Larry Swedroe's Model Portfolios

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diyinvestor
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Joined: Sat Jan 21, 2012 2:36 am

Larry Swedroe's Model Portfolios

Post by diyinvestor »

Does anyone know if Larry Swedroe has updated his model portfolios since 2005? I've got his wonderful "The Only Guide To A Winning Investment Strategy You'll Ever Need" that I bought in 2005, but it might be a little dated since a lot has happened since then (just a market crash!). I am wondering if the numbers are the same, especially his model conservative portfolio, which he said in his 2005 book would be something like this below. I also notice there is no large cap growth, just looks like maybe large cap blend and large cap value.

US - 28%
Large - 6%
Large Value - 6%
Small - 6%
Small Value - 6%
Real Estate - 4%

International - 12%
Large - 2%
Large Value - 4%
Small - 4%
Emerging Mkts - 2%

Bonds - 60%
US Two-Year - 60%

Thanks.
larryswedroe
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Location: St Louis MO

Re: Larry Swedroe's Model Portfolios

Post by larryswedroe »

diyinvestor
Glad you enjoyed the book and found it helpful
Remember the "model" portfolios are just STARTING POINTS. The Only Guide You'll Ever Need for the Right Financial Plan goes into great detail on how to determine if you should consider tilting more or less to each asset class including commodities, TIPS, EM, etc. IMO there are no right answers, just one right for each person. So a TSM approach (both US and int'l) might be appropriate for someone (especially if one is prone to tracking error regret) and so is a high tilt low beta approach like the one I have used since 1998 using only US SV, ISV and EMV, but offsetting that with a very low beta allocation.
Bottom line, I was saying the same thing then and the same thing now. Only difference being the vehicles that are available now provide superior choices IMO.
I hope that is helpful
Best wishes
Larry
shawcroft
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Re: Larry Swedroe's Model Portfolios

Post by shawcroft »

Larry:
Nice of you to take the time to reply to diyinvestor's question. You have replied to a number of my general questions in the past and I thank you for that courtesy.
Shawcroft
larryswedroe
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Re: Larry Swedroe's Model Portfolios

Post by larryswedroe »

My pleasure and always happy to answer questions from readers, can either email me directly or send PM if you prefer
Best wishes
Larry
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Leif
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Re: Larry Swedroe's Model Portfolios

Post by Leif »

One difference I've noted is that Larry suggests more like a 50/50 US/Intl in his posts, but in the books it is more like 70%/30%. I recall a post made long ago by Larry that he said he was more conservative in the book since he thought most people would find 50/50 as too much Intl. He is probably right on that. However, I remember being upset with that since I used the books suggested allocation for my own portfolio.
larryswedroe
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Re: Larry Swedroe's Model Portfolios

Post by larryswedroe »

Leif
Clearly any model cannot be right for everyone. It was always meant to be a reasonable starting point, nothing more

Also at the time the US was a larger share of the global market than it is today. Today I tend to use 60% US and then try to convince people that 50/50 is a better choice if they can live with the tracking error risk

Best wishes
Larry
Rodc
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Re: Larry Swedroe's Model Portfolios

Post by Rodc »

Leif Eriksen wrote:One difference I've noted is that Larry suggests more like a 50/50 US/Intl in his posts, but in the books it is more like 70%/30%. I recall a post made long ago by Larry that he said he was more conservative in the book since he thought most people would find 50/50 as too much Intl. He is probably right on that. However, I remember being upset with that since I used the books suggested allocation for my own portfolio.
The good news is that is one area where 70/30 is not so different in general from 50/50. That is success is not likely to depend on where you are along the line from 70/30 to 30/70.

FWIW: Ignoring REITS I'm pretty much market cap. With US REITS, my only REITS, I'm about 55% US and 45% international (60% stocks in total).
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
Topic Author
diyinvestor
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Re: Larry Swedroe's Model Portfolios

Post by diyinvestor »

Thanks Larry. I appreciate you responding to my question. And thanks for your generous help to all of us on this Boglehead site over the years.
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dkdoy
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Re: Larry Swedroe's Model Portfolios

Post by dkdoy »

diyinvestor wrote:Thanks Larry. I appreciate you responding to my question. And thanks for your generous help to all of us on this Boglehead site over the years.

+1
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