For first-time listeners, welcome! In this opening episode of the year, Paul Merriman—founder of the Merriman Financial Education Foundation—looks back at 2025 to uncover what the markets taught us and how those lessons can help do-it-yourself investors make better decisions going forward.

Despite endless predictions about what markets “should” do, Paul reminds us his role isn’t to forecast the future—but to help investors understand risk, return, and how to build portfolios they can actually stick with.

In this episode, Paul explores:

• A surprising result from the “Magnificent Seven” stocks
• Why diversification mattered in 2025
• How different equity asset classes performed
• What 56 years of data (1970–2026) tells us about staying the course

Paul also compares index funds, ETFs, and average mutual fund performance and reinforces a long-standing truth:

Cost, diversification, and tax efficiency matter.

Large-Cap Blend Example (2025)

Fixed income: two purposes, two strategies

1) Stability-Focused Fixed Income
Built to help cushion a portfolio during stock market stress.

• Short-term and intermediate-term government bonds
• 6.5% return
• 3.6% yield
• Very low risk

2) Income-Focused Fixed Income
Built for investors seeking cash flow.

• Mix of corporates, Ginnie Mae, and high-yield bonds
• Higher income
• Higher risk
• Designed for income, not protection

Key point: Bonds aren’t one-size-fits-all—the purpose matters.

Final takeaways

• 2025 was surprising, but not abnormal
• Diversification worked exactly as history suggests it should
• Great years—and disappointing ones—are both part of the deal
• The key to staying the course is knowing what’s normal

Paul’s closing reminder is timeless:

If you want serious personal advice, work with a good professional advisor—at least one who can check your work and help when things feel overwhelming.

Here’s to a new year of building your investment business—with clarity, discipline, and perspective.