12 Q&A from San Diego AAII

On May 9, 2020 Chris Pedersen and Paul Merriman addressed the San Diego American Association of Individual Investors (AAII) via Zoom. Chris, director of research, presented “2 Funds for Life” and Paul, founder and president of The Merriman Financial Education Foundation, presented “The Ultimate Buy and Hold Strategy.” After the presentations …

On May 9, 2020 Chris Pedersen and Paul Merriman addressed the San Diego American Association of Individual Investors (AAII) via Zoom. Chris, director of research, presented “2 Funds for Life” and Paul, founder and president of The Merriman Financial Education Foundation, presented “The Ultimate Buy and Hold Strategy.” After the presentations Daryl Bahls, director of analytics, joined Chris and Paul to respond to questions. Daryl also prepared Tables for the Q&A. When the meeting concluded there were a number of unanswered questions submitted by the attendees. The following are 12 of the 24 questions. The remaining 12 will be answered in a future podcast. Watch the video here- https://www.youtube.com/watch?v=rk3uMwD1Okc

How do long term returns for small and large cap growth indexes compare to long term returns for small and large cap value indexes? 1:10

 How do required minimum distributions fit into your distribution tables? 6:15

 Am I right in assuming the 4 Fund Comboand Ultimate Buy and Hold strategies can be used at any age? 7:46

 How does an investor put together a portfolio when their 401k does not have all of your recommended asset classes in either the 4 Fund Comboor the Ultimate Buy and Hold strategies? 15:12

 I would like to move to the Ultimate Buy and Hold strategy.  Should I sell everything and just start over or dollar cost average over time? 20:40

I want to use the 2 Funds for Lifestrategy but I’m 62 and not sure it will have much impact. What do you suggest?  See the article, “Making The Most of Your Target Date Funds Before and During in Retirement”. 24:00

 Instead of a Vanguard target date fund, what about building a portfolio of individual ETFs representing the Total U.S. Stock Index, international stock index, international and U.S. bond indexes?  See a new study from Wharton,Target Date Funds and Portfolio Choice in 401(k) Plans 29:50

 What are your thoughts on an all-value portfolio that is 1/3 each large-cap value, small-cap value and international value asset classes? 38:00

 Is there any magic in the way you have built up the 10 and 4 fund strategies? 40:25

 Do you have any studies that assume taking a higher rate than the safe 4% distribution to allow me to delay drawing Social Security so I can maximize my Social Security payments? See Table. 44:05

 What asset classes do you recommend for the bond portion of your portfolio?  The Vanguard Portfolios show the bond funds we recommended. See: Vanguard mutual fundsand Vanguard ETF portfolios. 51:02

 With bond returns so low, has that altered your thinking on the percentage of the portfolio devoted to bonds? 54:49