Merriman, LLC

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So far, this workshop has covered the most important things every investor should know and think about. However, all the investment knowledge in the world won’t do you much good unless you put it to work in your portfolio and your life.

In the sixth session of our online workshop, Moving into action, I identify the key things that will be most useful in translating knowledge into action and action into results. I’ll also point you to a lot of helpful books and other resources.

Recommended reading to supplement this section: “Your Action Plan,” Chapter 15 in Paul’s book “Live It Up Without Outliving Your Money.”

I have read Paul Merriman’s book, Live It Up Without Outliving Your Money and watched some of Paul’s videos and listened to his podcasts. I have a question that hasn’t been addressed: What’s the best way to transition a portfolio from individual stocks to index funds and ETFs?

I would like to make the change quickly, but I’m worried that my timing might turn out to be all wrong. Should I do it all at once, or gradually over a period of time?

We believe that the move you are describing is a good way to reduce your risk and potentially improve your return, because index funds and ETFs will give you much greater diversification. I recommend you follow the recommendations that you’ll find in Paul Merriman’s article “The Ultimate Buy and Hold Strategy.”

Once you have made this decision, I cannot see any good reason to spread it out. If you do it all at once, you will get it over with quickly so you can focus on other things. I recommend you sell all the stocks in a single day. Stock trades typically take three business days to settle, so there will be a short delay before you can reinvest the proceeds.

During that brief period while your money is in cash, the market may go up or it may go down – or it could remain largely unchanged. You can’t control that, so you will have to accept it as an unknown price you’ll have to pay (if you must reinvest at higher prices) or an unknown bonus you receive (if you reinvest at lower prices). Either way, make the change and get it over with.

If you try to control this, you’ll have to predict or guess future stock prices, and that’s likely to lead to second-guessing your plan and not getting it accomplished.

There’s an exception to that advice. If the stocks you own are in a taxable account, it’s important that you consult your tax advisor before you move forward. Tax consequences in some cases should dictate the timing of your sales.

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When you retire, your financial life may change profoundly. You may have been saving money all your life, and suddenly the flow of dollars starts moving the other way. This change has large challenges emotionally, mathematically and financially.

In the fourth section of our online workshop, Paul discusses taking distributions in retirement and suggests solutions that are likely to work for retirees in various circumstances.

If this topic is of particular interest to you, we recommend reading our Best of Merriman article, titled “Retirement distributions: How much can you afford?”

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We hope you have enjoyed the first two sections of our online workshop. The third section, Selecting the best mutual funds, is now available at our YouTube channel: www.youtube.com/merrimaninc.

Thousands of mutual funds are available in today’s marketplace, but only a handful are truly the very best for investors. In this section of the Merriman Online Workshop, Paul Merriman compares two fund families, showing why each is worthy of your investment dollars and your trust.

If you missed the first two sections, you can find them here:

Section 1: Choosing the best asset classes

Section 2: Fine tuning your asset allocation

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A couple of weeks ago, we introduced our online workshop with Section 1: Choosing the best asset classes.

Now Section 2, Fine Tuning Your Asset Allocation, is available at www.youtube.com/merrimaninc. Arguably the single most important decision every investor makes is how much of his portfolio to hold in stock funds and how much in bond funds. This is the main determining factor in both risk and returns. In this section, Paul Merriman uses a table of investment results going back to 1970 to help you choose the allocation that is most likely to be successful for you.

The six videos that make up Section 2 cover:

1. Fine Tuning Your Asset Allocation
2. Fine Tuning Table
3. S&P 500 vs Worldwide Equity
4. The impact of adding fixed income
5. Fine Tuning for retirees and moderate risk investors
6. Finding your personal best asset allocation

Successful investing is all about making smart choices, and I’ve taught thousands of investors how to do that since our company opened in 1983. Our teaching has taken many forms, including radio, television, newsletters, podcasts, books, articles, websites and DVDs. But my favorite format is the live workshop, a room filled with investors looking for the best solutions.

For most of my career, delivering a workshop required actually being in such a room, often with extensive travel involved. Now I am delighted to present a consistent workshop experience to thousands of investors online. (more…)