After a week with family, friends, and his longtime writing partner Rich Buck, Paul sat down to record this reflective new episode of Sound Investing.

He opens with a story from his talk at Olympic College, where a student asked the question every new investor faces:

“How can I trust the market when I might lose everything?”

Paul’s answer is grounded in decades of data. He guarantees investors will lose money—sometimes—but never everything, if they’re diversified and disciplined.

Using 75 years of historical returns, Paul examines three 25-year periods:

• 1950–1974: S&P 500 compounded at 10.1%
• 1975–1999: S&P 500 compounded at 17.2%
• 2000–2025: S&P 500 compounded at 8.3%

He compares these with the Four-Fund Strategy, where equal allocations to large-cap value, small-cap blend, and small-cap value produced a 9.4% average annual return over the last 25 years—versus 8.3% for the S&P 500 alone.

Paul also highlights a striking finding:
The equal-weighted S&P 500 (VADDX / RSP) outperformed the traditional cap-weighted index, compounding at 9.9% versus 8.3% since 2000.

“Equal weighting rewards the underdogs—smaller companies that are temporarily out of favor,” Paul says. “It’s a built-in way to lean toward value and size premiums.”

Finally, he revisits the Small Cap Value Index, where DFA’s real-time fund (DFSVX) returned 11.1% versus 8.3% for the S&P 500—proving once again that diversification across size and value continues to pay off for long-term investors.

Paul concludes with this reminder:

“We can’t buy the past, but we can learn from it. Every extra percent of return—earned through disciplined diversification—can change a lifetime of outcomes.”