Paul Merriman continues his 4-part series exploring two “radical” investment strategies: Two Radical Investments: All equities all the time and 60% Equities 40% bonds for Life.
This segment focuses on the accumulation phase—comparing the performance of the U.S. 4-Fund Portfolio with the S&P 500 over a 55-year period.
Paul walks through historical returns, risk comparisons, and the role of diversification in building long-term wealth. He explains how the 4-Fund strategy (Large Cap Blend, Large Cap Value, Small Cap Blend, Small Cap Value) stacks up against the S&P 500, whether you stay 100% in equities or use a balanced 60/40 approach.
Key insights include:
- How the 4-Fund strategy’s higher historical returns come with only slightly more volatility.
- Why the 60/40 approach offers a powerful balance between risk and reward.
- The role of good times vs. bad times in shaping long-term outcomes.
- Decade-by-decade performance analysis, including periods of bull markets, bear markets, and major drawdowns.
Paul also highlights the tables you’ll want to download and follow along with as he explains the numbers:
- Table B1: Fine-Tuning Table – S&P 500
- Table B4: Fine-Tuning Table – U.S. 4-Fund Portfolio
- Table H2a: Sound Investing Portfolios – 100% Equities
- Table H2: Sound Investing Portfolios – 60/40 Portfolios
- Table C1 & C4: Fixed Contributions for Accumulation Analysis
Next Episode Preview:
Next week, Paul will continue the series by exploring the distribution phase—looking at what happens when you start withdrawing from your portfolio using the same all-equity vs. 60/40 strategies.
Listen & Learn:
Whether you’re an all-equity investor or lean toward a balanced portfolio, this episode will give you a clearer picture of how portfolio composition impacts long-term returns, volatility, and retirement readiness.