Portfolios - When Harry met Benjamin

[Hal]

May be best just to use a MSCI World Fund? Can't model it directly on Portfolio Charts though...

I actually added that option early this year. In the portfolio interface, look for the dropdown below "WLD". The default is XUS, but it also has a DEV option. That will switch everything in the row to Developed World funds (including the US). In that setting, TSM will be equivalent to MSCI World.

Thanks Tyler,
And here I was thinking if Australia was selected, WLD-Dev = MSCI World Ex Australia *Slaps Self*
Hal, read the asterisk that says "All Developed"

Once again, appreciate your making such a great portfolio tool.

[Hal]

And in a Japanese Deflationary environment.....

[pmward]

And in a Japanese Deflationary environment.....

Dead last in average return, close to last in longest drawdown, and in the bottom half of safe and perpetual withdrawal rate. Considering this is the market environment the globe is in right now, that does not look promising.

[Smith1776]

The stale performance of the Japan environment is all the more reason why I think diversifying amongst international factors is beneficial. Historically, when market beta has had negative premiums, it has typically resulted in positive premiums for size, value, momentum, etc. I rather lament that here in Canada we don't have easy access to alternative premia like reinsurance risk.

Having said that, I think that no matter the portfolio you choose, there can be a state of the world where that portfolio performs poorly for an extended period of time. You can have portfolios that are more well built (like the PP), but nothing is truly immune to disappointing periods of returns.

Vinny, yeah I agree with your observation about politics taking over the Other Discussions part of the forum. Obviously I don't want to shut down what other people want to talk about. It's not my first choice for topic of discussion though.

[Hal]

You are correct, with the limited choices from a typical retirement fund, the returns in a "Japanese environment" look poor.
Replacing the 35% Cash with bonds helps a little....

Update: Quote on when to use cash instead of bonds
ps: Far right chart column is total fees

[Hal]

And when applied to the US market, the results look decidedly "Golden Butterflyish"

Portfolio 1 is Benjamin Graham plus gold. Note: Intermediate Treasuries used - Read Intelligent Investor re US Market
Portfolio 2 is the PP

[Hal]

And on reading a Vanguard Paper for Australia....

50/50 Split Aus/International Shares for 38% Total,
38% Cash
24% Gold