Re: Golden Butterfly Portfolio
Posted: Thu Aug 11, 2022 2:42 pm
The more and more I reflect on it, the more I'm inclined to say that the GB is the best "default" portfolio out there.
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I feel you. I remember once reading that one of the secret's of Costco's success was to avoid subjecting shoppers with the paradox of choice. Too many choices leads people to not make a decision at all. Sales improved when choices became more limited. People don't want to go through the cognitive work of comparing umpteen different options, so they just throw their hands up instead. At least, that's how the theory goes.whatchamacallit wrote: ↑Thu Aug 11, 2022 4:21 pm That makes it easier having only one value fund option.
I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.
I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.
A good point. VVL, for instance, despite being highly systematic, is a fund that Vanguard considers to be active -- it doesn't follow an index. Nothing explicit to front run.boglerdude wrote: ↑Thu Aug 11, 2022 7:03 pm > I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.
And can be front run, as they are forced to sell by rigid metrics. Paying Vanguard active managers to take a holistic look at a company, and decide if it's "value" isnt a crazy idea. Vanguard rather than a hedge fund celeb/guru because Vanguard is under heavy public scrutiny
Smith1776 wrote: ↑Thu Aug 11, 2022 4:41 pm
whatchamacallit wrote: ↑Thu Aug 11, 2022 4:21 pm
That makes it easier having only one value fund option.
I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.
I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.
I feel you. I remember once reading that one of the secret's of Costco's success was to avoid subjecting shoppers with the paradox of choice. Too many choices leads people to not make a decision at all. Sales improved when choices became more limited. People don't want to go through the cognitive work of comparing umpteen different options, so they just throw their hands up instead. At least, that's how the theory goes.
Have you considered the SCV funds offered by Avantis? They seem to be the bleeding edge option for U.S. investors right now.
I think my favourite is three types of pizza rather than ten.vnatale wrote: ↑Fri Aug 12, 2022 9:06 amIt is more than a theory. I have read of this many times. The usual example is that people buy more when presented with only five choices of jellies than when confronted with 24 choices of jellies.Smith1776 wrote: ↑Thu Aug 11, 2022 4:41 pmI feel you. I remember once reading that one of the secret's of Costco's success was to avoid subjecting shoppers with the paradox of choice. Too many choices leads people to not make a decision at all. Sales improved when choices became more limited. People don't want to go through the cognitive work of comparing umpteen different options, so they just throw their hands up instead. At least, that's how the theory goes.whatchamacallit wrote: ↑Thu Aug 11, 2022 4:21 pm That makes it easier having only one value fund option.
I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.
I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.
Have you considered the SCV funds offered by Avantis? They seem to be the bleeding edge option for U.S. investors right now.
Smith1776 wrote: ↑Fri Aug 12, 2022 4:07 pm
vnatale wrote: ↑Fri Aug 12, 2022 9:06 am
Smith1776 wrote: ↑Thu Aug 11, 2022 4:41 pm
whatchamacallit wrote: ↑Thu Aug 11, 2022 4:21 pm
That makes it easier having only one value fund option.
I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.
I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.
I feel you. I remember once reading that one of the secret's of Costco's success was to avoid subjecting shoppers with the paradox of choice. Too many choices leads people to not make a decision at all. Sales improved when choices became more limited. People don't want to go through the cognitive work of comparing umpteen different options, so they just throw their hands up instead. At least, that's how the theory goes.
Have you considered the SCV funds offered by Avantis? They seem to be the bleeding edge option for U.S. investors right now.
It is more than a theory. I have read of this many times. The usual example is that people buy more when presented with only five choices of jellies than when confronted with 24 choices of jellies.
I think my favourite is three types of pizza rather than ten.
Stuffed crust for the win!
Small cap tend to lag during the lead up to a recession, because the recession measure is a lagged measure (a recession is two consecutive quarters of declining GDP [*A]). By the time the (lagged) recession indicator actually fires SC tend to start rebounding. SC are more of a real-time recession indicator. As you say a nice additional element of economic diversification.Tyler wrote: ↑Sat Jun 06, 2020 9:19 pmFor reference, the thing that eventually pushed me over the top on my own SCV vs SCB debate (I settled on SCV) was when I realized just how different the sector makeup is for SCV vs LCB. Large caps are dominated by tech and healthcare, while small cap value is heavily weighted towards financials and industrials (SCB is a lot more similar to LCB in sector makeup than you'd think). Balance them equally and you get a nice amount of sector diversification on top of the other economic diversification in the portfolio.
GB is a form of 40/60 stock/bond comprised of SCV/TSM for the stock and LTT/TBill/Gold for the 'bonds'.
PV indicates similar outcomes, GB -11.5% compared to -12% for the PP. In the scale of 20 or 30 years a short term single point to point 365 day measure will just fade into insignificance. But such a measure is suggestive of a possible good time to buy or add to either a GB or PP.
If Quicken isn’t lying to me, Gold, LTT, and SCV have all beaten the S&P500 for the last three months (up 18-11%!) and YTD, so, looking better so far!
Are you really sure about that? I know nada about 4GLD however many that claim to be backed by physical and that permit conversion often have criteria/conditions, such as certain sized/amounts only and/or only by certain entities. Push come to shove in a gold-rush and you might be towards the back of the queue only to find none remained by the time it was your turn. Opps sorry, no gold left, we're bankrupt, the queue to sue us is over there. Such that the greatest time to have held (physical) gold was lost to you.
seajay wrote: ↑Mon Jan 23, 2023 9:04 amAre you really sure about that? I know nada about 4GLD however many that claim to be backed by physical and that permit conversion often have criteria/conditions, such as certain sized/amounts only and/or only by certain entities. Push come to shove in a gold-rush and you might be towards the back of the queue only to find none remained by the time it was your turn. Opps sorry, no gold left, we're bankrupt, the queue to sue us is over there. Such that the greatest time to have held (physical) gold was lost to you.
Circumstances during the early phases of a disconnect between physical and paper gold could make it very appealing for funds to lend more of the physical gold they held than usual, leaving less actually available should that progress into a gold-run (high demand for delivery of physical gold ... and subsequent failures to fulfil the demand).
d) No Rights or Beneficial Ownership in the Gold
Purchasers of the Notes will only acquire the rights securitised by the Notes. Purchasers of the Notes will not acquire any title to, or security interests or beneficial ownership in, the physical Gold held in custody on behalf of the Issuer. An investment in the Notes does not constitute a purchase or other acquisition of Gold.
In the event of insolvency of the Issuer, the physical Gold is therefore generally deemed to be part of the insolvency estate. This means that if the Issuer becomes unable to pay or insolvent the claims of the holders of the Notes in respect of the Gold held in custody are not adequately secured (see also risk note "2.1.1.a) Insolvency Risk due to the Limited Assets of the Issuer"). In the event of the Issuer's inability to pay or insolvency, this may even lead to the loss of the entire capital invested by the holders of the Notes when purchasing the Notes.
I've decided to go with SGLD (Invesco Physical Gold ETC Fund) instead of ZGLDUS. Gold fund TER's don't seem to include all the annual cost and the ZKB Gold ETF is probably closer to 0.70% p.a. SGLD is one of the largest funds, with lower annual cost and the possibility of buying in smaller increments.Lucho Jr wrote: ↑Sun Jan 22, 2023 8:40 am Has any non-US investor here implemented a GB portfolio? What ETFs do you use?
I'm currently thining about using the following:
20% Global stocks: SSAC - iShares MSCI ACWI UCITS ETF (Acc) - TER: 0.20%
20% Small Cap Value: USSC (USD ver. of ZPRV) - SPDR MSCI USA Small Cap Value Weighted UCITS ETF (Acc) - TER: 0.30%
20% Long Term Bonds: DTLA - iShares USD Treasury Bond 20+yr UCITS ETF USD (Acc) - TER: 0.07%
20% Short Term Bonds: IB01 - iShares USD Treasury Bond 0-1yr UCITS ETF (Acc) - TER: 0.07%
20% Gold: ZGLDUS - ZKB Gold ETF A (USD) - TER: 0.40%
Looking at how International SCV performed in the past compared to US SCV, I think the international version would change the profile of the GB too much. But for the TSM part, SSAC seems like an ok alternative?
I am not too keen to go full "US-only".
Also, what does everyone use for Gold outside the US? I tend towards the ETF mentioned because it is a real ETF (not ETC), but the fact that the TER is high and it cannot be bought in fractional shares makes it a bit difficult to buy/rebalance to the exactly the necessary amount.