scone wrote:I get just about the same results using Simba's backtester, Long Term Returns, and Firecalc. So after a lot of thought, this is the allocation I picked-- it suits my "cut off the left tail" mentality (that expression always reminds me of the Three Blind Mice).
Hey scone . . . excuse my novice question, but what does "cut off the left tail" mean ?
O.K., I'm probably going to get nitpicked to death, given all the math geeks on this site, but this is my understanding. It's from statistics, the idea that your returns form a "normal distribution," or the famous bell curve. In other words, over a long period of time, most of your yearly returns will be average (middle of bell curve), while a few will be worse than average (left side of bell curve), and a few will be better than average (right side of bell curve). "Cutting off the left tail" means trying to minimize the number of bad years on the left side of the distribution, and hopefully reducing their severity. Or something like that. The expert on this strategy is Larry Swedroe, and if you search his posts, he can explain this stuff far better than I can. Unlike me, he actually knows whereof he speaks! HTH!