Paul Merriman explores one of the most important decisions every long-term investor faces: Should your retirement savings be invested entirely in equities, or should you balance your portfolio with a mix of stocks and bonds?
Paul compares two “lifetime” investment strategies:
100% Equity Portfolio (S&P 500): Maximum growth potential, but maximum volatility.
60/40 Portfolio (60% Stocks / 40% Bonds): A classic “balanced” approach with reduced risk.
Using data from multiple decades and several key tables—
Table B1 Fine Tuning Table: S&P 500 Equity Portfolio
Table H2a Sound Investing Portfolios (these portfolios are all 100% equities)
Table H2 Sound Investing Portfolios (these portfolios are all 60% equities/40% fixed income) (NEW)
Table C1 Fixed Contributions ($1,000/yr: S&P 500 Equity Portfolio
—Paul reveals how each portfolio would have performed over 55 years of accumulation and retirement, comparing growth, risk, and long-term sustainability.
You’ll discover:
- How often 60/40 actually outperformed 100% equities during downturns.
- Why volatility, drawdowns, and risk matter as much as returns.
- The “half the risk” advantage of the 60/40 strategy.
- How consistent contributions—whether $1,000 or $6,000 per year—grow dramatically over time.
Finally, Paul previews the next podcast, where he’ll compare the same 100% vs. 60/40 strategies using the U.S. 4-Fund and Worldwide 4-Fund portfolios.
Key Takeaways:
- 100% equities historically delivered higher returns but with far greater volatility and deeper drawdowns.
- The 60/40 portfolio captured most of the returns with roughly half the risk.
- Consistency, time horizon, and investor temperament all matter when choosing your “lifetime” portfolio strategy.