Paul Merriman

The large majority of people do not consult with a professional advisor about their retirement needs. Of course, retirement planning is not just about investing, but investing intelligently is what will make a secure retirement possible. About twice as many people who work with advisors feel secure about their financial future, compared to those who have not had professional advice. Paul makes the case that the biggest problem for do-it-yourselfers is they care too much about their investments. He believes good professional advice is a life changer for most people.  

  This is the second of the two-part series on comparing the Vanguard Value Index Fund to actively- and passively-managed funds. Paul compares the Vanguard Value Index to the Dimensional Large Cap Value Fund. The reasons why the Dimensional fund performed so well had nothing to do with luck.  Once investors understands why the Dimensional fund earns over !% more per year, they qualify as savvy investors, unlikely to be sucked into the hype of Wall Street.  

    This podcast could be titled "fighting for the last half percent" or "Vanguard active vs. Vanguard passive." It compares three Vanguard Value funds, including the very famous Windsor Fund. Paul shows how and why, over the long term, the index funds wear down the competition. He discusses the seldom mentioned after-tax returns of funds, and why Vanguard continues to offer funds that are not likely to beat the indexs. This podcast is followed by a comparison of the Vanguard Value Index Fund and the Dimensional Large Cap Value Fund.   

  Just because an advisor is non-commission – hourly or fee-only – does not mean they are operating in your best interest. Paul shares a story of how a trusting investor can be misguided, manipulated, and given horrible advice, and when her advisor thought she might be found out, she turn up the sales pitch to another misleading level.  It's a vivid lesson in the high cost of not educating yourself about your own money.     

Paul sheds light on how different types of brokers are paid. Understand this, and you are likely to make the best choices for your financial future and work with a broker who truly operates in your best interest… not in the interest of himself and his firm. This can make a huge difference to your retirement!  

Paul discusses the history of the S&P 500, bull and bear markets, and evidence to help you consider your investment portfolio, personal situation and emotional responses to today's market. Don't forget to download your FREE COPY of the eBook, "101 Investment Decisions Guaranteed To Change Your Financial Future" at www.PaulMerriman.com.  

  With the market hitting new market highs, what should investors be doing? Emotional times in the market can help investors do very smart – or very costly – things for the long term. This podcast intends to help investors do the smart thing!    

Continued from last week's podcast (Part I), Paul expands on his MarketWatch articles, giving you insights into the essentials of investing. He discusses such topics as: When do you have enough to retire? Not taking risk beyond what is necessary. The worst performance of any strategy is in the future. How to plan for the worst-case scenarios. Why investment decisions should always be based on probabilities, not possibilities. Asset Allocation and knowing what is a perfect fit for you. Working with brokers or other advisors to get the information you need and realize the best returns on your investment.

Paul's MarketWatch articles, by the same name, are expanded upon in this podcast. Listen to the first five of 10 essential points every investor should consider. Paul's insights include: Why it is important to remember there is no risk in the past? Why is diversification the only free lunch? Why should  Investors never take a risk for which there is not an expected premium? Why is it a "fool's game" to sort through good and bad news in determining where the market is likely to go? And, why should investors know their primary investment goal?

Due to earlier concerns about the risk of loss, many of you are facing the challenge of not having your money fully invested. How do you get back in? All at once? That is dangerous, as you might buy-in right at the top, before a huge decline. Or a little bit at a time?  That's dangerous, as the market can always go down after the "little bit at a time" is all invested. Is there a compromise? Paul suggests a solution that might work for nervous investors.

Paul discusses the returns of his all-equity and balanced Vanguard Portfolios for the 10 years ending December 31, 2012.These returns were at least 1% better (annually) than all Vanguard competitors. Paul wants to make sure that investors understand where those extra returns came from, and the probabilities they will be repeated in the future. While you can't buy the past, but you can stay the course of proven performance from broad diversification asset classes with limited risk. Paul believes that if you follow his recommendations, you will be able to say in the future, "I'm #1" – and if not number one, the best you are likely to be. This podcast was inspired by this week's article posted on MarketWatch.

    This podcast gives greater insight into Paul's MarketWatch.com article, A Simple Secret to Retirement Investing. Paul believes that almost all successful investing is based on being defensive, not offensive. He discusses 10 simple defensive steps that almost guarantee long-term investment success.

Recent headlines at morningstar.com herald their "Fund Managers of the Year for 2012". As is often the case, these managers are those richly rewarded for their past performance. We all know we can't buy the past, but it doesn't stop investors from hoping the past is prologue. Paul discusses the performance of the hottest of the funds, Virtus Emerging Markets Opportunities Fund. The good news is the fund made lots of money. The bad news is it was much riskier and more expensive than competing index funds. In fact, many of the index funds actually beat Virtus' short and long-term track record. As always, Paul tries to get investors to look behind the hype and focus on the numbers so as to act in your own best interest.  

Paul discusses the frightening forces that investors struggled with throughout 2012. While the "wall of worry" kept most investors on the sidelines, those willing to accept the risk were royally rewarded. After considering how the market did in 2012, Paul reviews the predictions he made over 10 years ago. Almost every one of his predictions came true, and odds are they will come true for the next 10 years as well. Listen in and send us your feedback!

Having recently created the Merriman Financial Education Foundation, Paul explains his plans for continuing to help you get the most out of your investments, with less risk and more peace of mind. In addition to his books, weekly column at Marketwatch.com, and many resources at www.PaulMerriman.com, the Foundation is funding development of a curriculum for non-business majors at Western Washington University, his alma mater. In his weekly podcasts, Paul plans to create various series: investment myths and realities, investment decision-making, 101 most commonly asked questions, and more. In return, he asks for your feedback and to share his work with your friends and family. To stay apprised of new topics, subscribe for free to Paul's bi-weekly newsletter at www.PaulMerriman.com