How about US mid-caps?

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ochotona
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How about US mid-caps?

Post by ochotona » Sun Jul 24, 2016 8:42 pm

If you look at portfoliovisualizer.com or Portfoliocharts.com, US mid-caps really seem to be long-term outperformers. I am going to make sure I always have a generous slice of the mid-caps in my allocation. The PP with mid-caps backtests very well. Past performance no guarantee of future blah blah blah.
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Re: How about US mid-caps?

Post by Dieter » Sun Jul 24, 2016 9:05 pm

I assume familiar with Mel Lindenauers 'Unloved Mid-Caps' on Bogleheads?

The original (2000) : http://socialize.morningstar.com/NewSoc ... ageIndex=1

Discussions from 2014 (https://www.bogleheads.org/forum/viewtopic.php?t=137723) and 2015 (https://www.bogleheads.org/forum/viewtopic.php?t=169637)

Why I don't worry when folks say that Vanguard Small Cap Value is not as 'Small' as can be.
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ochotona
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Re: How about US mid-caps?

Post by ochotona » Sun Jul 24, 2016 9:24 pm

Nice old threads, the academic debate goes on while investors pocket gains for decades.
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Re: How about US mid-caps?

Post by dualstow » Mon Jul 25, 2016 9:14 am

My pp's stock portion is 27.7% VIMAX (Vanguard's midcap blend). That wasn't a calculated move. I had a midcap and a smallcap index fund pre-pp, and lazily moved them over to the stock portion instead of starting from scratch. Good enough.
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Re: How about US mid-caps?

Post by dualstow » Tue Jul 26, 2016 7:37 pm

I was just looking through Vanguard's fund performances for funds that I own, YTD. REITs did nearly twice as well as Midcaps.
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ochotona
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Re: How about US mid-caps?

Post by ochotona » Tue Jul 26, 2016 7:40 pm

dualstow wrote:I was just looking through Vanguard's fund performances for funds that I own, YTD. REITs did nearly twice as well as Midcaps.
Agreed. I have a fantastic REIT in my HSA, symbol FREAX. 100% of my HSA is in FREAX. I'm applying dual momentum to manage it in case of a crash.
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Re: How about US mid-caps?

Post by dualstow » Tue Jul 26, 2016 7:42 pm

Of course, looking at 3, 5, 10-year returns, things start to really smooth out. As long as you're in an index, things turn out well.
These are the months that I wish I were in an all-stock portfolio. Cut to November, and maybe I won't be feeling that. >:D
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Tyler
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Re: How about US mid-caps?

Post by Tyler » Mon Aug 08, 2016 3:58 pm

You'll probably enjoy this -- MCV and MCG are now in the Portfolio Charts calculators.

https://portfoliocharts.com/2016/08/08/ ... t-updates/
PortfolioCharts.com : Find a portfolio to love
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Re: How about US mid-caps?

Post by dualstow » Mon Aug 08, 2016 8:26 pm

Awesome, Tyler.

In addition to the new calculator options, I'm lovin' the fruit analogy. And to think I spent time over the weekend using the digital color meter app and google images to get RGB values of nice colors for my spreadsheet cells. From fruit. Wasteful, I know, but my point is that I could have got half of them from your new page. O0
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Re: How about US mid-caps?

Post by MachineGhost » Mon Aug 08, 2016 8:41 pm

I never really looked at it before, but that Portfolio Finder is almost genius!

Of course, what's missing is a rational basis for clustering the assets. ;)
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Re: How about US mid-caps?

Post by Reub » Mon Aug 08, 2016 9:59 pm

Thank you for what you do, Tyler!
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Re: How about US mid-caps?

Post by Dieter » Mon Aug 08, 2016 11:52 pm

There goes (went) my evening. :) Yes, Mid-Cap well represented, esp. at the higher minimum returns.

The least painful portfolios with at least a 4% 15 year REAL CAGR (where did I get that 4%? :) all had:
* 40% stock (if inc. REIT as stock)
(20% SCV or MCV)
* 40% Bonds (if inc. TMM/Cash as bond)
* 20% Gold

Golden Butterfly-ish for the win! :)

By min CAGR, least pain portfolio:

* 4% min: LCV, SCV, ITT, STT, GLD (4.4% CAGR; -8.7% worst year)

* 5% min: MCB, SCV, TBM, LTT, GLD (5.2% CAGR; -9.8% worst year)

- Not that much more painful than the 4% least painful

- Change TBM to STT: 5.1% CAGR; -9.9% worst year

- Worst year jumps 50% (-10.7% to -15.5%) when min CAGR moved from 5.4% to 5.5 (5.6) %
(basically where jump from 40% to 60% stocks, REIT as Stocks)

* 6% min: Intl SM, TBM, LTT, REIT (6.1% CAGR, -20.1% Worst Year)
(E-gads, the tracking error; double worst year vs 5% min CAGR)

* 7% min CAGR, 1 portfolio total: MCV, Intl SM, LTT, REIT (7% CAGR; -26% worst year)
(from 50% stocks to 75% stocks)

Misc observations in top 10 by CAGR at the above levels:
* Almost no intl before ~5.8% CAGR
* TBM appeared more than expected
* Gold basically disappeared starting at 5.9%
* Not much LTT at the 4% level
* Exclude gold: volatility jumps; INTL & TIPS instead
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