Golden Butterfly Portfolio

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

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LittleDinghy
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Re: Golden Butterfly Portfolio

Post by LittleDinghy » Sun Jun 07, 2020 5:42 pm

Kevin K. wrote:
Sat Jun 06, 2020 11:51 am
A chorus of wise advice here I must say - or rather, ruefully admit, since I sold my SCV at a loss a few weeks back and reverted to the PP from the GB.
We have a similar story. Earlier this year my wife and I moved SCV-invested money from our employer-provided individual HSA accounts to new HSA accounts at Fidelity. The HSA companies requested that we first sell the SCV so we would be transferring cash. By the time the move was complete (it took over a month), equities had bottomed and were heading back up. My wife and I continued to think that equities would take another dive, which they never did. And each of our Fidelity HSA accounts still hold that money in cash. So, we've lost out on some significant gains on that money.

I think our lesson is to stick to the allocation plan; that is, we should have immediately reinvested the money in SCV as soon as the transfer occurred. But maybe we still haven't learned that lesson because with SCV prices being up a lot, we are now reluctant to buy high. So, even now, we aren't sticking to the plan.

Fortunately the HSA amounts are less than 10% of the total SCV investment allocation in our GB portfolio. But still, I think there is a lesson here.

Would love any others' thoughts on this.
pmward
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Re: Golden Butterfly Portfolio

Post by pmward » Sun Jun 07, 2020 5:51 pm

LittleDinghy wrote:
Sun Jun 07, 2020 5:42 pm

I think our lesson is to stick to the allocation plan; that is, we should have immediately reinvested the money in SCV as soon as the transfer occurred. But maybe we still haven't learned that lesson because with SCV prices being up a lot, we are now reluctant to buy high. So, even now, we aren't sticking to the plan.
Just because something is up does not mean it is "high". Can you see your emotional bias coming forth there in that wording? SPY is 5% away from all-time highs. SLYV is still 25% away from all-time highs. Relatively speaking, there's still a lot of room left for SCV to play catch up. If your allocation is to hold 20% SCV, I would just plug your nose and do it. I mean it sounds like you would still be buying in cheaper than you sold, so that should be something you should celebrate and not want to risk missing out on! There are rules in the portfolio for a reason. It's almost a sure bet that whenever you break or bend the rules of your portfolio you're going to live to regret it eventually.
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LittleDinghy
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Re: Golden Butterfly Portfolio

Post by LittleDinghy » Sun Jun 07, 2020 7:59 pm

pmward wrote:
Sun Jun 07, 2020 5:51 pm
Can you see your emotional bias coming forth there in that wording? SPY is 5% away from all-time highs. SLYV is still 25% away from all-time highs. Relatively speaking, there's still a lot of room left for SCV to play catch up. If your allocation is to hold 20% SCV, I would just plug your nose and do it. I mean it sounds like you would still be buying in cheaper than you sold, so that should be something you should celebrate and not want to risk missing out on! There are rules in the portfolio for a reason. It's almost a sure bet that whenever you break or bend the rules of your portfolio you're going to live to regret it eventually.
Thank you for pointing out my emotional bias in my language. And you're right, it probably is still worth less than when we sold it. We'll take a look.
snedgar
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Re: Golden Butterfly Portfolio

Post by snedgar » Mon Jun 08, 2020 11:42 am

sophie wrote:
Sat Jun 06, 2020 3:02 pm
... eventually I realized I was simply letting not so smart people parrot their latest stupid ideas into my head. Don't let that happen! ...
There is so much wisdom here but this is the best quote of the week!

You guys rock!
whatchamacallit
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Re: Golden Butterfly Portfolio

Post by whatchamacallit » Fri Aug 07, 2020 3:15 pm

Sorry for short type. I am on phone.

Anyone else try:
25% each in
Tsm
Scv
Intermediate term treasury
Gld

It tops the portfolio matrix

https://portfoliocharts.com/portfolio/portfolio-matrix/

I love the bit more of simplicity of it. Intermediate treasury is a lot easier to find in retirement accounts.
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Mark Leavy
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Re: Golden Butterfly Portfolio

Post by Mark Leavy » Fri Aug 07, 2020 4:21 pm

whatchamacallit wrote:
Fri Aug 07, 2020 3:15 pm
Sorry for short type. I am on phone.

Anyone else try:
25% each in
Tsm
Scv
Intermediate term treasury
Gld

It tops the portfolio matrix

https://portfoliocharts.com/portfolio/portfolio-matrix/

I love the bit more of simplicity of it. Intermediate treasury is a lot easier to find in retirement accounts.
There is absolutely nothing wrong with that portfolio. It looks pretty sane.

Careful with your metrics, though. It's tough to measure what you get when you reduce cash/bond exposure for more equities.
It almost always makes the numbers better. But there are a lot of real life trade-offs happening there. It isn't just all what you can see in the numbers.

When I war-game against real life, I like to remove cash from the percentages and divide my portfolio up as 5 years living expenses in cash - and then the rest divvied up in LT bonds, Equities and Physical Gold - with exposures to your preference.

EDIT: If you are still working and very confident in your income, then that could replace the cash cushion that I use.
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