Paul Merriman UBH vs Vanguard Mkt Cap model

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ZachFinch76
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Paul Merriman UBH vs Vanguard Mkt Cap model

Post by ZachFinch76 » Tue Jun 11, 2019 12:05 pm

Hi

I know this is a basic subject that has been discussed a lot in different ways. But I would like some fresh perspective. I am at a bit of a crossroads, I have a decent size portfolio and I want to make some decisions about where I park most of the liquid assets I have. I have been building into VTSAX/VTIAX for about a year but the Ultimate buy and hold has been pulling me. It is more complex, and it clearly believes in the concept of value tilting while still doing wide market passive indexing. I am not sure which way to go. VTSAX/VTIAX is a simple concept,but if I can add slightly more return with a little more complexity I am ok with.

Please give me your thoughts I really appreciate it

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by livesoft » Tue Jun 11, 2019 12:14 pm

Do both or a hybrid. All you have to do is add VSIAX and VFSAX and Bob's your uncle and Fanny's your aunt. That's also staying in the V**AX family.
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by oldcomputerguy » Tue Jun 11, 2019 12:15 pm

You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by rascott » Tue Jun 11, 2019 2:29 pm

oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).

I'll tell you what's lazy about that link.... they are comparing apples and oranges. The UBH on there is a 60/40 split between equities/bonds.... other portfoilios on there are 90/10.... then they throw the SP500 up as it's supposed to be some type of benchmark.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by rascott » Tue Jun 11, 2019 2:33 pm

ZachFinch76 wrote:
Tue Jun 11, 2019 12:05 pm
Hi

I know this is a basic subject that has been discussed a lot in different ways. But I would like some fresh perspective. I am at a bit of a crossroads, I have a decent size portfolio and I want to make some decisions about where I park most of the liquid assets I have. I have been building into VTSAX/VTIAX for about a year but the Ultimate buy and hold has been pulling me. It is more complex, and it clearly believes in the concept of value tilting while still doing wide market passive indexing. I am not sure which way to go. VTSAX/VTIAX is a simple concept,but if I can add slightly more return with a little more complexity I am ok with.

Please give me your thoughts I really appreciate it


Agree with the hybrid model. Look at Trev's 4 fund solution on here that provides basically the same small/value tilt and performance without needing 8-10 funds.

viewtopic.php?t=38374

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by onthecusp » Tue Jun 11, 2019 3:13 pm

I still have much of my portfolio in the UBH, and have not rearranged it due to a "stay the course" tendency. If small / value or some other part has underperformed I've added to it and hardly want to move to the next best thing just because that sounds better, market timing away just as that may come in.

But it is complicated, some of the recommended funds were not available to me, some seemed to have high expenses etc. It was a very interesting exercise at the time, but the complication makes it harder to maintain over my mix of 401k, IRAs, and taxable accounts along with a company stock allocation. To do it over, I would certainly also consider Trev's version. When I make a major overhaul it will probably be to 3 fund with a little tilt to Small Cap Value as something easy to implement and maintain.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by willthrill81 » Tue Jun 11, 2019 3:20 pm

I see more upside potential with the UBH portfolio than the 3-fund, and I don't see it being likely that the UBH would lag the 3-fund over the long-term. But that's just my take on it, and if you deviate from a TSM approach, you should be prepared to underperform TSM at some point, perhaps for a number of years.
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Miriam2 » Tue Jun 11, 2019 3:54 pm

oldcomputerguy wrote: You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
Maybe I'm missing the date, but this table linked here doesn't clearly say the returns are "as of" a certain date.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by GLState » Tue Jun 11, 2019 4:20 pm

If you click on one of the portfolios, you will be taken to a list of the portfolio's components and recent returns along with the "as of" date.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by DesertInvestor » Tue Jun 11, 2019 5:36 pm

Across multiple accounts I'm doing essentially:

75% stock (70/30 US/Int)
25% total bond mkt index/cash

Out of stocks I'm doing 5% VSS (vanguard small international etf) and 15% small value tilt (VIOV and SLYV) in each account to make it simple and not overly complicate rebalancing. I'm a big fan of Merriman, he influenced my mild departure from the three fun portfolio as I don't mind tinkering.

Is this a hybrid approach maybe?

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by rustymutt » Tue Jun 11, 2019 8:59 pm

rascott wrote:
Tue Jun 11, 2019 2:29 pm
oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).

I'll tell you what's lazy about that link.... they are comparing apples and oranges. The UBH on there is a 60/40 split between equities/bonds.... other portfoilios on there are 90/10.... then they throw the SP500 up as it's supposed to be some type of benchmark.
Yeah, I agree that's it's not as simple as the writer suggest. Bonds or fixed income would have a negative effect on recent portfolios. But there's a reason for having bonds.
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Dialectical Investor » Tue Jun 11, 2019 9:18 pm

Miriam2 wrote:
Tue Jun 11, 2019 3:54 pm
oldcomputerguy wrote: You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
Maybe I'm missing the date, but this table linked here doesn't clearly say the returns are "as of" a certain date.
The table doesn't clearly say anything useful. I wouldn't waste my time.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by heyyou » Wed Jun 12, 2019 5:10 am

Trev h's four fund will serve well, and its components are conveniently located at Vanguard (VG).

Trev's Four Fund uses VG's imprecise boundaries on its funds to an advantage, whereas other fund providers with more precise fund boundaries have to add slivers of other focused funds in order to get similar exposure.

The marketing illusion is that more precision will somehow produce more returns. At the micro level, there are just businesses, all trying to be successful, and we all know how pickers of individual stocks perform.

Would someone with a Morningstar subscription please post the 3x3 X-rays of Merriman's, Trev h's, and TSM allocations?

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by palaheel » Wed Jun 12, 2019 6:57 am

heyyou wrote:
Wed Jun 12, 2019 5:10 am

Would someone with a Morningstar subscription please post the 3x3 X-rays of Merriman's, Trev h's, and TSM allocations?
Registering with Morningstar gets you free access to Instant X-Ray. Morningstar doesn't spam me, though I used my "for spam" email address when I registered. I almost never generate only one style box. Something tweaks my interest and I wind up with four or five.
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Jack FFR1846 » Wed Jun 12, 2019 7:10 am

oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
This is pretty typical of Paul's choices. I read a lot of his stuff a while ago and admired his diligent math works and explanation of exactly what he was doing and why. Then when stacked up against just about any listing of similar portfolios, his choices lose out to even mid pack. From the link above, you can see that simply choosing the S&P, you could have obliterated Paul's choices.

Stick with a 3 fund. As soon as you move away from "Don't do something, just stand there", you lose.
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Jags4186 » Wed Jun 12, 2019 7:25 am

Jack FFR1846 wrote:
Wed Jun 12, 2019 7:10 am
oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
This is pretty typical of Paul's choices. I read a lot of his stuff a while ago and admired his diligent math works and explanation of exactly what he was doing and why. Then when stacked up against just about any listing of similar portfolios, his choices lose out to even mid pack. From the link above, you can see that simply choosing the S&P, you could have obliterated Paul's choices.

Stick with a 3 fund. As soon as you move away from "Don't do something, just stand there", you lose.
Yes by simply choosing the SP500 you would have outperformed a 60/40 portfolio.

The reality is that when you slice and dice some part of your portfolio will underperform. Since 2010 the SP500 has been one of the best performing asset classes. So a portfolio weighted away from the SP500 did not do as well.

If you compare the 100% equity UB&H portfolio returns from 2000-2009 with the SP500 you would see the UB&H returned 7.3% annually and the SP500 returned -1% annually and a 50/50 split of SP500/Total International Index returned 0.72% annually.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Dialectical Investor » Wed Jun 12, 2019 7:55 am

Jack FFR1846 wrote:
Wed Jun 12, 2019 7:10 am
oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
This is pretty typical of Paul's choices. I read a lot of his stuff a while ago and admired his diligent math works and explanation of exactly what he was doing and why. Then when stacked up against just about any listing of similar portfolios, his choices lose out to even mid pack. From the link above, you can see that simply choosing the S&P, you could have obliterated Paul's choices.

Stick with a 3 fund. As soon as you move away from "Don't do something, just stand there", you lose.

(Underline added.)

The link indicates no such thing.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by rascott » Wed Jun 12, 2019 8:08 am

Jack FFR1846 wrote:
Wed Jun 12, 2019 7:10 am
oldcomputerguy wrote:
Tue Jun 11, 2019 12:15 pm
You might find this page from Marketwatch interesting. It's a comparison of recent returns from eight "lazy" portfolios, including Mr. Merriman's UBH (it's labelled as "Fundadvice" in the chart).
This is pretty typical of Paul's choices. I read a lot of his stuff a while ago and admired his diligent math works and explanation of exactly what he was doing and why. Then when stacked up against just about any listing of similar portfolios, his choices lose out to even mid pack. From the link above, you can see that simply choosing the S&P, you could have obliterated Paul's choices.

Stick with a 3 fund. As soon as you move away from "Don't do something, just stand there", you lose.
Disagree. You are looking at a 10 year period only....one where US large cap growth was the best asset class.

I ran it back to the mid 90s (When he started it).....and his portfolio beat the TSMI by about 1.5% CAGR. Even from 2000 it beats it.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by Rick Ferri » Wed Jun 12, 2019 8:10 am

If you DIY, you should KIS.

:)
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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by heyyou » Wed Jun 12, 2019 11:14 pm

At some point, with a slice and dice portfolio with numerous slices, there is very little separate reblancing due to any given slice not being far out of balance when compared to the portfolio, just skewed relative to the other slices. The investor can slowly rebalance with contributions or withdrawals depending upon whether employed or retired. Consider the impact of a 1% quarterly WD on the single highest growth slice of six 10% stock slices in a 60/40 allocation. Even I can do that math.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by saintsfan342000 » Thu Jun 13, 2019 5:47 am

UBH is ridiculous, IMO, because it's comprised of eight to ten different equity funds! Add on 2-3 more funds for fixed income. That's way more than "a little more" complexity. If you want to tilt, add some Vanguard small value (VSIAX) and International small (VFSAX) to what you're already doing.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by S_Track » Thu Jun 13, 2019 6:36 am

saintsfan342000 wrote:
Thu Jun 13, 2019 5:47 am
UBH is ridiculous, IMO, because it's comprised of eight to ten different equity funds! Add on 2-3 more funds for fixed income. That's way more than "a little more" complexity. If you want to tilt, add some Vanguard small value (VSIAX) and International small (VFSAX) to what you're already doing.
I think at one point this year Paul came out with a 2 fund for life which is similar to your suggestion. Just add some small cap value to a VG target date fund.

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Re: Paul Merriman UBH vs Vanguard Mkt Cap model

Post by rascott » Thu Jun 13, 2019 10:06 am

saintsfan342000 wrote:
Thu Jun 13, 2019 5:47 am
UBH is ridiculous, IMO, because it's comprised of eight to ten different equity funds! Add on 2-3 more funds for fixed income. That's way more than "a little more" complexity. If you want to tilt, add some Vanguard small value (VSIAX) and International small (VFSAX) to what you're already doing.

As mentioned above....he's been aware of the criticism of making it too complicated....and has a two fund solution that will likely come close to the UBH. A Vanguard TDF + SCV fund.

Also he really advocates M1 Finance for people just starting (or you could roll over to it from elsewhere). You can click a link and get the entire UBH portfolio setup in about 30 seconds and be done. He also has created his own version of TDFs via M1, which are a good bit more aggressive for younger investors than than TDFs from Vangurad and other firms.

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