Simple Retirement AA. Opinions please?
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Simple Retirement AA. Opinions please?
33% VBR (Small Cap Value)
67% BND (Total Bond Market)
I did a backtest of this portfolio covering the 1972-2008 time period. The average Return was 10.29%, Standard Deviation was 8.93%, and the CAGR was 9.94%. The worst loss was -7.19% in 2008 and the best gain was 26.42% in 1982. Someone may want to recheck my calculations just to double check since I'm new at this.
This portfolio seems to have less downside risk, which is important for retirees. Yes I know past returns are no guarantee of future returns. I'm just curious about opinions from others. Thanks so much. Happy Memorial Day weekend!
67% BND (Total Bond Market)
I did a backtest of this portfolio covering the 1972-2008 time period. The average Return was 10.29%, Standard Deviation was 8.93%, and the CAGR was 9.94%. The worst loss was -7.19% in 2008 and the best gain was 26.42% in 1982. Someone may want to recheck my calculations just to double check since I'm new at this.
This portfolio seems to have less downside risk, which is important for retirees. Yes I know past returns are no guarantee of future returns. I'm just curious about opinions from others. Thanks so much. Happy Memorial Day weekend!
Last edited by monicafaye on Sat May 29, 2010 1:17 pm, edited 1 time in total.
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I think putting all of your stocks in one asset class is about the same as all your eggs in one basket. Interesting concept, but not for me.
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Simple Retirement AA. Opinions please?
Unfortunately, I invested most of it before the market drop. But I will stay the course.
Re: Simple Retirement AA. Opinions please?
But you put 40% into BND, right? So that has had a positive return.monicafaye wrote:Unfortunately, I invested most of it before the market drop. But I will stay the course.
You have a chance to rebalance now.
Hi Monica;
Were you using this backtest website?
http://assetplay.net/financial-tools/backtest.html
I tried running an allocation of 76% intermediate treasury bonds and 8% each small cap value, emerging markets and commodities and that engine came up with a 10.26% avg return with only two losing years (worst was '94 with a 3.52% loss) and the best year was +24.6%.
Those results would probably be easier to live with because of less downside risk, but going forward it might not work out the way we anticipate. For example, I'm not really sure what "commodities" means to this allocation plan.
I would prefer treasury bonds to total bond market because you get the occasional boost in price from flights to safety.
Good luck!
John
Were you using this backtest website?
http://assetplay.net/financial-tools/backtest.html
I tried running an allocation of 76% intermediate treasury bonds and 8% each small cap value, emerging markets and commodities and that engine came up with a 10.26% avg return with only two losing years (worst was '94 with a 3.52% loss) and the best year was +24.6%.
Those results would probably be easier to live with because of less downside risk, but going forward it might not work out the way we anticipate. For example, I'm not really sure what "commodities" means to this allocation plan.
I would prefer treasury bonds to total bond market because you get the occasional boost in price from flights to safety.
Good luck!
John
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- Posts: 30
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Re: Simple Retirement AA. Opinions please?
Yes I did put 40% in BND. Should I rebalance now or at end-of-year?livesoft wrote:But you put 40% into BND, right? So that has had a positive return.monicafaye wrote:Unfortunately, I invested most of it before the market drop. But I will stay the course.
You have a chance to rebalance now.
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- Posts: 30
- Joined: Thu Mar 18, 2010 8:39 am
- Location: San Antonio, TX
Yes, that is the website I used.Quasimodo wrote:Hi Monica;
Were you using this backtest website?
http://assetplay.net/financial-tools/backtest.html
I tried running an allocation of 76% intermediate treasury bonds and 8% each small cap value, emerging markets and commodities and that engine came up with a 10.26% avg return with only two losing years (worst was '94 with a 3.52% loss) and the best year was +24.6%.
Those results would probably be easier to live with because of less downside risk, but going forward it might not work out the way we anticipate. For example, I'm not really sure what "commodities" means to this allocation plan.
I would prefer treasury bonds to total bond market because you get the occasional boost in price from flights to safety.
Good luck!
John