Golden Butterfly Portfolio

A place to talk about speculative investing ideas for the optional Variable Portfolio

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rocketdog
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Re: Golden Butterfly Portfolio

Post by rocketdog » Tue Dec 31, 2019 9:51 am

I only keep 60% of my HSA portfolio in the HBPP. I divide up the other 40% by putting 10% each into:
  • Small Cap Value
  • US REIT
  • Foreign Developed Markets
  • Diversified Emerging Markets
Working nicely for me so far.
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mathjak107
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Re: Golden Butterfly Portfolio

Post by mathjak107 » Tue Dec 31, 2019 10:00 am

this year anything with the word "buy" worked nicely
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vnatale
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Re: Golden Butterfly Portfolio

Post by vnatale » Tue Feb 18, 2020 6:23 pm

Tyler wrote:
Mon Apr 11, 2016 10:23 pm
sophie wrote: A question Tyler:  what would you use for rebalance bands?
30/10 is a nice round number.  It's more instinct than science, but it seems reasonable. 

Almost four years later......has your instinct remained the same regarding this?

Vinny
"I only regret that I have but one lap to give to my cats."
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vnatale
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Re: Golden Butterfly Portfolio

Post by vnatale » Tue Feb 18, 2020 6:31 pm

Kbg wrote:
Wed Apr 20, 2016 10:33 am
It's called negatively and weakly correlated assets. The risk mitigation is organically built in not externally derived. I continue to be dumbfounded at the focus on the PPs individual pieces.

The only thing that makes sense to me is a "factor" tilt of some kind. For someone younger I can easily see altering the stock component up to 30 or 35% by taking from gold/LTTs/both. Of course volatility will go up a bit, but not a ton.

Lastly, the portfolio performance profile is entirely visible in the historical returns...stock market strong bull the PP is not fun. Flat to down the PP is awesome. Hit rinse cycle and repeat. Over very long periods of time the results are comparable but WAY more predictable with the PP.
Am I correct in assuming that nearly four years later you hold to the same analysis? Your analysis seems reasonable to me but just checking to see if you still believe the same.

Vinny
"I only regret that I have but one lap to give to my cats."
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Kbg
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Re: Golden Butterfly Portfolio

Post by Kbg » Tue Feb 18, 2020 11:26 pm

vnatale wrote:
Tue Feb 18, 2020 6:31 pm
Kbg wrote:
Wed Apr 20, 2016 10:33 am
It's called negatively and weakly correlated assets. The risk mitigation is organically built in not externally derived. I continue to be dumbfounded at the focus on the PPs individual pieces.

The only thing that makes sense to me is a "factor" tilt of some kind. For someone younger I can easily see altering the stock component up to 30 or 35% by taking from gold/LTTs/both. Of course volatility will go up a bit, but not a ton.

Lastly, the portfolio performance profile is entirely visible in the historical returns...stock market strong bull the PP is not fun. Flat to down the PP is awesome. Hit rinse cycle and repeat. Over very long periods of time the results are comparable but WAY more predictable with the PP.
Am I correct in assuming that nearly four years later you hold to the same analysis? Your analysis seems reasonable to me but just checking to see if you still believe the same.

Vinny
Yes. I do what I call a VP PP...more risk, more growth but based on PP principles.
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Hal
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Re: Golden Butterfly Portfolio

Post by Hal » Wed Feb 26, 2020 8:06 pm

Smith1776 wrote:
Sun Dec 22, 2019 2:13 pm
This recent turn of conversation has me curious as to how much of the GB's outperformance over the PP is due to the SCV tilt, rather than the fact that it has more equity in an absolute sense (40% vs 25%).

I'd like to research into this more. You'd also have to control for the altered levels of gold, cash and bonds.

My first brief glance at the numbers seems to suggest the balance of GB outperformance over the PP may indeed be because of the tilt, rather than the 40% equity.

However, if that's the case, we go back to the gnarly problem of whether or not the factor premiums will persist.

If indeed a SCV tilted PP closes most of the gap in performance against the GB, it'd make me that much more content with the 4 x 25% allocation.
Just resurrecting the SCV topic. I think this series of three lectures on how ETF's are structured explain the outperformance.

https://www.youtube.com/watch?v=xpk3triMLZQ

https://www.youtube.com/watch?v=Ih7bWOSwECU

https://www.youtube.com/watch?v=0JfGplGv3BA

As always, all comments welcome :)
ppnewbie
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Re: Golden Butterfly Portfolio

Post by ppnewbie » Thu Feb 27, 2020 12:46 pm

So I got a little confused - what did Tyler settle on SCV or SCB for 20%.
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Tyler
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Re: Golden Butterfly Portfolio

Post by Tyler » Thu Feb 27, 2020 2:00 pm

ppnewbie wrote:
Thu Feb 27, 2020 12:46 pm
So I got a little confused - what did Tyler settle on SCV or SCB for 20%.
I'm personally using SCV right now. But I've owned SCB in the past and think that also is a good choice. Value has slightly better historical returns but has faded a bit over time, while blend has slightly lower returns but has been more consistent.
Mechanical engineer, history buff, treasure manager... totally not Ben Gates
ppnewbie
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Re: Golden Butterfly Portfolio

Post by ppnewbie » Thu Feb 27, 2020 3:43 pm

On another note. I just checked my GB 401k (which I converted a year ago) and the off kilter gyroscope is still gyrating. Year to Date it's up 14%. Thanks for the reply Tyler.
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TrickPony
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Re: Golden Butterfly Portfolio

Post by TrickPony » Thu Mar 05, 2020 1:25 pm

I just noticed that my VBR is down about 14% for the year, about twice as bad as my large cap VTI. This type of market seems like a good test for the "Golden Butterfly". Still marginally up for the year...Yea.
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Re: Golden Butterfly Portfolio

Post by pmward » Thu Mar 05, 2020 1:50 pm

So far in 2020 both small caps and value in general have been exceptionally weak. This drought for both is indeed pretty crazy, and I don't think anyone would be silly for questioning both small caps and value at this point. I think 40% VTI would not be unreasonable at all if anyone does not have faith in SCV going forward. I've also done some looking into ways to use momentum trend here on the other 20% stock bucket...
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Re: Golden Butterfly Portfolio

Post by sophie » Mon Mar 09, 2020 8:33 am

pmward wrote:
Thu Mar 05, 2020 1:50 pm
So far in 2020 both small caps and value in general have been exceptionally weak. This drought for both is indeed pretty crazy, and I don't think anyone would be silly for questioning both small caps and value at this point. I think 40% VTI would not be unreasonable at all if anyone does not have faith in SCV going forward. I've also done some looking into ways to use momentum trend here on the other 20% stock bucket...
Otherwise known as buying high and selling low. This is how you screw up your portfolio returns. The drop in small caps is a buying opportunity, not an indication to sell them. I suspect they are harder hit than large companies by the chaos in Chinese manufacturing.
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