Ultimate Buy and Hold - 8 slices vs 4

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LongTermInvestor88
Posts: 63
Joined: Mon Dec 25, 2017 9:18 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by LongTermInvestor88 » Sat Sep 21, 2019 2:40 am

I'm wondering if someone could give me some advice with this. I would like to gain more exposure to value and small caps with my portfolio. As someone who is not U.S based the general consensus is to either hold global cap weighting or to split between a developed markets and emerging markets fund. Unfortunately to get my small cap and value exposures I only have a choice of regional funds these are U.S, Europe, Emerging and Japan. I'm happy to hold these as a reflection of the global markets although I will lose some exposure to some countries. My problem is how I decide to allocate weighting to these in portfolio. I could go with an equalish weighting like 30 30 30 10 which in all honesty seems to be the strategy for example in this post or I could split them to reflect global wieghtings ie some thing like 45 35 10 10. The problem I see with this is that as regional weights increase so will my allocations. This in effect will be continuing to buy markets that are increasing in value and not enable the possible advantage of selling high buying low. Would be interested to hear others thoughts on this. Thanks

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Forester
Posts: 704
Joined: Sat Jan 19, 2019 2:50 pm
Location: UK

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by Forester » Sat Sep 21, 2019 3:13 am

LongTermInvestor88 wrote:
Sat Sep 21, 2019 2:40 am
I'm wondering if someone could give me some advice with this. I would like to gain more exposure to value and small caps with my portfolio. As someone who is not U.S based the general consensus is to either hold global cap weighting or to split between a developed markets and emerging markets fund. Unfortunately to get my small cap and value exposures I only have a choice of regional funds these are U.S, Europe, Emerging and Japan. I'm happy to hold these as a reflection of the global markets although I will lose some exposure to some countries. My problem is how I decide to allocate weighting to these in portfolio. I could go with an equalish weighting like 30 30 30 10 which in all honesty seems to be the strategy for example in this post or I could split them to reflect global wieghtings ie some thing like 45 35 10 10. The problem I see with this is that as regional weights increase so will my allocations. This in effect will be continuing to buy markets that are increasing in value and not enable the possible advantage of selling high buying low. Would be interested to hear others thoughts on this. Thanks
On my investment platform there was no Global option, so I equal-weighted 1/3 USA, Europe, Emerging Wisdomtree Smallcap Dividend.

Japan doesn't matter, this would correlate with Europe as being ex-US yet developed. According to the MSCI index literature, Dev Europe is about 50% larger than Emerging but I just equal weight.

LongTermInvestor88
Posts: 63
Joined: Mon Dec 25, 2017 9:18 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by LongTermInvestor88 » Sat Sep 21, 2019 7:55 am

Forester wrote:
Sat Sep 21, 2019 3:13 am
LongTermInvestor88 wrote:
Sat Sep 21, 2019 2:40 am
I'm wondering if someone could give me some advice with this. I would like to gain more exposure to value and small caps with my portfolio. As someone who is not U.S based the general consensus is to either hold global cap weighting or to split between a developed markets and emerging markets fund. Unfortunately to get my small cap and value exposures I only have a choice of regional funds these are U.S, Europe, Emerging and Japan. I'm happy to hold these as a reflection of the global markets although I will lose some exposure to some countries. My problem is how I decide to allocate weighting to these in portfolio. I could go with an equalish weighting like 30 30 30 10 which in all honesty seems to be the strategy for example in this post or I could split them to reflect global wieghtings ie some thing like 45 35 10 10. The problem I see with this is that as regional weights increase so will my allocations. This in effect will be continuing to buy markets that are increasing in value and not enable the possible advantage of selling high buying low. Would be interested to hear others thoughts on this. Thanks
On my investment platform there was no Global option, so I equal-weighted 1/3 USA, Europe, Emerging Wisdomtree Smallcap Dividend.

Japan doesn't matter, this would correlate with Europe as being ex-US yet developed. According to the MSCI index literature, Dev Europe is about 50% larger than Emerging but I just equal weight.
Was there any specific thinking or articles you read that made you conclude that this isn't a bad way to go. Thanks

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Forester
Posts: 704
Joined: Sat Jan 19, 2019 2:50 pm
Location: UK

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by Forester » Sat Sep 21, 2019 8:23 am

LongTermInvestor88 wrote:
Sat Sep 21, 2019 7:55 am
Forester wrote:
Sat Sep 21, 2019 3:13 am
LongTermInvestor88 wrote:
Sat Sep 21, 2019 2:40 am
I'm wondering if someone could give me some advice with this. I would like to gain more exposure to value and small caps with my portfolio. As someone who is not U.S based the general consensus is to either hold global cap weighting or to split between a developed markets and emerging markets fund. Unfortunately to get my small cap and value exposures I only have a choice of regional funds these are U.S, Europe, Emerging and Japan. I'm happy to hold these as a reflection of the global markets although I will lose some exposure to some countries. My problem is how I decide to allocate weighting to these in portfolio. I could go with an equalish weighting like 30 30 30 10 which in all honesty seems to be the strategy for example in this post or I could split them to reflect global wieghtings ie some thing like 45 35 10 10. The problem I see with this is that as regional weights increase so will my allocations. This in effect will be continuing to buy markets that are increasing in value and not enable the possible advantage of selling high buying low. Would be interested to hear others thoughts on this. Thanks
On my investment platform there was no Global option, so I equal-weighted 1/3 USA, Europe, Emerging Wisdomtree Smallcap Dividend.

Japan doesn't matter, this would correlate with Europe as being ex-US yet developed. According to the MSCI index literature, Dev Europe is about 50% larger than Emerging but I just equal weight.
Was there any specific thinking or articles you read that made you conclude that this isn't a bad way to go. Thanks
Other things I own are inevitably US-heavy, so by over-weighting Europe a little and Emerging a little more, I owning more of what's very cheap. SCV is 20% of my portfolio. Research Affiliates are bullish on EM equities most of all, then EAFE, then USA; https://interactive.researchaffiliates. ... allocation

rascott
Posts: 1419
Joined: Wed Apr 15, 2015 10:53 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by rascott » Wed Oct 30, 2019 6:38 am

Mdr87 wrote:
Wed Sep 18, 2019 8:06 pm
Hello,

I am interested in doing a 4 slice portfolio in my Roth IRA. I currently have a Roth IRA at Schwab and a 403b through Mass Mutual with horrible fund options. I invest 100% of my 403b contributions into an SP500 index fund, MIEAX. As of now, I currently have about 38k in my 403b and 35k in my Roth IRA. I am only going to do the 4 slice portfolio in my Roth, as it is not possible to achieve anything close to this in my 403b with the fund options available. How would you guys recommend I do this? What fund would you recommend I use in my Schwab account and at what allocations? I am interested in using ETF's.

Thank you!
VTI
SLYV
EFV
FNDC

If you are following the Merriman formula.

snailderby
Posts: 805
Joined: Thu Jul 26, 2018 11:30 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by snailderby » Wed Oct 30, 2019 9:13 am

I understand that TrevH's original suggestion was a four-way split between:

U.S. LCB
U.S. SCV
Int'l LCV
Int'l SCB

Now that Avantis has an international small cap value fund, what are people's opinions on replacing...

Int'l LCV (e.g., EFV - 0.38% ER) and
Int'l SCB (e.g., VSS - 0.12% ER)

...with...

Int'l LCB (e.g., VXUS - 0.09% ER) and
Int'l SCV (e.g., AVDV - 0.36% ER)?

Here are the Morningstar numbers for EFV/VSS:

P/E 12.85
P/B 1.16
ROA 4.22
ROE 11.68
Average Market Cap $7.6 million

And for VXUS/AVDV:

P/E 11.68
P/B 1.26
ROA 5.34
ROE 13.91
Average Market Cap $5.8 million

(Alternatives to AVDV include FNDC, DLS, and DLS's dynamic currency hedged cousin, DDLS.)

slipr
Posts: 8
Joined: Fri Feb 14, 2020 7:10 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by slipr » Fri Feb 14, 2020 7:29 am

can someone spell out the acronym "ITT" in TevH's post for a newcomer?

thanks

Trev H wrote:
Tue Jun 02, 2009 5:30 am

Below are the summary stats and notice that holding higher risk / higher expected return components does not = a more risky portfolio. Risk measures included = StDev (Volatility), Sharpe Ratio (Risk Adjusted Return), and Bear Market results (down side risk).

Code: Select all

====================================
............................12.5% LB
............................12.5% SV
..............30.0% TSM....12.5% ILV
..............30.0% ILB....12.5% ISB
..............40.0% ITT....50.0% ITT
====================================
10K Growth...395,509.48...659,512.62
CAGR...............9.63........11.04
StDev.............11.60........10.02
Sharpe.............0.39.........0.58
====================================
Bear Market Comparison..............
====================================
1973..............-8.18........-6.38
1974.............-12.96........-9.18
2000..............-2.24........+7.35
2001..............-6.32........-0.58
2002..............-5.15........-0.87
2008.............-19.01.......-13.02
====================================
===

james22
Posts: 1513
Joined: Tue Aug 21, 2007 2:22 pm

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by james22 » Fri Feb 14, 2020 11:19 am

Intermediate-term Treasuries, slipr.

slipr
Posts: 8
Joined: Fri Feb 14, 2020 7:10 am

Re: Ultimate Buy and Hold - 8 slices vs 4

Post by slipr » Sat Feb 15, 2020 12:51 pm

tnx alot

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