Bogleheads.org

It's totally possible interest rates stay low Japan style for another 20 years, so I don't want 14% if I could get 18%. On the other hand, if yields on the long bond start going up every year .... Decisions, decisions. 18% is the blended CAGR across both high and low interest rate environments. If ...

For some reason portfoliovisualizer only goes back to 1978 with long term treasuries, but it goes back to 1972 with intermediate term treasuries. So I checked 1972-1981 for a portfolio that was tsm (120%), itb (180%), cash (-200%). 1972: 18.36 1973: -27.63 1974: -39.13 1975: 47.03 1976: 46.35 1977:...

For some reason portfoliovisualizer only goes back to 1978 with long term treasuries, but it goes back to 1972 with intermediate term treasuries. So I checked 1972-1981 for a portfolio that was tsm (120%), itb (180%), cash (-200%). 1972: 18.36 1973: -27.63 1974: -39.13 1975: 47.03 1976: 46.35 1977: ...

I backtested a portfolio in portfoliovisualizer of VFINX (120%), VUSTX (180%), and cash (-200%). I think this would approximate the cost of financing the leverage. It still only goes back to 1978, and the years from 1982 forward are similar to what we already have in 1987-2018. But here's the worst ...

I'll help the pro-international people out. 1. diversification means own more stocks and 10000 is more than 4000. Doesn't matter if correlation goes to 1.0, you are still more diversified in a very meaningful way. Doesn't matter if you only own two asset classes (stocks and bonds). Doesn't matter if...

In the Asness, "Why Not 100% Equities," article from 1996, he states in the Modern Finance section that, "...an investor chooses a portfolio of risky assets (in this case stocks and bonds) to maximize the portfolio's Share ratio". He then goes on in the paper to suggest that leverage can then be ap...

I looked at your link and added gold to the matrix. Gold over the time range you selected (more than 20 years), has outperformed total international, with a much much lower correlation to US stocks (basically zero). Yet people hate on gold ... Gold, bad. Lowers ulcer index, raises SWR. Internationa...

I would agree that in theory international diversification makes sense. Except, the way we are told to practice it is by buying the global market weight portfolio. Which means most of the money goes into the international megacaps that are 99% correlated with US megacaps. So where is the diversific...

Again, this is a *risky* strategy so I'd bet a very modest % of your portfolio (I'm betting <<5%) if you plan on joining the rest of us fools on this adventure :D , I can't help but think the idea is really good, but 8 or 9 years into a bull market is probably asking for trouble. That said, the bac...

Again, this is a *risky* strategy so I'd bet a very modest % of your portfolio (I'm betting <<5%) if you plan on joining the rest of us fools on this adventure :D , I can't help but think the idea is really good, but 8 or 9 years into a bull market is probably asking for trouble. That said, the bac...

I would agree that in theory international diversification makes sense. Except, the way we are told to practice it is by buying the global market weight portfolio. Which means most of the money goes into the international megacaps that are 99% correlated with US megacaps. So where is the diversifica...

If you invested your 100k into pretty much anything over the last 20 years and contributed 10k/month (which you really should, after all the savings rate is the most important), you'd have ended up with 6-8M: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=1...

This rather brilliant strategy has a small but non-zero chance of a total wipeout. The correct way to deal with this risk is: 1. acknowledge it 2. size the position appropriately 3. periodically take some of the profits off the table HEDGEFUNDIE is currently doing #1 and #2, and is thinking about #3...

If you are in UPRO 100%, you will go down 90% in 2008. How many years of 24% returns does it take to recover from that?

You need an uncorrelated asset, and you need a lot of it.

Pretty sure in the 1970s stocks and bonds went down the drain together for months or years at a time. Also, in your back testing you're starting from 1987 when long term treasuries were probably yielding 8-10%, or from more recent times like 2009-2010 when they were probably yielding at least 4-5%. ...

From August of 2000 (when IJS, small cap value S&P 600) was created thru December of 2018, IJS has a CAGR of 8.55%. IVV (S&P 500) has had a CAGR of 5.7% in that time. So IJS would be worth 43,767 if 10,000 was invested back then and IVV would be worth 27,108. As a result I own NO S&P 500 and have b...

But guess what? You can temporarily increase your allocation to equities occasionally or decrease your allocation to equities temporarily. In those cases, your performance will temporarily be as if you were dollar-cost averaging at that ratio. Are you talking about something like this (market valua...

Compare the returns of gold, international stocks, and intermediate treasuries over the last 25 years. Then ask yourself why gold is bad because "you can't eat it" or "you can't shoot zombies with it", whereas buying intermediate treasuries with a 2% nominal yield and a zero real yield is a totally ...

You should really read "Market Wizards" and other classics in the field to understand why it's not "financial engineering". Basically if you start with 100 wannabe traders, 90 will "blow up" (get fired or lose their life savings) within 5 years. Another 9% will make positive returns, maybe equal to ...

By way of comparison, here is the International "Premium" for 32 years.

US: +9.90, stdev 15.03
Intl: +6.62, stdev 17.78

What's this, then?

Portfolio visualizer is wrong?

Finished! It took a long time to let go of my delusions, and and even longer time to wade through my passive options. Portfoliocharts.com was a big help at sorting out the possibilities. I decided to keep the equal weighting of assets to avoid spending the rest of my life trying to over-optimize the...

Thank you for the input, everyone. This is all rollover IRA money. I got rid of the gold and the extended duration treasuries. Intermediate term treasuries all the way. I wish things were that easy on the equity side. Letting go and being completely passive is harder for me than I thought it would b...

From Lake Louise we did the hike to the tea house at the Plain of Six Glaciers. It was awesome. About an hour, and doable by anyone who's reasonably fit. From the tea house you can eat your lunch and watch (and listen to) avalanches going off. But it was a day trip .. hike in the morning, lunch, ren...

I invested in net-nets back in 2001-2002 when they were briefly available in the US market. High bid-ask spreads. Very little trading volume. Tons of tracking error. So basically if a backtester says the gain for a basket of stocks for the year was 30%, maybe the gain was actually 12% when you accou...

I spent many years as an individual stock picker with a value emphasis. Mostly I outperformed the S&P 500 from 1999 until 2008, and mostly I underperformed since then. Overall, it's a wash -- but it consumed countless hours of time that I'll never get back. Getting older here at 53, I'd really like ...