Your greatest Thanksgiving investments

“I want to thank you all the work you and your foundation do. I love how everything is data driven with statistics. As an engineer, it makes more sense to me when I see numbers and stats to back up your different styles of investing and allocating money.” – Mitul P. In This Edition Battling The Bear Truth Tellers Tom […]

The post Your greatest Thanksgiving investments appeared first on Paul Merriman.

“I want to thank you all the work you and your foundation do. I love how everything is data driven with statistics. As an engineer, it makes more sense to me when I see numbers and stats to back up your different styles of investing and allocating money.” – Mitul P.

In This Edition

Battling The Bear
Truth Tellers Tom Cock and Don McDonald
30 Ways to Make Another Million…Really!
Asset Classes: Taxable or Tax-Advantaged?
How To Be a Better DIY Investor
Getting Long-Term Bullish
Q&A with Chris Pedersen
Personal Stories

Dear Friends,

As you can see from the topics above, we’ve packed this newsletter with information and opportunities to get and keep you on course as sound and savvy investors. 

First, you will meet two of my long-time friends and colleagues, Tom Cock and Don McDonald, dedicated financial advisors and educators. You’ve probably heard of them through my involvement with the annual Retiremeet Conference they sponsor, or via the videos we’ve made together, my being a guest on their radio show/podcast “Talking Real Money,” or the velvet voice of Don who donated his excellent narration for our book, We’re Talking Millions. By the way, the audio version of the book is available both at Audible and free on our website.

In this edition, we feature them as Truth Tellers, those experts we deem ethical and reliable sources of information for investors, so you can learn more about what they do and use them as a resource if you see fit.

Also, I hope you’ll join Tom and me on Saturday, Nov. 5 for a live in-person or virtual presentation, about managing your money in these turbulent times. See information below.

Additionally, you’ll learn about “30 Ways to Make Another Million…Really!” as explained in this week’s MarketWatch article and podcast. You’ll find out how to gain access to a free chapter from Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement in the section, “Asset Classes: Taxable or Tax-Advantaged?” Truth Teller Ben Carlson makes a strong case for changing your focus to the long term. I share an idea for making you a better investor and Chris Pedersen answers a few of your questions.

Thanks for reading and sharing this newsletter, our website, our free books, joining us on our social media (links at bottom) and supporting our work as we move into our second decade offering “sound investing strategies for every stage of life.” 

 

Battling The Bear: How to Manage Your Money in Turbulent Times

Sign-up now: https://www.talkingrealmoney.com/classes

 

Truth Tellers Tom Cock and Don McDonald

Tom Cock and Don McDonald are experienced investment experts and committed financial educators who own a fee-only investment advisory firm. Vestory was founded in 2009 as an SEC Registered Investment Advisor offering investment management and financial planning services to individuals and companies.

Headquartered in Bellevue, WA, they have clients throughout the country. They co-host “Talking Real Money,” a radio show heard on KOMO Radio (Saturdays at Noon) and at TalkingRealMoney.com (as a podcast). They record several times a week and take listener questions. Further, they are both educators through their public outreach online and in-person on money and retirement matters. See classes.

Don and Tom are among only a few voices on the radio helping people work with money honestly, comprehensively, and effectively. They have worked and talked with some of the world’s brightest financial minds, such as John Bogle, Professors Kenneth French, Eugene Fama and other academics, along with a host of best-selling authors and columnists, like Ron Lieber, Mark Hulbert, Larry Swedroe, Chuck Jaffe and Dan Solin.

Tom Cock has worked in radio and television since the mid-1970’s including a lengthy stint as host of a regional PBS TV show, “Serious Money”. He has published a business journal, managed and owned radio stations, and co-hosted investing talk radio shows with both Don and me, Paul Merriman.

Don McDonald has been in the investing business for almost 30 years. Most of that time was spent helping people across the country better manage their money and investments on his nationally-syndicated talk radio program, “The Don McDonald Show.” And, he generously donated his time and voice talent to creating the audio version of We’re Talking Millions–12 Simple Ways to Supercharge Your Retirement, available at Audible and as a free download at our website.

Recently, Vestory merged with Apella Wealth, headquartered in Glastonbury, CT, because their philosophies are in synch. As Apella’s website proclaims, “We believe in putting our clients’ interests above our own. We are a fiduciary. We recognize that you are unique, deserve individual attention, and are not an algorithm to compute. Our experienced financial professionals are personally invested in preserving your capital, growing your wealth, and helping you to re-imagine your financial future. We are committed not just to saying the right things, but to actually doing the things we say.”

Tom and Don continue as partners and west coast regional directors. Learn more at “Talking Real Money.”

 

30 Ways to Make Another Million…Really!

The focus of most of the work we do at The Merriman Financial Education Foundation is to help investors put together portfolios that we believe will produce higher rates of return per unit of risk. In this “MarketWatch” article and podcast, we look at the math of making more money, as well as specific decisions that are likely to lead to better returns.  

The math portion of the podcast focuses on the impact of small increases in return, along with small increases in annual investments and a lifetime of accumulating, distributing and passing money to others.

Leaving the simple math, I use historical returns to compare hypothetical returns and the choices investors must make. Everyone of these choices is likely a million dollar decision:

Save vs. spendStart saving early vs. waitingSelecting stocks vs. bondsSelect a few vs. many companiesChoose the S&P vs. other equity asset classesChoose the S&P vs. combinations of equity asset classesAdd 10% more equityTaxable vs. tax-deferredTax-deferred vs. tax freeLoad vs. no-loadIndex funds vs. actively managed fundsBuy and hold vs. market timingTarget date funds vs. do it yourselfTarget date funds plus small cap valueGifting one million dollars with $365 vs. major gift at deathThe make or break decision of distributions

 

Asset Classes: Taxable or Tax-Advantaged?

One of the most important missions of our work is to help do-it-yourself investor make choices that others depend on professionals to make for them.  Our focus is to address the selection of asset classes that investors should consider in putting together their long-term investment portfolio.  

To help in the process we list many of the equity  asset classes that investors should consider for the long term.  Further we list the ETFs and mutual funds that should be considered to access those equity asset classes.  

One question that often arises is which asset classes should be in taxable accounts and which asset classes should be in tax-advantaged accounts.  While the quick answer is to put the least tax-efficient asset classes in the tax-advantaged accounts and most tax-efficient in taxable accounts, there are additional tax and expense considerations the DIY investor needs to know.  

Larry Swedroe (one of our go-to Truth Tellers) has done a terrific job discussing the question in his book, Your Complete Guide to a Successful & Secure Retirement. With the permission of Larry and the publisher, Harriman House, we have posted a link to Chapter 10, “The Asset Location Decision.”

I think the chapter will help you understand the asset location decision, and why I recommend this book to all Do-It-Yourself investors.

Click here for the free chapter. Click here to order the book via our Amazon affiliate link which, if you buy via our link, may result in our Foundation receiving a small commission at no additional cost to you.

 

Getting Long-Term Bullish

It’s difficult for investors who are focused on the short term.  It appears there are many reasons to be afraid and to think it is prudent to step aside and eliminate the risk of loss. As I said in a recent article, the struggle with staying the course during declining markets is likely the most difficult of all for those who claim to be buy and hold investors.

One of our Truth Tellers recognizes the difficult nature of bear markets as investors focus on the short term realities of loss.  Ben Carlson, of “A Wealth of Common Sense,” makes a strong case for changing your focus to the long term.  We can’t buy the past but hopefully we will learn from it and the future will reward us for our discipline. Read his article here.

 

How To Be a Better DIY Investor

As we celebrate our 10th anniversary and how our work—what we know based on historical evidence and academic research—has evolved over the years, it’s clear that our Foundation is different than other financial education sources. Our focus is on empowering DIYers to be sound, long-term investors.

That said, we advocate for hiring ethical fee-based advisor to discuss your specific circumstances and we seek to provide you a range of experts in various aspects of personal finance and planning through our Truth Tellers.

If, as a Do-It-Yourself investors you want to act like a professional advisor, you need to learn how to be a professional giving free information to the most important client in the world…you!

Advisors subscribe to a lot of regular sources of info to educate and motivate them to take better care of their clients. Shouldn’t a DIY investor do the same?

Here’s a simple example: In this article, “3 Bear Market Survival Tips to Give Clients Now,” writer Dinah Wisenberg Brin cites the President and CEO of for ALM Think Advisor, Peter Mallouck.

If you were a professional advisor, would you give this advice to yourself?   

 

Q&A by Chris Pedersen

Q:  Between the three of brokerages, outside of the Best in Class funds, Is there a brokerage whose funds you prefer?

A:  Not really. You’ll be able to cost-effectively access the best-in-class funds at many of the brokerages too, so the decision of which brokerage to use will more likely be driven by differences in their service offerings.  I do like that Vanguard is owned by their investors, but I know that their focus on low cost has also meant their customer-service and service amenities (e.g., the website) have sometimes been compromised.  If you want to compare portfolios from the different brokerage families, I recommend using the new configurator which can be found here.  

 

Q:  What will happen to the M1 Finance Merriman Portfolio Pies when and if The Merriman Financial Education Foundation stops maintaining them?

A:  Nothing.  When you choose to use one of the Merriman pre-made pies in your M1 account, there is no link back to Merriman.  The only way it changes or gets updated is if you, the investor, change it.  

 

Q:  You mention M1 Finance limitations on your website.  Number 6 says “M1 Finance accounts have a “Portfolio” at their top level which can be made up of “Pies” that include asset allocations that are stable and don’t drift with market values.”  What does this mean?

A:  It means that the target allocations you set in your pies will be constant unless you change them.  If you set up the account to automatically reinvest dividends and contributions, they will be applied in such a way as to maintain the target allocations.  If you want to change your allocation, say to lower equities and increase fixed income approaching retirement, you’ll have to do that manually by adjusting the pies.  If you are following a 2 funds for life approach, or the Merriman Aggressive Target Date Allocation, you will need to recalculate your allocations periodically and update your pie or pies accordingly.  

 

Personal Stories

“I’m a part of a non-professional investment club, where we collectively analyze good long-term strategies and help each other grow. We also have a book club and our current read is “We’re Talking Millions!”. It’s a great book, very well written too. Little humor here and there also helps to digest new information. You did a good job. We’ve already started to form our pool of ETF tickers to adopt the strategy.” — Andrei K.

“Hello Paul. I’ve been a do it yourself investor for over 22 years now and just wanted to say thank you for all that you do for us. I like keeping it simple and have semi-retired with FIRE concept.  Simple Vanguard index funds and did it the old fashioned way… Slowly! Anyway, loved your interview with Rob Berger and also your podcasts.  Thanks for the continued inspiration.” — Steven O.

 

Helping you build a better financial future,
Paul

Call To Action!

Here are a few simple ways to support the financial education work of The Merriman Financial Education Foundation, a registered 501(c)3. In so doing you help better the lives of individuals, families and  communities, creating more opportunities for all.

Subscribe to our weekly “Sound Investing” podcast, available on your favorite listening platforms and leave a review. Tell us what you think!
Subscribe to our YouTube Channel, and hit the thumbs up, subscribe, leave a comment and share the link with your social media and friends. 
Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time affiliate fee —at no cost to you—which helps support our financial education projects.
Follow us on Facebook, Twitter and LinkedIn
Buy our latest books, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement and 2 Funds for Life: A quest for simple & effective investing strategies; all the profits help support our work.
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The post Your greatest Thanksgiving investments appeared first on Paul Merriman.