Paul Merriman - “The People That Have Come Out Ahead Are People Who Have Put Trust in the System Over the Long-Term" | #101
In Episode 101, we welcome the great educator, Paul Merriman. We start with Paul’s background; specifically, the story of an early trading experience with commodities. He doubled his money in days…and then lost everything on the very next trade. Then the guys dive in, with Meb bringing up something Paul wrote called “The Ultimate Buy & Hold Portfolio” and asking for more detail. Paul starts with the S&P which, even with all its up-and-downs, has done great over the years. But then he walks us through some tweaks – adding large cap, then small cap – he notes the various percentage returns added by each, as well as the effect on volatility. He eventually arrives at a final portfolio, showing us the power of this diversification.
Key Points
- Paul Merriman emphasizes the importance of understanding past performance, both good and bad, as a more dependable guide for investors than predictions about the future.
- Market timing can be effective but is emotionally challenging for investors due to the requirement of frequent trading, the acceptance of losses, and the potential to underperform in bull markets.
- Starting to invest early and taking advantage of compounding interest, even with modest amounts, can lead to substantial wealth over time, suggesting that saving and investing wisely from a young age is a powerful strategy for financial success.
Follow Paul: Website
Resources: Marketwatch.com Books and Podcast Lessons from 2018 Ultimate Buy and Hold Strategy 2018 Get Smart or Get Screwed: How To Select The Best and Get The Most From Your Financial Advisor Wes Gray on The Meb Faber Show in June 2016 Triumph of the Optimists: 101 Years of Global Investment Returns Video – 50 Facts Every Investor Should Know
Chapters
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Transcript
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