Search found 325 matches

by klaus14
Thu Jan 16, 2020 3:03 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

There was a lot of discussion about precise models of PSLDX in the great adventure thread, and I will just mention from that you can go back to 1985 in PV by substituting the ETFs out for old mutual funds. It is reasonably close to 100 VFINX -100 CashX and 100 VWESX. This is pretty much dead on dur...
by klaus14
Sat Jan 11, 2020 3:12 pm
Forum: Investing - Theory, News & General
Topic: ERN: gold as a hedge for sequence of return risk?
Replies: 57
Views: 2129

Re: ERN: gold as a hedge for sequence of return risk?

My preference is to expect to reduce spending (including my spending from just the bond side) if times get tough, instead of striving for optimal diversification from every conceivable event. There's a lot to be said for reducing one's spending in response to market downturns. There's also a lot to...
by klaus14
Sat Jan 11, 2020 12:42 am
Forum: Investing - Theory, News & General
Topic: ERN: gold as a hedge for sequence of return risk?
Replies: 57
Views: 2129

Re: ERN: gold as a hedge for sequence of return risk?

If your SWR is low enough, you don't need gold And if your SWR is too high and risks portfolio failure, banking on gold is a risky way to solve that problem....better to just lower the withdrawal rate. This is a very misleading form of reasoning. You can say the same thing about bonds too: "If your...
by klaus14
Fri Jan 10, 2020 6:30 pm
Forum: Investing - Theory, News & General
Topic: ERN: gold as a hedge for sequence of return risk?
Replies: 57
Views: 2129

Re: ERN: gold as a hedge for sequence of return risk?

Most people want to increase the safety of their withdrawal rate. If gold helps with that, that's great. It's not just back testing, it's a well known phenomena that when global political or financial system risks increase, people flock to gold. In that sense, gold is a very good hedge. The flight ...
by klaus14
Fri Jan 10, 2020 12:42 pm
Forum: Investing - Theory, News & General
Topic: Will The Stock Market Actually Pay My Rent?
Replies: 22
Views: 3187

Re: Will The Stock Market Actually Pay My Rent?

i think this is not a bad question. Housing is the biggest constant expense in most people's budget. So, one may argue that if you intend to live in a place for a long time, it's a good idea to buy a house. It has some opportunity cost, but it surely reduces the risk of not being able to pay your re...
by klaus14
Fri Jan 10, 2020 12:32 pm
Forum: Investing - Theory, News & General
Topic: ERN: gold as a hedge for sequence of return risk?
Replies: 57
Views: 2129

Re: ERN: gold as a hedge for sequence of return risk?

If your SWR is low enough, you don't need gold And if your SWR is too high and risks portfolio failure, banking on gold is a risky way to solve that problem....better to just lower the withdrawal rate. This is a very misleading form of reasoning. You can say the same thing about bonds too: "If your...
by klaus14
Fri Jan 10, 2020 12:26 pm
Forum: Investing - Theory, News & General
Topic: Diversification is not always, automatically, a free lunch
Replies: 50
Views: 4279

Re: Diversification is not always, automatically, a free lunc

305pelusa and nisi are both right. Diversification is important because we don’t know what future conditions will come to pass. And so we should all hold some amount of asset classes (like commodities, and international stocks) that have performed terribly in the past, with the expectation that the...
by klaus14
Thu Jan 09, 2020 1:47 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

hen1230 wrote:
Thu Jan 09, 2020 1:36 pm
Can the performance of NTSX be approximated on portfoliovisualizer using 90% SPY, 60% IEF, -50% CASHX?
yes.
by klaus14
Mon Jan 06, 2020 6:32 am
Forum: Investing - Theory, News & General
Topic: Schiller's article on CAPE in NYT today
Replies: 147
Views: 9328

Re: Schiller's article on CAPE in NYT today

You could make an argument that a 33 PE is reasonable given a 10 year rate less than 2%. Maybe, yet CAPE is much lower in Europe and Japan, where interest rates are even lower than in the US. this is indeed surprising and makes european bonds even less appealing. also makes european stocks more sca...
by klaus14
Sat Jan 04, 2020 11:31 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Based on your above posts, it's sounds like you might be using some kind of valuation based timing approach. Is that correct? If not, then what do you do? I am not capable of doing that. But Vanguard is capable of providing projections and valuation analysis. See their fair value CAPE analysis here...
by klaus14
Sat Jan 04, 2020 1:58 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

... 4% SWR assumption is very optimistic. I am using 3.5% for my calculations. But that's specific to my portfolio which I think is more efficient than a traditional 60/40 with similar volatility. Also it's specific to my personal situation like I work in US Tech so i underweight it by small value ...
by klaus14
Sat Jan 04, 2020 1:37 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Maybe they do, maybe they don't. Many people, including a number of 'experts, were decrying the growth of stocks back in 2013, yet here we are. Nobody knows the future. i think smart thing to do is assess (as much as you can) the probabilities and position yourself accordingly. It's more likely tha...
by klaus14
Sat Jan 04, 2020 1:27 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

It happened from 1990-1999. We don't know what will happen to earnings, GDP, or anything else. I'm not making any statements about the likelihood of anything. If you think you know the future, I'm sorry to tell you that you're wrong. it's not 1990. in 1990, 10y treasury was 8% and CAPE was 17. star...
by klaus14
Fri Jan 03, 2020 10:22 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

It happened from 1990-1999. We don't know what will happen to earnings, GDP, or anything else. I'm not making any statements about the likelihood of anything. If you think you know the future, I'm sorry to tell you that you're wrong. it's not 1990. in 1990, 10y treasury was 8% and CAPE was 17. star...
by klaus14
Fri Jan 03, 2020 12:48 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

I've heard this from others as well, but I don't agree at all that it is a 'given'. For the 1980-1989 decade, U.S. stocks had an annualized real return of 10.52% and only encountered one relatively brief bear market in 1987. It actually sounded pretty similar to 2010-2019. But from 1990-1999, U.S. ...
by klaus14
Fri Jan 03, 2020 12:39 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Given we are late in the business cycle... I've heard this from others as well, but I don't agree at all that it is a 'given'. For the 1980-1989 decade, U.S. stocks had an annualized real return of 10.52% and only encountered one relatively brief bear market in 1987. It actually sounded pretty simi...
by klaus14
Fri Jan 03, 2020 12:32 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 229
Views: 38546

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Given we are late in the business cycle... I've heard this from others as well, but I don't agree at all that it is a 'given'. For the 1980-1989 decade, U.S. stocks had an annualized real return of 10.52% and only encountered one relatively brief bear market in 1987. It actually sounded pretty simi...
by klaus14
Thu Jan 02, 2020 11:43 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

I have a naive question. If one decides to buy this fund according to their stock/bond AA, will $100 of NTSX count as $90 of stock and $60 of bonds (= $150 total)? I've been counting it as 60/40. So to achieve, say, 80/20 in this part of my portfolio I went from: 80 stock / 20 bond to 50 stock / 50...
by klaus14
Thu Jan 02, 2020 11:29 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

I have been thinking a lot about NTSX and it's use as part of an all-weather/risk parity strategy. In fact, I assisted my father-in-law in buying some shares of NTSX today to implement such a strategy. He is 60 and really needs to save and invest well over the next decade if he wants to retire at 7...
by klaus14
Tue Dec 31, 2019 6:35 am
Forum: Investing - Theory, News & General
Topic: Decade of Debt. Market fueled by debt.
Replies: 56
Views: 4585

Re: Decade of Debt. Market fueled by debt.

this decade was interesting because central banks pumping money via low interest rates didn't cause high inflation. instead asset prices are inflated. so when this corrects, i don't know if we will see inflation.
by klaus14
Mon Dec 30, 2019 1:44 am
Forum: Investing - Theory, News & General
Topic: Using Vanguard's Forecast for Expected Returns in Models
Replies: 83
Views: 3753

Re: Using Vanguard's Forecast for Expected Returns in Models

vanguard already does that. their recommended portfolios overweight international stocks and long term treasuries.
by klaus14
Fri Dec 27, 2019 10:04 pm
Forum: Investing - Theory, News & General
Topic: Do you use emerging markets bonds? If so, why?
Replies: 39
Views: 4458

Re: Do you use emerging markets bonds? If so, why?

Yes, i hold equal amounts to EM equity. (10% each)
I split it half local currency, half USD.

Prinary benefit is diversification. EM equity is mostly Asia vs EM debt is mostly latin America.

I hold it as part of my risk budget. (I hold US treasuries + gold as protection against stock/EM collapse)
by klaus14
Wed Dec 25, 2019 9:12 pm
Forum: Investing - Theory, News & General
Topic: A low-cost 5 fund Boglehead portfolio
Replies: 116
Views: 19940

Re: A low-cost 5 fund Boglehead portfolio

----- I think this portfolio is great, but can be enhanced even further by: - moving 8% of VTI to gold (GLDM). Gold as a portfolio insurance. In addition, now stocks are world market cap split between US and ExUS but portfolio is still home biased because of USD bonds. - moving 8% of VWO to Emergin...
by klaus14
Wed Dec 25, 2019 6:44 am
Forum: Investing - Theory, News & General
Topic: Golden Dragonfly Portfolio - A Real World Experiment
Replies: 52
Views: 3686

Re: Golden Dragonfly Portfolio - A Real World Experiment

===BEGIN DESCRIPTION=== Revision History: 12/24/19: Version 1.0 Executive Summary: Goal: Create a real-life tested variant of the Golden Butterfly portfolio by making small modifications to the original, then evaluate for risk-adjusted returns relative to the original Golden Butterfly on a quarterl...
by klaus14
Sun Dec 22, 2019 7:25 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

Historically that's been true, with all the standard backtesting caveats. I hold NTSX, so I obviously bank on that relationship continuing, and most of its advantge has clearly derived from drawdown protection. If you at the periods between crashes, it essentially tracked the S&P 500 with somewhat ...
by klaus14
Sun Dec 22, 2019 3:16 am
Forum: Investing - Theory, News & General
Topic: Federal Budget Deficit Risks and Investment Strategy
Replies: 148
Views: 8116

Re: Federal Budget Deficit Risks and Investment Strategy

Inflation is 1.8% and real GDP Growth is 2.2% for 2019, which is nominal GDP Growth of 4%. The US Debt can grow by $816 Billion a year and still not increase as a percentage of Gross Domestic Product. GDP of $20.424 trillion X .04. So the budget decifit numbers, while large, are as not as bad as th...
by klaus14
Sat Dec 21, 2019 6:53 pm
Forum: Investing - Theory, News & General
Topic: Bond Composition across taxable vs tax advantaged
Replies: 6
Views: 284

Re: Bond Composition across taxable vs tax advantaged

I'll buy bonds. Let's say i have 10% space in tax advantaged and 10% in taxable left for this purpose. Which one of the below is better? A) VTEB (municipals, 5y average duration) in taxable + EDV (treasury with 25y duration) in Roth. B) EDV in taxable + 5y CD in Roth. I think option B is better sin...
by klaus14
Sat Dec 21, 2019 6:51 pm
Forum: Investing - Theory, News & General
Topic: Bond Composition across taxable vs tax advantaged
Replies: 6
Views: 284

Re: Bond Composition across taxable vs tax advantaged

sycamore wrote:
Sat Dec 21, 2019 6:27 pm
Seems like a reasonable approach to me. And option B with EDV in taxable also presumably gives you greater chance of tax loss harvesting opportunity when/if "rates rise".
thanks. this is a good point.
by klaus14
Sat Dec 21, 2019 6:15 pm
Forum: Investing - Theory, News & General
Topic: Bond Composition across taxable vs tax advantaged
Replies: 6
Views: 284

Re: Bond Composition across taxable vs tax advantaged

Are you sure you want the extreme volitility of EDV? What is your state? Is there a state specific muni bond fund available? Would a short term TIPS fund in your tax sheltered account maybe offer similar interest to EDV with less volitility? Yes. EDV volatility is not part of the question here. The...
by klaus14
Sat Dec 21, 2019 6:10 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 465
Views: 49216

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

I have a naive question. If one decides to buy this fund according to their stock/bond AA, will $100 of NTSX count as $90 of stock and $60 of bonds (= $150 total)? Thanks. I consider it as: $90 of stock and $60 of intermediate term treasuries and -$50 cash (which cancels any money market or TBills ...
by klaus14
Sat Dec 21, 2019 6:04 pm
Forum: Investing - Theory, News & General
Topic: Bond Composition across taxable vs tax advantaged
Replies: 6
Views: 284

Bond Composition across taxable vs tax advantaged

I'll buy bonds. Let's say i have 10% space in tax advantaged and 10% in taxable left for this purpose. Which one of the below is better? A) VTEB (municipals, 5y average duration) in taxable + EDV (treasury with 25y duration) in Roth. B) EDV in taxable + 5y CD in Roth. I think option B is better sinc...
by klaus14
Tue Dec 17, 2019 3:43 pm
Forum: Investing - Theory, News & General
Topic: Improving the Dalio/Robbins All-Seasons Portfolio
Replies: 247
Views: 60998

Re: Improving the Dalio/Robbins All-Seasons Portfolio

WisdomTree has a relatively new fund (NTSX) blending 90% US Large caps with 6x levered treasuries via futures. It's cheap. 20 bps ER. I think it makes sense to use it for US equity holdings in this portfolio. It will allow you to increase equity percentage and returns w/o sacrificing risk parity. A...
by klaus14
Sat Dec 14, 2019 6:49 pm
Forum: Investing - Theory, News & General
Topic: Do TIPS work? How do we know?
Replies: 167
Views: 7822

Re: Do TIPS work? How do we know?

The only way they could not "work" would be if the Treasury defaulted on them. Certainly that could happen, but that is no different from any other Treasury security. We plan on the assumption that nothing is any safer from default than Treasury securities. I don't really understand why people stil...
by klaus14
Sat Dec 14, 2019 6:41 pm
Forum: Investing - Theory, News & General
Topic: Do TIPS work? How do we know?
Replies: 167
Views: 7822

Re: Do TIPS work? How do we know?

The only way they could not "work" would be if the Treasury defaulted on them. Certainly that could happen, but that is no different from any other Treasury security. We plan on the assumption that nothing is any safer from default than Treasury securities. I don't really understand why people stil...
by klaus14
Sat Dec 14, 2019 6:40 pm
Forum: Investing - Theory, News & General
Topic: Do TIPS work? How do we know?
Replies: 167
Views: 7822

Re: Do TIPS work? How do we know?

How have TIPS fared - in terms of return above inflation - compared to corporate bonds? Not well . According to Portfolio Visualizer ( see here ) since 2003 (longest timeframe available) corporate bonds have returned 5.53% and TIPS only 4.07%, and corporates had a slightly better Sharpe ratio. This...
by klaus14
Thu Dec 12, 2019 4:14 am
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 60
Views: 7186

Re: SWAN ETF - 10% Leaps / 90% Treasuries

Are there any tax benefits to a strategy like this in an ETF wrapper vs. doing it myself? If I have to roll LEAP contracts myself that's quite the tax drag. Yeah, the tax drag definitely makes the fund the wrong way to go. If you have the cash on hand required to not need the leverage of the call o...
by klaus14
Thu Dec 12, 2019 12:46 am
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 60
Views: 7186

Re: SWAN ETF - 10% Leaps / 90% Treasuries

I personally do not believe that this Swan ETF will do what it sets out to do any better than a simple quality bond dominated portfolio with widely diversified index equity not using options or Leaps. Like many offerings from the fund industry it's a solution in search of a problem IMO. Really? The...
by klaus14
Tue Dec 10, 2019 3:37 pm
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 60
Views: 7186

Re: SWAN ETF - 10% Leaps / 90% Treasuries

I am comparing this to other "safer" US Stock strategies like NTSX and USMV. These 2 seems to behave similar to SWAN if you mix in more treasuries with them. See with equal std portfolios . They all beat regular 60/40. SWAN is slightly better than NTSX. The problem is that this data is very limited...
by klaus14
Tue Dec 10, 2019 3:26 pm
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 60
Views: 7186

Re: SWAN ETF - 10% Leaps / 90% Treasuries

I am comparing this to other "safer" US Stock strategies like NTSX and USMV. These 2 seems to behave similar to SWAN if you mix in more treasuries with them. See with equal std portfolios . They all beat regular 60/40. SWAN is slightly better than NTSX. The problem is that this data is very limited.
by klaus14
Mon Dec 09, 2019 1:38 am
Forum: Investing - Theory, News & General
Topic: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report
Replies: 84
Views: 5741

Re: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report

I agree with what you say but in this context, I don’t think Vanguard is using margins of errors so large so as to not be actionable. They give a margin of +-1% for all assets. I need to really dig into that. A 1% margin of error with a high degree of confidence (i.e. 95% or higher) is seldom gener...
by klaus14
Mon Dec 09, 2019 1:22 am
Forum: Investing - Theory, News & General
Topic: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report
Replies: 84
Views: 5741

Re: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report

They are not predicting the future or forecasting like "there will be a stock market correction next year" they are calculating expected returns based on current multipliers/valuations/trends. " expected " in a probabilistic sense: average of possible futures. history only plays itself once, so we ...
by klaus14
Sun Dec 08, 2019 11:54 pm
Forum: Investing - Theory, News & General
Topic: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report
Replies: 84
Views: 5741

Re: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report

They are not predicting the future or forecasting like "there will be a stock market correction next year" they are calculating expected returns based on current multipliers/valuations/trends. " expected " in a probabilistic sense: average of possible futures. history only plays itself once, so we d...
by klaus14
Sun Dec 08, 2019 1:47 am
Forum: Investing - Theory, News & General
Topic: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report
Replies: 84
Views: 5741

Re: December 6, 2019--Vanguard Releases 2020 Economic and Market Outlook Report

... Marketing material? 0_o yeah we definitely read different papers. It doesn't fit the idea of some enthusiastic sell-side marketing, but it is marketing material. Every major investment firm puts out a similar type reports. Black Rock https://www.blackrock.com/us/individual/insights/blackrock-in...
by klaus14
Fri Dec 06, 2019 11:20 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 2020 outlook: The new age of uncertainty
Replies: 27
Views: 3332

Re: Vanguard 2020 outlook: The new age of uncertainty

From Page 43, Vanguard's Slowdown Portfolio for their base case: 21% U.S. equity 31% Global ex-U.S. equity 3% Global ex-U.S. bonds 0% Short-term credit 11% Short-term Treasury 31% Long-term Treasury 3% Short-term TIPS Surprising that ExUS equity is overweight. Note reads: "Portfolios are selected fr...
by klaus14
Fri Dec 06, 2019 11:12 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 2020 outlook: The new age of uncertainty
Replies: 27
Views: 3332

Re: Vanguard 2020 outlook: The new age of uncertainty

From Page 39, from overvalued to undervalued: U.S. aggregate bonds > Intermediate credit > Duration strategy > TIPS "Break-even inflation expectations inferred from the U.S. TIPS market remain below the Fed’s 2% inflation target and slightly lower than the VCMM long-term median levels. This improves...
by klaus14
Fri Dec 06, 2019 11:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 2020 outlook: The new age of uncertainty
Replies: 27
Views: 3332

Re: Vanguard 2020 outlook: The new age of uncertainty

From Page 35, from overvalued to undervalued:

Growth > Large-cap > Emerging markets > U.S. > Value > Ex-U.S. developed market > Small-cap
by klaus14
Mon Dec 02, 2019 4:27 am
Forum: Investing - Theory, News & General
Topic: When a company repurchases its shares, does the company become less valuable?
Replies: 61
Views: 4155

Re: When a company repurchases its shares, does the company become less valuable?

Because in a Microsoft buyback, the Microsoft shares are retired. So no Microsoft does not have the purchased shares on their balance sheet. Even if they don't retire and hold the shares, it doesn't matter. A company can always issue new shares. That's how they do IPOs or follow-on offerings . Sell...