Wow! Just discovered "Portfolio Visualizer".

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1210sda
Posts: 1380
Joined: Wed Feb 28, 2007 8:31 am

Wow! Just discovered "Portfolio Visualizer".

Post by 1210sda » Sun May 20, 2018 12:42 pm

I'm kind of late on this, but I just discovered PV.

Just so many tools. It's hard to know where to begin.

Out of curiosity, I first tried the "Historical Efficient Frontier". I used both the Boglehead's 3 fund portfolio and Stocks/Bonds 60/40 (essentially the Vanguard Balanced Index Fund). Wanted to see if they fell on the efficient frontier line. Well, the 60/40 did and the 3FP didn't. It was the international stocks that kept the 3FP from being "efficient".

Does this mean that the 3FP isn't efficient? That the proxy for total international (Global ex-US Market) is not correct? That the available history of returns (from 1987) is inadequate, or that the efficient frontier is not meaningful? Other?

I would appreciate feedback on ways you have used PV. I really like the ability it provides to download results to an excel spreadsheet.

Thanks

1210

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AtlasShrugged?
Posts: 549
Joined: Wed Jul 15, 2015 6:08 pm

Re: Wow! Just discovered "Portfolio Visualizer".

Post by AtlasShrugged? » Sun May 20, 2018 12:47 pm

My advice: Keeping playing with PV. Lots of good stuff there. I use the Monte Carlo functionality.

You might want to complement your PV play with Portfolio Charts (portfoliocharts.com). I really like it for the complex visualizations. I seem to recall some guy, Tyler 9000, has something to do with it. What I will say is that the data visualization on that site is simply outstanding. I do not say that lightly; I work with a number of professionals in the data visualization field. PV is a winner.
“If you don't know, the thing to do is not to get scared, but to learn.”

venkman
Posts: 584
Joined: Tue Mar 14, 2017 10:33 pm

Re: Wow! Just discovered "Portfolio Visualizer".

Post by venkman » Sun May 20, 2018 8:42 pm

1210sda wrote:
Sun May 20, 2018 12:42 pm
Does this mean that the 3FP isn't efficient? That the proxy for total international (Global ex-US Market) is not correct? That the available history of returns (from 1987) is inadequate, or that the efficient frontier is not meaningful? Other?
Efficient frontier backtesting is kinda like asset class backtesting--it tells you what the optimum portfolio WAS for a given time period, not what it will be in the future.

The 3FP wasn't designed to be the most efficient possible portfolio. It was designed to be the SIMPLEST possible portfolio that provided low cost and wide diversification, and was suitable for most individual investors.

dbr
Posts: 27064
Joined: Sun Mar 04, 2007 9:50 am

Re: Wow! Just discovered "Portfolio Visualizer".

Post by dbr » Sun May 20, 2018 8:58 pm

I think these things are intellectually interesting but as practical investing goes optimizing portfolio performance in whatever sense one takes that to be is tilting at windmills. <--- That is an opinion. Don't ask for proof because I don't have a quantified definition of TaWMs.

That does not mean there is not insight to be gained from contemplating results that can be generated in PV. It is in fact a marvelous application.

Angst
Posts: 1737
Joined: Sat Jun 09, 2007 11:31 am
Location: St Louis, MO

Re: Wow! Just discovered "Portfolio Visualizer".

Post by Angst » Sun May 20, 2018 9:40 pm

Yes, a site well worth spending some time at.
https://www.portfoliovisualizer.com/

UpperNwGuy
Posts: 534
Joined: Sun Oct 08, 2017 7:16 pm
Location: Washington DC

Re: Wow! Just discovered "Portfolio Visualizer".

Post by UpperNwGuy » Mon May 21, 2018 1:58 am

OP makes two points:
1. That Portfolio Visualizer is wonderful tool.
2. That Total International has lagged Total Stock in the recent past.

I agree on both points. Nevertheless, I am keeping my three fund portfolio. There are numerous lengthy threads here on BH that make the case for international. I won’t repeat the reasons here.

Grt2bOutdoors
Posts: 18464
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Wow! Just discovered "Portfolio Visualizer".

Post by Grt2bOutdoors » Mon May 21, 2018 9:23 am

UpperNwGuy wrote:
Mon May 21, 2018 1:58 am
OP makes two points:
1. That Portfolio Visualizer is wonderful tool.
2. That Total International has lagged Total Stock in the recent past.

I agree on both points. Nevertheless, I am keeping my three fund portfolio. There are numerous lengthy threads here on BH that make the case for international. I won’t repeat the reasons here.
Things can stay cheap for a long time. Things can also remain expensive for a long time. The only way to ensure you are there ALL of the time, is to maintain ownership stakes in all asset classes. It's the proportion owned that can make or break a portfolio's return vs. the benchmark. If you are fine with deviating from the benchmark return both upside and downside, then stay the course. Owning broad based index funds ensures you are in all sectors of the market.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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