Paul Merriman and Chris Pedersen tackle your biggest questions—from simplifying portfolios and picking best-in-class ETFs to understanding equal-weighted funds, tax efficiency, and how much small-cap value to own. They dig into factor investing (size, value, quality, profitability, momentum), why reversion to the mean matters, and how to think like an owner—not a speculator. Plus: mentors, work-life balance, and the real risk investors face.
Chapters
00:00 – Intro & Mentors
05:07 – Portfolio Simplification
10:13 – Work-Life Balance
11:39 – Which ETFs will outperform?
20:15 – Importance of Quality
22:45 – Equal-Weighted Funds
26:14 – History: how long is enough?
29:58 – Cost of public indexing
33:30 – Equal-weight fund tax vs. ETF
35:21 – How much small-cap value?
39:47 – Why three EM ETFs?
42:28 – “All Avantis” risk?
49:45 – Technology sector history & mean reversion
53:00 – Be an owner, not a speculator
55:27 – Outro
Key Takeaways
“Best” ETF ≠ next year’s top performer—seek consistent factor exposure, low costs, broad holdings, and tax efficiency.
Equal-weighting boosts small/value exposure but can increase turnover and tax drag; pairing large-cap blend with small-cap value can be more efficient.
Decide small-cap value allocation by temperament (common range: 10–50% of equities when pairing with S&P 500/target date).
Index approach vs. index label: DFA/Avantis are systematic and rules-based without telegraphing rebalances.
Think like an owner: over decades, earnings—not sentiment—drive returns.
Resources
• Best-in-Class ETF Recommendations (2025): https://www.paulmerriman.com/best-in-class-etf-recommendations-2025#gsc.tab=0
• Sound Investing Portfolios, Returns & Risks: https://www.paulmerriman.com/sound-investing-portfolios#gsc.tab=0
• “Tune Out the Noise” (DFA Documentary): https://youtu.be/T98825bzcKw?si=kFMugnSSCn2E76sI
