Small Cap Value Investing: Is It Still Worth It in 2025?

Karsten Jeske (Big Ern) and Paul Merriman engage in a lively debate about Small Cap Value Investing versus Broad Market Strategies.

Should you tilt your portfolio toward small-cap value to capture a potential risk premium, or is sticking with broad-based funds like VTSAX the more reliable approach? With decades of financial expertise, Karsten and Paul offer opposing yet insightful perspectives to help you refine your long-term investment strategy.

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In This Episode, We Discuss:

1️⃣ Small Cap Value Premium: 📜 Historical data and its implications for modern portfolios.

2️⃣ VTSAX vs. Small Cap Value: ⚖️ Should investors embrace simplicity or pursue specialization?

3️⃣ Risk Premium Debate: 🎢 Does small-cap value justify the added risk in today’s market?

4️⃣ Sequence of Returns Risk: ⏳ The dangers of timing when withdrawing in early retirement.

5️⃣ Market Timing vs. Buy-and-Hold: 🎯 Are disciplined investors better off avoiding tactical shifts?

6️⃣ Portfolio Construction Tips: 🏗️ Allocating assets for growth, diversification, and resilience.

7️⃣ Nuances in Factor Investing: 🔬 Exploring quality screens, value premiums, and active management.

🔗 Paul Merriman's Links:

🌐 Merriman Financial Education Foundation

📚 We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement (And other Free Book Downloads)

📊 Quilt Charts (Referenced in the Episode):

📺 YouTube Video Explaining the Two Charts

Graph 1: 4 US Asset Class Indexes & 4 Fund Combo Relative Return Ranking (1928-2023)

Graph 2: Asset Classes & 4 Fund Combo (1928-2023) - Return Rank Frequency

🔗 Karsten’s Links:

📘 Early Retirement Now Blog

📈 Safe Withdrawal Rate Series

📊 Recent Post on Small Cap Value

🔗 David’s Links:

💰 Free Money Course

🍏 Forget About Money on Apple Podcasts

🎧 Forget About Money on Spotify

#retirement #investing #smallcap #paulmerriman #karstenjeske

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📜 Disclaimer: This podcast is for entertainment and informational purposes only. It is not financial advice. Always consult a qualified financial advisor before making major financial decisions.