HEDGEFUNDIE's excellent adventure Part II: The next journey

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
sfmurph
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by sfmurph » Sun Jan 12, 2020 7:35 pm

Thinking about taxes on these, specifically for the leveraged bond funds. Normally, bond funds are recommended in tax deferred accounts due to the regular dividend yield. But for the leveraged funds like TMF & UBT (20 year) and TYD & UST (7-10 year), they have distributions in the 0.9% range. So the gains should be LTGC, assuming that they can be held for long periods. I think that it may be useful to have some in taxable and some in tax-advantaged, with the rebalancing kept in the tax advantaged space. It would be OK to have some in each, in order to have a larger overall exposure.

Am I thinking about this right?

columbia
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by columbia » Sun Jan 12, 2020 7:44 pm

DrRocktor wrote:
Sun Jan 12, 2020 8:06 am
For those holding PSLDX in their portfolio, how are you utilizing it? Is it in combination with or instead of UPRO/TMF?
Roth in Vanguard. It’s my entire Roth, in fact. It’s about 35% of overall portfolio and the rest is in TIAA Traditional + treasuries.

Is kind of like a mutant Larry Portfolio . 😀

DrRocktor
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by DrRocktor » Sun Jan 12, 2020 8:24 pm

columbia wrote:
Sun Jan 12, 2020 7:44 pm
DrRocktor wrote:
Sun Jan 12, 2020 8:06 am
For those holding PSLDX in their portfolio, how are you utilizing it? Is it in combination with or instead of UPRO/TMF?
Roth in Vanguard. It’s my entire Roth, in fact. It’s about 35% of overall portfolio and the rest is in TIAA Traditional + treasuries.

Is kind of like a mutant Larry Portfolio . 😀
I'm reassured you have been able to buy it in your Roth. I opened a Roth at ally for the purpose of investing in PSLDX. Based on their interface, however, it is difficult to determine if I can (a) purchase it and (b) what the minimum investment would be.

Does anyone know about the specifics of investing in PSLDX through a Roth at ally?

-DR
"Don't Panic" - The Hitchhiker's Guide to the Galaxy

columbia
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by columbia » Sun Jan 12, 2020 8:25 pm

DrRocktor wrote:
Sun Jan 12, 2020 8:24 pm
columbia wrote:
Sun Jan 12, 2020 7:44 pm
DrRocktor wrote:
Sun Jan 12, 2020 8:06 am
For those holding PSLDX in their portfolio, how are you utilizing it? Is it in combination with or instead of UPRO/TMF?
Roth in Vanguard. It’s my entire Roth, in fact. It’s about 35% of overall portfolio and the rest is in TIAA Traditional + treasuries.

Is kind of like a mutant Larry Portfolio . 😀
I'm reassured you have been able to buy it in your Roth. I opened a Roth at ally for the purpose of investing in PSLDX. Based on their interface, however, it is difficult to determine if I can (a) purchase it and (b) what the minimum investment would be.

Does anyone know about the specifics of investing in PSLDX through a Roth at ally?

-DR
As an FYI, the minimum initial at Vanguard is $25k.

rascott
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by rascott » Sun Jan 12, 2020 8:36 pm

DrRocktor wrote:
Sun Jan 12, 2020 8:24 pm
columbia wrote:
Sun Jan 12, 2020 7:44 pm
DrRocktor wrote:
Sun Jan 12, 2020 8:06 am
For those holding PSLDX in their portfolio, how are you utilizing it? Is it in combination with or instead of UPRO/TMF?
Roth in Vanguard. It’s my entire Roth, in fact. It’s about 35% of overall portfolio and the rest is in TIAA Traditional + treasuries.

Is kind of like a mutant Larry Portfolio . 😀
I'm reassured you have been able to buy it in your Roth. I opened a Roth at ally for the purpose of investing in PSLDX. Based on their interface, however, it is difficult to determine if I can (a) purchase it and (b) what the minimum investment would be.

Does anyone know about the specifics of investing in PSLDX through a Roth at ally?

-DR
$100 min, $9.⁹⁵ fee

getjiggy
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by getjiggy » Sun Jan 12, 2020 9:37 pm

firebirdparts wrote:
Sun Jan 12, 2020 12:03 pm
I’ve never know which rules apply in a 401k but minimum never seems to apply
Have talked to fidelity couple of occasions and they confirmed that pimco imposed $1M min for initial investment for PSLDX. Adding to existing position is ok. But $50 fee. Did u initiate in fidelity or just added to prev held position?

moptop
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by moptop » Sun Jan 12, 2020 9:54 pm

I'm doing the excellent adventure half and half taxable and roth IRA and not counting it in my asset allocation.

I'm going to hold psldx in my roth or 401k if I can get it. I'm going to consider it my US large cap holding. In taxable I think I'm goong to add ntsx. These both will be part of my normal asset allocation.

stormcrow
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by stormcrow » Mon Jan 13, 2020 9:19 am

langlands wrote:
Sat Jan 11, 2020 5:37 pm
For instance, if your savings can keep pace with your UPRO growth, you can just keep putting it in bonds to deleverage and you'll never have to sell your UPRO. This seems to me a massive tax advantage of leveraged ETFs over futures, conditional on you being able to balance things right.
This is what I have been doing thus far, occasionally picking up TMF/TYD shares to balance the UPRO. Working well so far.

dspencer
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by dspencer » Mon Jan 13, 2020 9:32 am

I am officially out of UPRO/TMF/EDV and my Roth IRA is now 100% PSLDX. My main motivation is just to stop the urge to constantly research and tinker with my portfolio. I also had some minor complaints with M1 and now everything is back in one place. The returns were great and I could see one day getting back in the adventure in the right circumstances. Thanks to Hedgefundie and others for all the good information.

Lee_WSP
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Mon Jan 13, 2020 10:58 am

I'm $300 away from the minimum. I guess I'll just go do a conversion and then I can join the PSLDX bandwagon in Roth.

redstar
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by redstar » Mon Jan 13, 2020 11:07 am

Lee_WSP wrote:
Mon Jan 13, 2020 10:58 am
I'm $300 away from the minimum. I guess I'll just go do a conversion and then I can join the PSLDX bandwagon in Roth.
Yeah, I’m just waiting to cross the $25k threshold in my Roth IRA at Vanguard to go into PSLDX. It just seems like a lot less hassle compared to moving the Roth account and worrying about rebalancing quarterly.

stipeman
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by stipeman » Mon Jan 13, 2020 3:54 pm

Minimum for PSLDX in IRA is $0 at TD Ameritrade and Etrade. $25K at Vanguard. $100K at Schwab. Increased from $100K to $1M at Fidelity last year.

Fidelity is not being honest if they say it is PIMCO's fault.

jubby288
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by jubby288 » Mon Jan 13, 2020 4:48 pm

stipeman wrote:
Mon Jan 13, 2020 3:54 pm
Minimum for PSLDX in IRA is $0 at TD Ameritrade and Etrade. $25K at Vanguard. $100K at Schwab. Increased from $100K to $1M at Fidelity last year.

Fidelity is not being honest if they say it is PIMCO's fault.
Can confirm, this is the reason i transferred all of my IRA assets to TDA

Busdrvr
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Busdrvr » Mon Jan 13, 2020 7:43 pm

Just opened my TDA account. They will not charge a $49 fee for PSLDX transactions if you set up systematic investments in an IRA. Will probably look at switching my kids’ IRA’s to TD for them to take advantage.

getjiggy
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by getjiggy » Mon Jan 13, 2020 7:50 pm

stipeman wrote:
Mon Jan 13, 2020 3:54 pm
Minimum for PSLDX in IRA is $0 at TD Ameritrade and Etrade. $25K at Vanguard. $100K at Schwab. Increased from $100K to $1M at Fidelity last year.

Fidelity is not being honest if they say it is PIMCO's fault.
Confirmed with Fidelity again today on the $1M min 'initial' investment for any of their accounts. Talked to PIMCO as well and they confirmed that this min 'initial' investment is Fidelity's imposition and could be part of agreement with PIMCO that they couldn't confirm. This is a bummer for folks with Fidelity 401K Brokeragelink and wanting to invest in PSDLX. Not sure how poster firebirdparts got around this!!!

TeeDee
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by TeeDee » Mon Jan 13, 2020 8:01 pm

Firstrade has PSLDX commission free with $500 minimum.

Busdrvr
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Busdrvr » Mon Jan 13, 2020 8:02 pm

getjiggy wrote:
Mon Jan 13, 2020 7:50 pm
stipeman wrote:
Mon Jan 13, 2020 3:54 pm
Minimum for PSLDX in IRA is $0 at TD Ameritrade and Etrade. $25K at Vanguard. $100K at Schwab. Increased from $100K to $1M at Fidelity last year.

Fidelity is not being honest if they say it is PIMCO's fault.
Confirmed with Fidelity again today on the $1M min 'initial' investment for any of their accounts. Talked to PIMCO as well and they confirmed that this min 'initial' investment is Fidelity's imposition and could be part of agreement with PIMCO that they couldn't confirm. This is a bummer for folks with Fidelity 401K Brokeragelink and wanting to invest in PSDLX. Not sure how poster firebirdparts got around this!!!

Yes, I called Fido as well as I have BL access through workplace 401..They said “ not gonna happen”. I believe it was available there at an earlier date.

jubby288
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by jubby288 » Tue Jan 14, 2020 6:25 am

Busdrvr wrote:
Mon Jan 13, 2020 7:43 pm
Just opened my TDA account. They will not charge a $49 fee for PSLDX transactions if you set up systematic investments in an IRA. Will probably look at switching my kids’ IRA’s to TD for them to take advantage.
Good to know!

DrRocktor
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by DrRocktor » Tue Jan 14, 2020 7:11 am

rascott wrote:
Sun Jan 12, 2020 8:36 pm
DrRocktor wrote:
Sun Jan 12, 2020 8:24 pm
columbia wrote:
Sun Jan 12, 2020 7:44 pm
DrRocktor wrote:
Sun Jan 12, 2020 8:06 am
For those holding PSLDX in their portfolio, how are you utilizing it? Is it in combination with or instead of UPRO/TMF?
Roth in Vanguard. It’s my entire Roth, in fact. It’s about 35% of overall portfolio and the rest is in TIAA Traditional + treasuries.

Is kind of like a mutant Larry Portfolio . 😀
I'm reassured you have been able to buy it in your Roth. I opened a Roth at ally for the purpose of investing in PSLDX. Based on their interface, however, it is difficult to determine if I can (a) purchase it and (b) what the minimum investment would be.

Does anyone know about the specifics of investing in PSLDX through a Roth at ally?

-DR
$100 min, $9.⁹⁵ fee
I can confirm that Ally has a $100 minimum + $9.95 fee for PSLDX through Roth
"Don't Panic" - The Hitchhiker's Guide to the Galaxy

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firebirdparts
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by firebirdparts » Tue Jan 14, 2020 9:58 am

getjiggy wrote:
Mon Jan 13, 2020 7:50 pm


Confirmed with Fidelity again today on the $1M min 'initial' investment for any of their accounts. Talked to PIMCO as well and they confirmed that this min 'initial' investment is Fidelity's imposition and could be part of agreement with PIMCO that they couldn't confirm. This is a bummer for folks with Fidelity 401K Brokeragelink and wanting to invest in PSDLX. Not sure how poster firebirdparts got around this!!!
Evidently I was just an early adopter.
A fool and your money are soon partners

Saaybogle
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Saaybogle » Tue Jan 14, 2020 10:24 am

Sorry if I've missed it in the massive amount of good information provided here, but what is an alternative portfolio to use if one wants to take this adventure but can't buy either UPRO or TMF? Thanks.

muffins14
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by muffins14 » Tue Jan 14, 2020 11:51 am

VTI and BND ;)

Can you not purchase any leveraged fund, or PSLDX?

sweetnpsycho
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by sweetnpsycho » Wed Jan 15, 2020 9:30 am

Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.

pepys
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by pepys » Wed Jan 15, 2020 9:40 am

sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
I've been using Fidelity and Merrill for the adventure. Schwab should work too.
"Give me enough leverage and a fund on which to place it, and I shall move the world"

Lee_WSP
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Wed Jan 15, 2020 9:48 am

sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Ever since TD Ameritrade did it, most everyone's dropped their trading fees. It's kind of a double edged sword though. No more tiny rail guards to prevent me from putting in a ton of trades.

guyinlaw
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by guyinlaw » Wed Jan 15, 2020 10:25 am

sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Stay away from Merrill. They block too many ETFs I want to buy.. (NTSX, Avantis etc) Most of money is moved to Schwab.

Busdrvr
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Busdrvr » Wed Jan 15, 2020 2:32 pm

sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Takes me less than 5 minutes to accomplish each backdoor maneuver at Schwab.

jaj2276
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by jaj2276 » Wed Jan 15, 2020 2:38 pm

sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Ugh, I'm in the same boat. Deposited my 2020 contribution on Jan 2nd and emailed customer support requesting the conversion. They wrote back with the $25 conversion fee (I knew about this) and that my funds would be subject to a 6-day AML hold. Not sure why that was really an issue (it's never an issue with other brokerages) and it's not like I'm withdrawing the money out of M1 Finance.

Regardless, it's now Jan 15 and the conversion still hasn't happened. I've sent an email requesting an update and I have yet to get a response.

Once I get this 2020 contribution moved over I'll start looking around for a different brokerage and pay the account closing fee.

Busdrvr
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Busdrvr » Wed Jan 15, 2020 5:03 pm

I would like to elicit opinions from some of you smart investors regarding options for my kids’ Roth accounts. We have two who have minimal Vanguard Target Retirement funds and a third who we are currently in the process of establishing and funding. Two are still in school plus one recent college grad. All have earned income.

After seeing the recent performance of these Vanguard funds I would like to consider moving these Roth’s somewhere where I could invest all or a portion of the amounts in a strategy like Hedgefundie’s Adventure or in PSLDX.

I welcome any advice on the reasons for or against this strategy and realize that there are significant pitfalls like volatility and being susceptible to rising rates which may require a change in strategy down line. I appreciate all the great information that you have provided here. :sharebeer

Lee_WSP
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Location: Arizona

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Wed Jan 15, 2020 6:19 pm

Busdrvr wrote:
Wed Jan 15, 2020 5:03 pm
I would like to elicit opinions from some of you smart investors regarding options for my kids’ Roth accounts. We have two who have minimal Vanguard Target Retirement funds and a third who we are currently in the process of establishing and funding. Two are still in school plus one recent college grad. All have earned income.

After seeing the recent performance of these Vanguard funds I would like to consider moving these Roth’s somewhere where I could invest all or a portion of the amounts in a strategy like Hedgefundie’s Adventure or in PSLDX.

I welcome any advice on the reasons for or against this strategy and realize that there are significant pitfalls like volatility and being susceptible to rising rates which may require a change in strategy down line. I appreciate all the great information that you have provided here. :sharebeer
From 1969 to 1980 PSLDX would have netted a measly 2.58% CAGR (-4.74% real) vs S&P 6.46% (-1.14% real).

Of course, the Excellent Adventure does far worse at a -2.3% CAGR (-9% real)

Across 10 year cycles, the bottom 5% of PSLDX is -5%, S&P is -3.39%, and the Excellent Adventure is -10.48%.

As long as you are okay with those drawdowns, whichever brokerage charges the lowest fees & offers the best web portal is good for the adventure & I believe Ally is best for PSLDX with the lowest minimums & fees.

DrRocktor
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by DrRocktor » Wed Jan 15, 2020 6:50 pm

Lee_WSP wrote:
Wed Jan 15, 2020 6:19 pm
Busdrvr wrote:
Wed Jan 15, 2020 5:03 pm
I would like to elicit opinions from some of you smart investors regarding options for my kids’ Roth accounts. We have two who have minimal Vanguard Target Retirement funds and a third who we are currently in the process of establishing and funding. Two are still in school plus one recent college grad. All have earned income.

After seeing the recent performance of these Vanguard funds I would like to consider moving these Roth’s somewhere where I could invest all or a portion of the amounts in a strategy like Hedgefundie’s Adventure or in PSLDX.

I welcome any advice on the reasons for or against this strategy and realize that there are significant pitfalls like volatility and being susceptible to rising rates which may require a change in strategy down line. I appreciate all the great information that you have provided here. :sharebeer
From 1969 to 1980 PSLDX would have netted a measly 2.58% CAGR (-4.74% real) vs S&P 6.46% (-1.14% real).

Of course, the Excellent Adventure does far worse at a -2.3% CAGR (-9% real)

Across 10 year cycles, the bottom 5% of PSLDX is -5%, S&P is -3.39%, and the Excellent Adventure is -10.48%.

As long as you are okay with those drawdowns, whichever brokerage charges the lowest fees & offers the best web portal is good for the adventure & I believe Ally is best for PSLDX with the lowest minimums & fees.
There have been several discussions, starting around post #1068 , on the pre 1982 time period and underperformance of a UPRO/TMF strategy, specifically in regards to how it was impacted by changes in bond rates. I assume this would be the case with PSLDX as well. Just be aware of this when drawing any conclusions from data pre-1982.

-DR
"Don't Panic" - The Hitchhiker's Guide to the Galaxy

ltdshred
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by ltdshred » Thu Jan 16, 2020 2:47 pm

So the 55-45 TQQQ-TMF strategy (the one I'm in) is up 11% YTD compared to the SP500's 1.8% YTD and January isn't even over. This is wild

Lee_WSP
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Thu Jan 16, 2020 2:49 pm

ltdshred wrote:
Thu Jan 16, 2020 2:47 pm
So the 55-45 TQQQ-TMF strategy (the one I'm in) is up 11% YTD compared to the SP500's 1.8% YTD and January isn't even over. This is wild
Considering that TMF was brushing up against 6 month lows on the first, that is not surprising. TLT is up 3% YTD. Also, SPY is up 1.97% YTD.

vijaym73
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by vijaym73 » Thu Jan 16, 2020 11:59 pm

Just wanted to make everyone aware that you can invest in PSLDX with Ally invest. Minimum of $100 to buy
I will be accumulating this in my taxable account as my retirement accounts are already filled with this excellent adventure

schismal
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by schismal » Fri Jan 17, 2020 4:50 am

vijaym73 wrote:
Thu Jan 16, 2020 11:59 pm
Just wanted to make everyone aware that you can invest in PSLDX with Ally invest. Minimum of $100 to buy
I will be accumulating this in my taxable account as my retirement accounts are already filled with this excellent adventure
I would never hold PSLDX in a taxable account. It has enormous distributions. Vanguard doesn't even allow the purchase of this fund in taxable accounts.

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Robert T
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Robert T » Fri Jan 17, 2020 11:12 am

schismal wrote:
Fri Jan 17, 2020 4:50 am
vijaym73 wrote:
Thu Jan 16, 2020 11:59 pm
Just wanted to make everyone aware that you can invest in PSLDX with Ally invest. Minimum of $100 to buy
I will be accumulating this in my taxable account as my retirement accounts are already filled with this excellent adventure
I would never hold PSLDX in a taxable account. It has enormous distributions. Vanguard doesn't even allow the purchase of this fund in taxable accounts.
10 year annualized returns to end 2018

18.73% = PSLDX (before tax)
12.16% = PSLDX (after tax)
13.12% = S&P500 Index

https://www.pimco.com/en-us/investments ... -fund/inst

Kbg
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Kbg » Fri Jan 17, 2020 11:26 am

Has NTSX vs PSLDX been analyzed?

Lee_WSP
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Fri Jan 17, 2020 11:40 am

Kbg wrote:
Fri Jan 17, 2020 11:26 am
Has NTSX vs PSLDX been analyzed?
Not exactly the same, but it gives you an idea of how they *should have* performed historically.

https://www.portfoliovisualizer.com/bac ... ion4_1=100

As expected, PSLDX is higher risk, higher reward. But that's what you get with more leverage.

vijaym73
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by vijaym73 » Fri Jan 17, 2020 12:35 pm

How are these distributions taxed ?

I have more than enough capital gain losses from my daytrading attempt last me a lifetime

Would they just go against the losses ?

If not, then i agree its not worth holding in taxable account

thanks

VJ

Lee_WSP
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Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Fri Jan 17, 2020 12:56 pm

vijaym73 wrote:
Fri Jan 17, 2020 12:35 pm
How are these distributions taxed ?

I have more than enough capital gain losses from my daytrading attempt last me a lifetime

Would they just go against the losses ?

If not, then i agree its not worth holding in taxable account

thanks

VJ
They are taxed as normal income. Distributions are not capital gains (short or long term). They are just income.

EngineerEd
Posts: 33
Joined: Fri Aug 02, 2013 3:56 pm

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by EngineerEd » Fri Jan 17, 2020 6:33 pm

jaj2276 wrote:
Wed Jan 15, 2020 2:38 pm
sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Ugh, I'm in the same boat. Deposited my 2020 contribution on Jan 2nd and emailed customer support requesting the conversion. They wrote back with the $25 conversion fee (I knew about this) and that my funds would be subject to a 6-day AML hold. Not sure why that was really an issue (it's never an issue with other brokerages) and it's not like I'm withdrawing the money out of M1 Finance.

Regardless, it's now Jan 15 and the conversion still hasn't happened. I've sent an email requesting an update and I have yet to get a response.

Once I get this 2020 contribution moved over I'll start looking around for a different brokerage and pay the account closing fee.
Similar experience here with M1 Finance as you two did.

I was irked by the idea of having to pay a 25 dollar fee to do the backdoor conversion, so instead I deposited my $6K 2020 contribution to my Vanguard traditional IRA and did the (free) backdoor conversion there. A week later the funds freed up from Vanguard and requested the transfer to M1 Finance Roth IRA. This took yet another week, just had the funds arrive today, will be invested into the excellent adventure allocation on Tuesday (Monday being MLK day).

Had I known it would take nearly 3 weeks for the whole shebang, I would've gone with Schwab or Fidelity. I really just wish Vanguard would take the training wheels off and allow leveraged ETFs just so I'd have fewer accounts to maintain and keep watch over.

Lee_WSP
Posts: 1358
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by Lee_WSP » Fri Jan 17, 2020 7:58 pm

EngineerEd wrote:
Fri Jan 17, 2020 6:33 pm
jaj2276 wrote:
Wed Jan 15, 2020 2:38 pm
sweetnpsycho wrote:
Wed Jan 15, 2020 9:30 am
Is there a good alternative to M1 Finance for a Roth IRA account that allows free buying and selling of leveraged ETFs? I don't mind rebalancing manually.

I'm trying to do a backdoor Roth. With M1 Finance, there is no way to do it automatically with a click of a button. I have to go through customer support and have to pay a $25 fee and the customer support is atrocious. It has been almost 2 weeks and the money is still sitting in my traditional IRA account. And If I try to do a manual rollover, it would charge me $100.
Ugh, I'm in the same boat. Deposited my 2020 contribution on Jan 2nd and emailed customer support requesting the conversion. They wrote back with the $25 conversion fee (I knew about this) and that my funds would be subject to a 6-day AML hold. Not sure why that was really an issue (it's never an issue with other brokerages) and it's not like I'm withdrawing the money out of M1 Finance.

Regardless, it's now Jan 15 and the conversion still hasn't happened. I've sent an email requesting an update and I have yet to get a response.

Once I get this 2020 contribution moved over I'll start looking around for a different brokerage and pay the account closing fee.
Similar experience here with M1 Finance as you two did.

I was irked by the idea of having to pay a 25 dollar fee to do the backdoor conversion, so instead I deposited my $6K 2020 contribution to my Vanguard traditional IRA and did the (free) backdoor conversion there. A week later the funds freed up from Vanguard and requested the transfer to M1 Finance Roth IRA. This took yet another week, just had the funds arrive today, will be invested into the excellent adventure allocation on Tuesday (Monday being MLK day).

Had I known it would take nearly 3 weeks for the whole shebang, I would've gone with Schwab or Fidelity. I really just wish Vanguard would take the training wheels off and allow leveraged ETFs just so I'd have fewer accounts to maintain and keep watch over.
At least you can do a conversion...

viewer0
Posts: 111
Joined: Tue Jun 12, 2018 7:46 pm

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by viewer0 » Sat Jan 18, 2020 9:20 am

A different idea : want some critique. This thread has been discussing 3x ETFs. When a 3x bull is combined with a 3x bear, in equal proportion, the net return is negative. So why not short the combination ? e.g. SPXL: SPXS 50/50 - short both. Possible ?

Backtest for the past 10 years :

Portfolio Returns
Portfolio performance statistics
Portfolio Initial Balance Final Balance CAGR Stdev Best Year Worst Year Max. Drawdown Sharpe Ratio Sortino Ratio US Mkt Correlation
Portfolio 1 $10,000 $5,401 -5.41% 4.86% 2.96% -15.95% -47.84% -1.23 -1.22 0.34

ChrisBenn
Posts: 30
Joined: Mon Aug 05, 2019 7:56 pm

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by ChrisBenn » Sat Jan 18, 2020 10:14 am

You are trying to harvest the volatility decay with this ETF inverse pair portfolio. Probably the cost of borrowing (shorting) the securities + cost of leverage will kill any positive return. You would need to leverage this up greatly to make any meaningful money (you basically depend on the two being perfectly -1 correlated, so the actual risk when holding two is zero, so leverage is safe). Best case (which you would never realize as an individual) is leveraging at the risk free rate.

So basically expected return - risk free rate (which would probably be lower than your actual cost) - borrowing rate; I think that's going to be negative - if it's positive you can leverage it up as much as your credit line and security borrowing liquidity allow.

This would probably be rebalance sensitive; I don't know what the liquidity on the borrowing side is for leveraged etf's.

You might be better off theoretically looking at an etf pair that has historically traded more sideways - if there is liquidity there. You could probably do something with options as well - a synthetic short instead of an actual one - but that would again heavily depend on what kind of liquidity there was on the options market.

I think this would be an interesting theoretical thing to model (python, quandl), or paper trade - but in real life (where what you care about is the total returns, not cleverness) a two fund portfolio is going to probably beat this in any factor (stdev, drawdow, return, etc.) you care to optimize the ratio for.

viewer0
Posts: 111
Joined: Tue Jun 12, 2018 7:46 pm

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Post by viewer0 » Sat Jan 18, 2020 2:33 pm

cost of borrowing
Why would there be a cost of borrowing ? I am not borrowing any money. Are you talking about the opportunity cost that would be incurred when the brokerage holds the cash that I could have invested ?
Thanks for the detailed response, @ChrisBenn.

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