# They're Back... Talking Real Money - Investing Talk

Page: https://stenobird.com/podcast/sound-investing-342834/they-re-back-talking-real-money-investing-talk
Text version: https://stenobird.com/podcast/sound-investing-342834/they-re-back-talking-real-money-investing-talk.md
Podcast: [Sound Investing](https://stenobird.com/podcast/sound-investing-342834)
Published: 2026-07-01T16:32:15+00:00
Episode link: https://podcasters.spotify.com/pod/show/sound-investing/episodes/Theyre-Back----Talking-Real-Money---Investing-Talk-e3lhcc9
Audio file: https://anchor.fm/s/10bb8090/podcast/play/122253129/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2026-6-1%2F5755fb0a-6fc2-5281-c722-8d054151b98c.mp3
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JSON: https://stenobird.com/v1/public/podcasts/sound-investing-342834/episodes/they-re-back-talking-real-money-investing-talk
Duration seconds: 1590

## Resource

I joined my longtime friend Tom Cock for a special edition of Talking Real Money — a wide-ranging conversation about the evolution of indexing, the proposed changes to the S&P 500, and why investors should understand both the strengths and limitations of traditional index funds. I explain why firms like Dimensional Fund Advisors and Avantis Investors use a more flexible, evidence-based approach than traditional indexing, and how academic research has reshaped portfolio construction over the past several decades. We also explore lessons from market history, including the importance of understanding major bear markets, determining appropriate risk levels, and building portfolios that align with your personal goals rather than chasing maximum returns. I share insights from the latest Dimensional Matrix Book and explain why I believe studying 100 years of market data helps investors stay disciplined during inevitable downturns. Finally, I introduce a simple but powerful strategy for helping newborns and young children build substantial retirement wealth through small annual investments that can compound over many decades. CHAPTERS 0:11 Special guest Paul Merriman joins Talking Real Money 0:55 Long friendship and investing partnership between Tom and Paul 1:20 S&P 500 rule changes and earlier inclusion of major IPOs like SpaceX 2:07 Historical examples of S&P 500 additions and omissions 2:35 Microsoft’s delayed entry into the S&P 500 2:56 NVIDIA replacing Enron in 2001 3:29 How index rule changes can affect future returns and volatility 4:08 Why indexing remains the preferred strategy for most investors 5:16 Traditional versus non-traditional index funds 6:37 How Avantis and Dimensional incorporate factors beyond company size 8:05 Why factor-based inve…

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## Transcript

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