How Much Should You Invest in the Stock Market? A Merton share spreadsheet to help you decide

This video discusses what percentage of one's wealth should be invested in the stock market.

Topics covered include:
- David introduces the concept of the Merton share, a formula developed by Nobel Prize winner Robert C. Merton, which helps determine the appropriate allocation to riskier assets like stocks.
- David explains that the impetus for this discussion was a book called "The Missing Billionaires" by Victor Haghani and James White, which explores the concept of volatility drag and its impact on wealth accumulation.
- David demonstrates how to use the Merton share formula in a spreadsheet to calculate the recommended allocation to stocks based on expected returns, risk-free rates, standard deviation, and risk aversion.
- David emphasizes how the Merton share formula provides a framework for understanding the principles behind asset allocation and adjusting investment strategies based on market conditions.
- He also mentions that his own approach at Money for the Rest of Us considers market conditions rather than relying solely on a formula.
Stein concludes by inviting viewers to check out the spreadsheet and join the Money for the Rest of Us email list for more insights on money, investing, and the economy.

Access the Merton Share Google sheet here: https://docs.google.com/spreadsheets/d/1vHE5GG8oJCt4RmpX3LL166jhr6-k0fiZjdm-MrlRPg8/edit?usp=sharing

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ABOUT DAVID

David Stein is the founder of Money for the Rest of Us and cofounder of Asset Camp. Since 2014, he has produced and hosted the Money for the Rest of Us investing podcast. The podcast reaches tens of thousands of listeners per episode and has been nominated for twelve Plutus Awards and won two. David also leads Money for the Rest of Us Plus, a premium investment education platform that provides professional-grade portfolio tools and training to over 1,000 individual investors. He is the author of Money for the Rest of Us: 10 Questions to Master Successful Investing, which was published by McGraw-Hill. Previously, David spent over a decade as an institutional investment advisor and portfolio manager. He was a managing partner at FEG Investment Advisors, a $15 billion investment advisory firm. At FEG, David served as Chief Investment Strategist and Chief Portfolio Strategist.

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