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
$100,000 invested in January 1999 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $567,767

Vanguard Small Cap Value Index (VISVX, investor class): $848,288

CAGR: 8.09% vs 10.05%
whereskyle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by whereskyle »

index245 wrote: Tue May 04, 2021 12:38 pm
FIREGuy88 wrote: Tue May 04, 2021 12:22 pm
Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
$100,000 invested in January 1999 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $567,767

Vanguard Small Cap Value Index (VISVX, investor class): $848,288

CAGR: 8.09% vs 10.05%
Start the backtest at 2002 or 2003 and you'll see nearly two full decades of no premium. I'm not anti-SCV or anything. We should just be open about the absence of a premium for a very long time period.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Stubbie
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Stubbie »

Paul is a guy who made a LOT of money as a financial advisor. He built a company from scratch holding seminars teaching people how to invest in mutual funds. If they didn't want to do it on their own, they could choose to use his firm. Most ended up using Merriman Wealth Management. He also makes no bones about his belief in market timing but he doesn't promote it.
When he sold his company he got a HUGE payday. He has chosen to spend his retirement years continuing to educate the average person on many aspects of financial literacy. This is his passion. He has established a foundation to fund his efforts. He provides the vast majority of the funding to the foundation himself. Much of his retirement accounts will go to the foundation when he dies to continue his mission.
We all have to have something that gives our lives meaning at various stages in our lives. This is Paul's. He will not appeal to all people. Is he sincere in wanting to make a positive contribution to society? I firmly believe so. We should all be so fortunate to have found our passion at that stage of our lives.
index245
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Re: Why Does Anyone Listen To Paul Merriman?

Post by index245 »

whereskyle wrote: Tue May 04, 2021 12:57 pm
index245 wrote: Tue May 04, 2021 12:38 pm
FIREGuy88 wrote: Tue May 04, 2021 12:22 pm
Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
$100,000 invested in January 1999 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $567,767

Vanguard Small Cap Value Index (VISVX, investor class): $848,288

CAGR: 8.09% vs 10.05%
Start the backtest at 2002 or 2003 and you'll see nearly two full decades of no premium. I'm not anti-SCV or anything. We should just be open about the absence of a premium for a very long time period.
Nearly two decades of no premium is not the same as two decades. Over full two decade periods, US small cap value has beaten US total market in every single one. Will this continue? Who knows, but it isn't crazy talk to consider a small value tilt. It isn't for everyone, if it bothers you to trail the S&P500 sometimes, but over longer timeframes it has proven to be successful.

$100,000 invested in April 2001 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $512,794

Vanguard Small Cap Value Index (VISVX, investor class): $673,455
bogledogle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by bogledogle »

I like the guy. He is not selling anything or trying to rip you off. He does not even pretend to know it all - shows you data, gives you his perspective, makes good arguments and gets all excited about long term investing. Diversity of information and thought is important, specially when it is data driven.
whereskyle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by whereskyle »

index245 wrote: Tue May 04, 2021 1:19 pm
whereskyle wrote: Tue May 04, 2021 12:57 pm
index245 wrote: Tue May 04, 2021 12:38 pm
FIREGuy88 wrote: Tue May 04, 2021 12:22 pm
Call_Me_Op wrote: Fri Apr 23, 2021 7:31 am Do you always judge investing strategies based upon 5 years of data? This is a big mistake, IMO.
Fair enough. It doesn't look like the value tilt is doing particularly well in the last 20 years either, but potato potato.
$100,000 invested in January 1999 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $567,767

Vanguard Small Cap Value Index (VISVX, investor class): $848,288

CAGR: 8.09% vs 10.05%
Start the backtest at 2002 or 2003 and you'll see nearly two full decades of no premium. I'm not anti-SCV or anything. We should just be open about the absence of a premium for a very long time period.
Nearly two decades of no premium is not the same as two decades. Over full two decade periods, US small cap value has beaten US total market in every single one. Will this continue? Who knows, but it isn't crazy talk to consider a small value tilt. It isn't for everyone, if it bothers you to trail the S&P500 sometimes, but over longer timeframes it has proven to be successful.

$100,000 invested in April 2001 through April 2021 (includes reinvestment of dividends):

Vanguard Total Stock Market Index (VTSMX, investor class): $512,794

Vanguard Small Cap Value Index (VISVX, investor class): $673,455
Again, I'm not trying to be dismissive, but anyone thinking about starting a SCV tilt should know that if they started investing in scv in

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 or
2020

they would currently have less money than if they had just invested in a total market fund.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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vineviz
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Re: Why Does Anyone Listen To Paul Merriman?

Post by vineviz »

whereskyle wrote: Tue May 04, 2021 1:53 pm Again, I'm not trying to be dismissive, but anyone thinking about starting a SCV tilt should know that if they started investing in scv in

;;;;;

they would currently have less money than if they had just invested in a total market fund.
A) That is dismissive.

B) That's some next-level rearview mirror driving.

C) It's partly incorrect (anyone initiating a tilt before September 2003 or after August 2019 has come out ahead)
Last edited by vineviz on Tue May 04, 2021 2:13 pm, edited 1 time in total.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by iamlucky13 »

FIREGuy88 wrote: Thu Apr 15, 2021 2:18 pm
Metsfan91 wrote: Wed Apr 14, 2021 11:13 pm When you listen to Mr. Merriman, what do you hear? Is he promoting Ultimate Buy and Hold for new investors? Or, is he recommending Target Date Fund with a small value tilt?
Is he? On Portfolio Visualizer, they list his strategy as 11 different funds with differing allocations: https://www.portfoliovisualizer.com/backtest-portfolio

https://i.imgur.com/rEV8xvY.png

This looks like the opposite of a simple Vanguard TDF.

Which is it? If he's promoting a TDF, then I take it back. But that's not at all what I'm seeing or hearing.
Portfolio Visualizer only shows his ultimate buy and hold portfolio. It is hardly a thorough summary of his advice.

I don't follow him regularly, but I did read his "First Time Investor" book when I started getting serious about understanding mutual fund investing, and I've used some of the tables on his site to help inform my allocation decisions.

His basic approach is in line with Bogleheads principles - emphasizing the need to buy and hold a diversified portfolio of stocks and bonds for the long term, and keep expenses low. He did promote target date funds in the book as one option, and he has several articles on his site discussing them as well. For example Why young investors should fall in love with target-date funds

Starting from that foundation, he then makes a case for his ultimate buy and hold portfolio as a further refined option. As far as I see it, this basically parallels the small/value tilt strategies that some Bogleheads like, and that are regularly debated in this forum. I have not adopted this strategy, but it does intrigue me, so I follow some of the debates here.

Anyways, looking at the current output of the Portfolio Visualize backtest compared to the Bogleheads 3-fund, it seems their preset for the Ultimate Buy and Hold is returning a non-trivial amount less than the Bogleheads 3-fund, but also with lower standard deviation.

Looking at that closer, I realized they used Merriman's 60:40 allocation portfolio, while for 3-fund, they used an 80:20 allocation. Adjusting the 3-Fund 50 US + 30 International + 20 Total Bond proportionately to 38+22+40 brings them a lot closer, although still slightly favoring the 3-Fund.

Since this comparison is limited to 2006-2021 due to some of the funds only being around that long, I made a couple substitutions with equivalent older funds (VIVAX for EFV and VFITX for VIPSX). I didn't spend a lot of time looking for older funds, but even just extending the start date to 1999 pushed the Ultimate B&H well above the 3-Fund returns and showed a better Sharpe ratio.

So time frame matters a lot. Of course, this could be viewed as cherry picking on my part. In his book, Merriman examined the much longer term history of each asset class and used this as the basis for his Ultimate buy and hold portfolio.

As far as I see it, and this gets echoed in the small and value tilt discussions here, a big part of what you overlooked is how dominant US large growth stocks have been over the last 5+ years.

The question is whether this is a permanent change (or a reversion to a mean that was less obvious than small / value proponents thought), or if the current trend will revert.

My view is most investors should stick to simplicity - target date or 3-fund, for example. Those who want to try a small + value tilt and do a little extra rebalancing can use Merriman's Ultimate buy and hold as one model for the strategy.
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