Supersmart Portfolio

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Supersmart Portfolio

Postby megaluke » Wed Aug 08, 2012 12:08 am

Has anyone tested or compared Daniel Solins Supersmart Portfolio. He seems to be a big fan of Vanguard (and DFA) Didnt know if it is worth while or if it is just a way to sell books

Thanks
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Re: Supersmart Portfolio

Postby Elbowman » Wed Aug 08, 2012 12:24 pm

I think back testing things like this is a little silly since that's undoubtedly how these portfolios were constructed. It looks like he loaded up on a bunch of of high volatility, high return indices. If history repeats itself then these portfolios will probably be a wild ride that end up well if you can hang on long enough.

IMHO, he is concentrating too much in too small a segment of the market. The boglehead debates between the people I respect the most tend to be 3-fund vs. 3-fund with a small value tilt. The supersmart portfolios seem to be small value with a slight TSM tilt.
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Re: Supersmart Portfolio

Postby YDNAL » Wed Aug 08, 2012 1:59 pm

megaluke wrote:Has anyone tested or compared Daniel Solins Supersmart Portfolio. He seems to be a big fan of Vanguard (and DFA) Didnt know if it is worth while or if it is just a way to sell books

Thanks

http://books.google.com/books?id=heXCGn ... &q&f=false
In The Smartest Portfolio You'll Ever Own: A Do-It-Yourself Breakthrough Strategy, Solin lists the Supersmart Portfolio as 2 Bond and 7 Equity funds.
For Equities, Chapter 21 wrote:20% US Large
20% US Large Value
20% US Small Value
10% US Real Estate
10% International Value
10% International Small
10% Emerging Markets

What do you mean by "worth while?" You either believe in slicing the Market and overweighing.... or you don't.
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Re: Supersmart Portfolio

Postby Tom_T » Wed Aug 08, 2012 2:13 pm

A very common allocation among Bogleheads, at least in the past, was something like:

Large
Large Value
Small
Small Value
REIT
Euro/Emerging/Pacific

I don't see that the "supersmart" portfolio is that much different. Seems reasonable if you like to slice-and-dice.
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Re: Supersmart Portfolio

Postby Default User BR » Thu Aug 09, 2012 1:25 am

Tom_T wrote:A very common allocation among Bogleheads, at least in the past, was something like:

Large
Large Value
Small
Small Value
REIT
Euro/Emerging/Pacific

Add international small and that's what I have.


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Re: Supersmart Portfolio

Postby nisiprius » Thu Aug 09, 2012 3:28 pm

YDNAL wrote:Solin lists the Supersmart Portfolio as 2 Bond and 7 Equity funds.
For Equities, Chapter 21 wrote:20% US Large
20% US Large Value
20% US Small Value
10% US Real Estate
10% International Value
10% International Small
10% Emerging Markets
Right, and Bill Schultheis's Coffeehouse Porfolio, published in 1998, apportions equities as 1/6th each U.S. large, U. S. large value, U. S. Small, U. S. Small value, REIT, and International.

So, what's the difference? Greater tilting to small-caps, more international, and an overweight to emerging markets within international.

So the question I would ask is this: what portfolio was Dan Solin recommending as supersmart in 1998? Was he prescient? Or has he simply "tilted" his portfolio, using 20/20 hindsight, to include bigger portions of those asset classes that have outperformed during last decade?

But then again, brand-name-like phrases like "Supersmart Portfolio" turn me off. Exactly what is the basis for judging the portfolio to be supersmart? Does he go into this in the book? OK, Amazon's peek into it suggests to me that he's surrounding himself with the aura of supersmart Fama and supersmart French. (I notice too that he leads off with a phony story about Einstein, without even having the honesty to lead off with a "legend has it" or "an apocryphal tale says").
Last edited by nisiprius on Thu Aug 09, 2012 3:38 pm, edited 1 time in total.
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Re: Supersmart Portfolio

Postby CaliJim » Thu Aug 09, 2012 3:33 pm

The most important thing is the top level asset allocation between stocks and bonds. Slice and dice is a refinement on top of that.
Nobody knows which AA or tilt will be best over the next 10 or 20 or 30 years.
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Past Performance and the Supersmart Portfolio ?

Postby Taylor Larimore » Thu Aug 09, 2012 3:56 pm

Hi Luke:

Has anyone tested or compared Daniel Solins Supersmart Portfolio.


I have been around awhile, and I doubt very much if testing and comparing a portfolio, which I assume uses only past performance, has any value whatsoever. Jason Zweig, the respected author and financial writer for the Wall Street Journal wrote:

“Buying funds based purely on their past performance is one of the stupidest things an investor can do."

Dan Solin is a very informed and respected Boglehead author. I have no doubt that his Supersmart seven equity fund portfolio listed in a previous Reply will perform very well. Whether it will outperform a simple two fund combination of Vanguard's Total Stock Market and Total International (which hold almost identical stocks) in the year's ahead is unknowable.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Supersmart Portfolio

Postby pascalwager » Sat Aug 25, 2012 9:46 pm

Dan Solin is a very informed and respected Boglehead author. I have no doubt that his Supersmart seven equity fund portfolio listed in a previous Reply will perform very well. Whether it will outperform a simple two fund combination of Vanguard's Total Stock Market and Total International (which hold almost identical stocks) in the year's ahead is unknowable.


His 2006 book strongly promoted the three-fund portfolio for investors who wanted simplicity.
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Re: Supersmart Portfolio

Postby staythecourse » Sun Aug 26, 2012 10:22 am

Just wanted to remind folks the best portfolio is NOT what technically is the best performing portfolio on a risk adjusted basis, i.e. efficient frontier. The best portfolio is the one you the investor can execute and stay the course. No portfolio is good unless you feel comfortable holding it through the many thick and thins of the market to see the advantages given to the long term investor.

Good luck.
...we all think we're above average investors just like we all think we're above average dressers... -Jack Bogle
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Re: Past Performance and the Supersmart Portfolio ?

Postby abuss368 » Sun Aug 26, 2012 4:10 pm

Taylor Larimore wrote:
Dan Solin is a very informed and respected Boglehead author. I have no doubt that his Supersmart seven equity fund portfolio listed in a previous Reply will perform very well. Whether it will outperform a simple two fund combination of Vanguard's Total Stock Market and Total International (which hold almost identical stocks) in the year's ahead is unknowable.

Best wishes.
Taylor



Hi Taylor.

Total market investing can not be beat.

Simplicity rocks!

Thank you Mr. Bogle.

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + REITs
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Re: Supersmart Portfolio

Postby staythecourse » Sun Aug 26, 2012 5:47 pm

Taylor Larimore wrote: I have no doubt that his Supersmart seven equity fund portfolio listed in a previous Reply will perform very well. Whether it will outperform a simple two fund combination of Vanguard's Total Stock Market and Total International (which hold almost identical stocks) in the year's ahead is unknowable.


Actually that is an easy one to answer. If large cap U.S. and foreign outperform then TSM/TISM will outperform. If small cap, value, EM, or REITS do better then the multiasset class portfolio will likely outperform. Index funds will do only as well as the indices they replicate minus tax and costs. The only question is which assets will do be in the future then others and not knowing in advance is the whole idea of holding mutiple assets in a portfolio so one covers all their bases.

Good luck.
...we all think we're above average investors just like we all think we're above average dressers... -Jack Bogle
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Re: Supersmart Portfolio

Postby Rick Ferri » Sun Aug 26, 2012 6:14 pm

There are many roads to Dublin.

Strategy is secondary to philosophy. It's not a specific strategy or allocation to specific funds that matter most, it's understanding the philosophy and investing according to it. If you have Boglehead beliefs, craft a sensible portfolio and implement it religiously, then you'll be fine.

Don’t sweat the small stuff.

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