A new Portfolio for My Graduating Grad School Students

[bedraggled]

My kids have a 40 year investing horizon.

When I wake early, I play with Peaktotrough.com and have been investigating many portfolio allocations and rebalancing bands.

I ask for opinions on a revved up portfolio: maybe 33/33/33 with rebalancing every 3 years.  I notice a max drawdown in the past 43 years of 32.75%.  The CAGR of 10.25% appeals- and they have 40 years.  This is, I think, the extreme but they are young.

Regarding the drawdown, I think many of of got clobbered in 2008-2009 and we survived.  I had an 80% clobbering in the hyper-NASDAQ portion of my investments.  (The advisor said to hang in there).  I figure if I can survive an 80% drawdown on 1/5 of what I had at age 53,  the young ones should be OK with a 32.75% MaxDD.

I have no desire to use 2x and 3x time ETFs. MediumTex warned of decay.  Of course, any arrangement could be split between the HBPP and VP portfolios.  Several here have suggested splitting the portfolio according to age.  My thought, then: start at 23% HBPP and 77% VP @ 33/33/33.

I see the 4x25 rebalanced every 3 years still had a MaxDD of 31.16% with a CAGR of 9.87%.  Why not go for a possible 10.25% and skip the 4x25?

I imagine Roth IRAs will be used, also.

Finally, I understand the CAGR in each case is nominal.  If real return is pertinent, let the discussion begin.



Thanks in advance.

[Pointedstick]

The reason for preferring 4x25 over 3x33 is for the cash. Liquidity is important, especially for broke grad students just starting out their lives. CAGR isn't everything; while it's true that in theory a higher CAGR will yield you more money if you invest 100% consistently over that 40-year time period; nobody actually does this. The portfolio will inevitably be used for expenses between now and retirement (apartment security deposit, car purchase, medical emergency, house down payment, seed money for surprise entrepreneurial venture that's too good to pass up, etc). Without cash, you'd have to withdraw money from one of the volatile assets, either selling at a loss, or paying capital gains taxes.

[bedraggled]

PS,

Thanks.

To clarify, this will be $$$ after their living expenses are dealt with.  There will be money aside for contingencies.

[D1984]

My kids have a 40 year investing horizon.

When I wake early, I play with Peaktotrough.com and have been investigating many portfolio allocations and rebalancing bands.

I ask for opinions on a revved up portfolio: maybe 33/33/33 with rebalancing every 3 years.  I notice a max drawdown in the past 43 years of 32.75%.  The CAGR of 10.25% appeals- and they have 40 years.  This is, I think, the extreme but they are young.

Regarding the drawdown, I think many of of got clobbered in 2008-2009 and we survived.  I had an 80% clobbering in the hyper-NASDAQ portion of my investments.  (The advisor said to hang in there).  I figure if I can survive an 80% drawdown on 1/5 of what I had at age 53,  the young ones should be OK with a 32.75% MaxDD.

I have no desire to use 2x and 3x time ETFs. MediumTex warned of decay.  Of course, any arrangement could be split between the HBPP and VP portfolios.  Several here have suggested splitting the portfolio according to age.  My thought, then: start at 23% HBPP and 77% VP @ 33/33/33.

I see the 4x25 rebalanced every 3 years still had a MaxDD of 31.16% with a CAGR of 9.87%.  Why not go for a possible 10.25% and skip the 4x25?

I imagine Roth IRAs will be used, also.

Finally, I understand the CAGR in each case is nominal.  If real return is pertinent, let the discussion begin.


Thanks in advance.

With US stocks where they are in terms of PE/10 (or Tobin's Q, or GDP to total market cap, or net replacement value of assets to market cap...pick your poison) and US Treasury bond yields as low as they are, I sure hope you aren't expecting 10.25% CAGR. I don't think there has ever been a period when both US bonds and US equities are as pricy as they are now...even the late 1960s/early 70s weren't quite so bad IIRC (and during those years gold was still relatively "cheap".

The general rule is that over the (very) long term, equities return 6 to 7% real, LTTs about 2% to 2.5% real, cash returns whatever the inflation rate is, and gold returns (depending on whom you ask) anywhere from whatever the inflation rate is to maybe 1% above the inflation rate (again, all of these are over the long term....obviously each asset could return more or less than that on an annual basis but over the long term the returns average out to pretty close to what I mentioned above). Over the last 40 years, equities, bonds, gold, and cash all returned more than that and could just as easily correct by returning less than that for the next twenty to forty years

OK, so now let's say inflation averages 2% over the next 40 years. That means equities return 8% to 9%, LTTs return 4% to 4.5% (which is funny considering where yields are now), gold returns 2% to 3%, and cash (or very short term Treasuries) returns roughly 2%. Unrebalanced, that works out to 4% to 5% nominal.

Even if inflation is 4%, the unrebalanced average nominal return will only be 6% to 7%.

I don't know what kind of rebalancing bonus/Shannon's demon/volatility capture premium exists for a regularly rebalanced portfolio of the above assets (if indeed it exists at all) but I suspect it's not enough to turn a 4% or 5.5% or even 7% CAGR into a 10.25% CAGR.

So unless you are either expecting very high inflation (in order to achieve a nominal return of 10% given the above portfolio you'd require near double digit inflation....and that means that nominal 10.25% return will be just like you earned a nominal 5% return in a more normal inflationary environment) or stocks to have another 1980s to 1990s bull market where 1% CAGR was the norm (and bonds to do the same as they did from 1982 to 2014 despite yielding less than 3% now but over 14% in the early 1980s), or else I suspect you will be disappointed.

My advice? This is going to sound rather "stock jockyish" and "Bogleheadish"  so I'm probably going to be judged guilty of heresy by some of the board members on this forum, but here it is:

With 40 years to go until they touch it (and with other liquid cash set aside for contingencies), go with a higher equity allocation (do keep some gold and bonds but nowhere near 33% or 25% starting out)....if you have a large enough amount to make it worthwhile, slice and dice by selecting some US equities (perhaps even further slice and dice by a dividend focused fund, large cap growth, large cap value, and small cap value...for the value slice even consider going with an focused active manager like Oakmark Select or MassMutual Select Focus or even a small slice to Fairholme....or a focused index alternative like TWM's DVP), some EM equities (use one of the EM dividend ETFs), some EAFE equities (via an ETF), some gold mining shares (via an ETF), and something like PHDG that will do well even when everything else stinks (2002 or 2008 or mid-2011 come to mind). Rebalance annually (or annually plus 1 day so it's as much LTCG as possible) and TLH as appropriate.

After about the first 10-15 years, slowly make the portfolio more conservative each year; increase the portion dedicated to gold, bonds, and perhaps even cash by a percent or so each year and decrease the portion allocated to equities.

I wish I could tell you the going with a 33/33/33 (because it would likely suffer less of a maxDD than the abovementioned allocation) would be fine and that it would likely return 10%+ but with valuations/yields at their current levels I think that would be fanciful and wishful thinking...the only way you are getting 10.25% nominal is probably to have a higher allocation to assets like equities (including those that aren't popular right now....US equities have had a nice run over the past five years but EM and EAFE not so much).

[bedraggled]

D1984,

Thanks.

10.25% CAGR?  Good point. 

I am looking to maximize return.  We all know real return is the important number. 

I am looking at Fed taxes as an important piece of this puzzle, ergo the 2 or 3 year rebalancing.  Maybe the 40/10 bands are OK with LTCGs.

I would prefer the 4x25 for the kids but is that the most tax effective?  And the 40 year perspective.  I need to read more pertinent threads.  The kids may be using Roth IRAs but I still want to think about the taxes.  And what if they land in New York State where we are now.  Whoa!

I need to read your reply again later and get more out of it.

Thanks for the great reply.

[Pointedstick]

My advice? This is going to sound rather "stock jockyish" and "Bogleheadish"  so I'm probably going to be judged guilty of heresy by some of the board members on this forum, but here it is:

With 40 years to go until they touch it (and with other liquid cash set aside for contingencies), go with a higher equity allocation (do keep some gold and bonds but nowhere near 33% or 25% starting out)....if you have a large enough amount to make it worthwhile, slice and dice by selecting some US equities (perhaps even further slice and dice by a dividend focused fund, large cap growth, large cap value, and small cap value...for the value slice even consider going with an focused active manager like Oakmark Select or MassMutual Select Focus or even a small slice to Fairholme....or a focused index alternative like TWM's DVP), some EM equities (use one of the EM dividend ETFs), some EAFE equities (via an ETF), some gold mining shares (via an ETF), and something like PHDG that will do well even when everything else stinks (2002 or 2008 or mid-2011 come to mind). Rebalance annually (or annually plus 1 day so it's as much LTCG as possible) and TLH as appropriate.

I quite agree. Historically stocks have done the best over the long haul, and if this is basically a trust fund for your kids' luxury expenses four decades in the future, then there's no huge problem if the value fluctuates a lot between now and then. A stock-heavy boglehead-ish portfolio has a lot to recommend it for this situation.

However I disagree with D1984 about making it more conservative after only 10-15 years. Stocks have done crappily for that long in the past. I would say to wait at least 20 years, potentially more if a large number of the first years yield poor stock returns. If you want to make the CAGR game work for stocks, you need to have the kind of time horizon that it sounds like you do.

[bedraggled]

THanks, PS.

THis has been a worthwhile topic for me to post, as I had hoped.

[D1984]

However I disagree with D1984 about making it more conservative after only 10-15 years. Stocks have done crappily for that long in the past. I would say to wait at least 20 years, potentially more if a large number of the first years yield poor stock returns. If you want to make the CAGR game work for stocks, you need to have the kind of time horizon that it sounds like you do.

PS,

That's an excellent point. When I wrote that,  I was torn between immediately (starting after the first year) making it more conservative each year vs not switching any more to gold and bonds for the whole 40 years (i.e. if you start with 10% each in gold and bonds, after each rebalancing there should still be only 10% each in gold and bonds...even at year 39 and 40); 10-15 years seemed like a compromise (and it would only be a tiny portion of the portfolio getting more conservative each year...1% at a time for the risk-off assets). My main concern was that the thing might do well for 10-20 years and then we have another 2008 but this time it lasts more than the Oct 2007-March 2009 crash. I agree that what you suggested makes more sense (especially the part about if stocks do poorly for the first 20 years or so...then in that case, wait and stay mostly in equities and let regression to the mean do its work; if they do well by year 20, then go ahead and take some profits off the table and DON'T let regression to the mean do its work!).

I really need to run a backtest (admittedly with SWAGs for PHDG before 2004 since I don't have that data) to see how such a portfolio would've done from , say, 2000 to the present (or at least until the end of 2014). I know the DD in 2008 would be huge but based on the assets I mentioned, the recovery would be pretty solid after the late 2008/early 2009 lows.

[bedraggled]

PS and D1984,

You people are good.  It's great to read these returns from this morning's post.

Thanks again

[craigr]

Regarding the drawdown, I think many of of got clobbered in 2008-2009 and we survived.  I had an 80% clobbering in the hyper-NASDAQ portion of my investments.  (The advisor said to hang in there).  I figure if I can survive an 80% drawdown on 1/5 of what I had at age 53,  the young ones should be OK with a 32.75% MaxDD.

The problem is that each person has much different temperament in terms of risk and loss aversion. I'd say that easily 99% of all investors could never survive watching an 80% decline without panicking.

I've found repeatedly that the biggest mistake investors make is underestimating their true tolerance for risk. It's one thing to read what a 25% loss is on paper, but another entirely to watch your account in real time sink by 25% and *not knowing if it is going to stop there*.

The last part is the most important because when you look at these losses you know they stopped eventually, but in the midst of the crash you don't know where the bottom is.

This is why I strongly encourage investors to widely diversify and invest on the more conservative side until they can figure out where they truly lie on the risk spectrum. I've known guys you thought were truly steely nerved risk takers totally panic at 5% loss. Then others you thought were timid calmly ride out 25% losses and not even worry about it.

Consider too that 40 years into the future is a long time and a lot can happen. Just think back 40 years ago in the U.S all that happened, and then 40 years before that! Stocks may not do best as they have not in many countries.

I'd start myself with a simple allocation and then let the child decide what is they want. Even then, expect them to second guess everything you suggest and get pulled into some bad investments eventually.

Honestly, the best thing you can hope for is for them to invest badly young and get really and truly badly burned. Maybe lose everything, or most of it. Then they learn the lesson early and move on from there. The worst thing is for them to get cocky positive feedback at a young age and continue doing very risky things until they get older, then get burned and have less time to recover.

[barrett]

First and foremost, great for you to be thinking about getting your kids started out on a good investing path. I hope to do the same with our daughter in a few years.

A couple of things to ponder...

"Cash for contingencies" doesn't really seem to cover how life actually unfolds for most people. Obviously the 4X25 allocation is really unusual even if all you are looking at is the cash component. But most people have a constant need for cash throughout their entire lifetime. The sequence will vary for everyone but, over time, you are looking at paying for big expenses like houses, kids, kids' college, etc. And there are the unavoidable everyday expenses of food, utilities and many of the good things that life has to offer that are not completely free. In short having a big allocation to cash allows people to live their lives AND cover contingencies like losing a job, taking advantage of a great business opportunity, or whatever.

Also, while I don't think a larger allocation to stocks is necessarily a terrible idea, you have to assign at least some probability to the possibility that the US stock market/economy goes through a Japan-style deflation. Right now we are looking at terrible performance for Japanese stocks for the last quarter of a century. In a similar situation your young kids could be 50 years old and still waiting for their bull market in stocks.

Remember that when you started posting here, you were thinking about tilting toward a heavier LTT allocation. All scenarios are worth pondering but anything that strays too far out of line from the 4X25 PP seems to me to be exposing an investor to quite a bit more risk. Not trying to unthinkingly promote the PP, just relating where my own thought exercises have led me.

To Craig's point, for anyone who lived through late 2008 and early 2009, we should remember that as an excruciating 6-7 months when nobody had a clue what the bottom was for stocks.

[WiseOne]

Bedraggled, kudos to you if you truly managed to ride out an 80% drawdown without panic selling.  I was in a similar situation, having taken some very bad advice from an investment professional.  I saw a nearly $100K retirement fund evaporate to only about $6K at the lowest level.  It came back to around $12K or so and then I sold it off so I could get it out of that brokerage, where the fees were astronomical compared to the online places like Fidelity.

I never made that money back entirely, but the lessons I learned were priceless.  I've got something of a reputation here for vigorously defending the conservative, vanilla 4x25 PP, and this experience is why.  That  investment professional knew more about the markets than I could hope to learn, and had the very best of intentions and plenty of backtesting "proving" his plan would work.

Teaching your kids to invest wisely and not follow the latest fads is absolutely wonderful, and I hope they can learn from you rather than from the school of hard knocks.  This is probably a lot more important than trying to squeeze out a bit more CAGR which, as you know, might never actually materialize.

[bedraggled]

Thank you all.

Fortunately, that 80% hit was on only 1/5 of the portfolio. 

The appeal of the HBPP is their are proven guidelines.  The worst that can happen, as barrett pointed out, is the Iceland event where those investors came out "just OK." (Unless there are those who consider Iceland a horror story). Gold, @ 25%, appeared to save the day in Iceland.  And barrett and I have discussed the Japan scenario before.

So, yes, though I think I would like to be overweighted in LTT in my own situation, the 4x25 is probably best for me. 

That 40 year stretch, though, for depositing money in the kids' accounts has me wondering:  can another portfolio give a better return?  I need to check The Book again as I think the 40 year track record is quite respectable.  I may be creating unnecessary angst's as a CAGR  @9% seems fine and here I am shooting for a CAGR of 10.25%.

This all calls for more review.  And I will reread these posts tomorrow.  I believe I am mining gold here.

Bedraggled

[bedraggled]

WiseOne,

You, too?  Great fun!  I care not to repeat that.

I think today I refocus on 4x25 for me.  There is an age limit for adventure.  Harry Browne has been a reading companion since approximately 1981 so I am OK with 4x25 for me.  Howard Gold reacquainted me with HBPP in August just past in cbsmarketwatch.com in a post "A Portfolio for All Seasons."  I just had to get the book.  I don't think Craigr or Medium Tex can autograph a kindle, though.

I hope this topic is new in the forum.  Teaching the kiddies this stuff is a big chore.  They seem interested.  Therefore, at least, it seems worth exploring allocations with the 40 year horizon.

Good night and thanks.
Bedraggled

[ochotona]

You could just give your kids "normal" portfolios, then on top of that give them American Eagle gold coins and paper I-bonds as gifts, and they'll think you're a really great guy.

[bedraggled]

Ochotona,

You are very smart.  It is a rare occasion when I can impress the kids.  The last time?  After introductory driving lesson sessions with the clutch and the 5 speed manual transmission, I started from a standing start, uphill, and was perfectly smooth when I pulled away.  Later, when they asked how I did that, I said "just practice."  Yes, every once in awhile….

Cheers,
Bedraggled

[stone]

I thought this article from GMO gave a clear explanation of the key problem with having a volatile portfolio such as a stock heavy portfolio. The problem would be especially acute if the savers were adding to their savings during the saving period (eg adding a bit every year rather than just holding a lump sum for 40years):-

https://www.gmo.com/America/CMSAttachme ... caQw%3d%3d

To better understand the difference between MPT – a return-focused approach – and the wealth-focused approach that
we  advocate, it is helpful to compare the distribution of returns with the distribution of wealth. To a fairly good approximation,
returns are normally distributed, as illustrated in Chart 1. While there is plenty of empirical evidence that, at least over shorter
horizons, this is not quite true for many asset classes, our problem with the assumption for portfolio construction purposes here
is not particularly that returns are “fat-tailed”? or may be slightly skewed in one direction or another. It is rather that, even if
returns are normally distributed, the wealth those returns lead to is not.
Chart 1 shows a normal distribution of annual returns for an asset with a 5% return per annum and a 14% annualized volatility.
In a normal distribution, the average is the same as both the median and the mode, the most likely return. Whether you are
actually concerned with the average of all of the potential returns, the most likely return, or the return that is in the middle of
the distribution is irrelevant, because they are all the same.
As returns compound into wealth, however, Chart 1 is no longer relevant. Chart 2 shows the distribution of ending wealth
after investing $1 for 40 years in an asset with the normal return distribution shown above. This distribution is not normal, but
log-normal. The shape of the log-normal distribution is profoundly different than that of the normal distribution. The expected
value, or mean, of this distribution is the purple vertical line. If you invest for 40 years in an asset with normally distributed
returns averaging 5% per annum and an annualized standard deviation of 14%, the average wealth outcome is about $11. The
median outcome, however, is about $7, and the most likely outcome, the mode, is only $3.4.
Expected, or mean, values are dominated by the right tail of the distribution – those lucky 40-year periods in which returns
happened to average well over 5% real. While those events are rare, they have a big impact on the mean wealth. But for the
purposes of saving for retirement, those outcomes are largely irrelevant.
If you happen to be lucky enough to have lived and saved during the right period when asset returns were high, it doesn’t much
matter what your target date allocations were. You will wind up with more than enough money to retire on. The more important
part of the distribution is the left-hand side – those events when asset markets were not kind, and returns were hard to come by.
Those are the events where lifetime ruin, i.e., running out of money in retirement, is a real possibility.
We believe that the right way to build portfolios for retirement is to focus on how much wealth is needed and when it is needed,
with a focus not on maximizing expected wealth, but on minimizing the expected shortfall of wealth from what is needed in
retirement.

The lucky people are those who hit the Nasdaq crash type scenario at the start before they have much money put in. The unlucky are those who hit it at the end when they need the money but lose it all.

[D1984]

I thought this article from GMO gave a clear explanation of the key problem with having a volatile portfolio such as a stock heavy portfolio. The problem would be especially acute if the savers were adding to their savings during the saving period (eg adding a bit every year rather than just holding a lump sum for 40years):-

https://www.gmo.com/America/CMSAttachme ... caQw%3d%3d

To better understand the difference between MPT – a return-focused approach – and the wealth-focused approach that
we  advocate, it is helpful to compare the distribution of returns with the distribution of wealth. To a fairly good approximation,
returns are normally distributed, as illustrated in Chart 1. While there is plenty of empirical evidence that, at least over shorter
horizons, this is not quite true for many asset classes, our problem with the assumption for portfolio construction purposes here
is not particularly that returns are “fat-tailed”? or may be slightly skewed in one direction or another. It is rather that, even if
returns are normally distributed, the wealth those returns lead to is not.
Chart 1 shows a normal distribution of annual returns for an asset with a 5% return per annum and a 14% annualized volatility.
In a normal distribution, the average is the same as both the median and the mode, the most likely return. Whether you are
actually concerned with the average of all of the potential returns, the most likely return, or the return that is in the middle of
the distribution is irrelevant, because they are all the same.
As returns compound into wealth, however, Chart 1 is no longer relevant. Chart 2 shows the distribution of ending wealth
after investing $1 for 40 years in an asset with the normal return distribution shown above. This distribution is not normal, but
log-normal. The shape of the log-normal distribution is profoundly different than that of the normal distribution. The expected
value, or mean, of this distribution is the purple vertical line. If you invest for 40 years in an asset with normally distributed
returns averaging 5% per annum and an annualized standard deviation of 14%, the average wealth outcome is about $11. The
median outcome, however, is about $7, and the most likely outcome, the mode, is only $3.4.
Expected, or mean, values are dominated by the right tail of the distribution – those lucky 40-year periods in which returns
happened to average well over 5% real. While those events are rare, they have a big impact on the mean wealth. But for the
purposes of saving for retirement, those outcomes are largely irrelevant.
If you happen to be lucky enough to have lived and saved during the right period when asset returns were high, it doesn’t much
matter what your target date allocations were. You will wind up with more than enough money to retire on. The more important
part of the distribution is the left-hand side – those events when asset markets were not kind, and returns were hard to come by.
Those are the events where lifetime ruin, i.e., running out of money in retirement, is a real possibility.
We believe that the right way to build portfolios for retirement is to focus on how much wealth is needed and when it is needed,
with a focus not on maximizing expected wealth, but on minimizing the expected shortfall of wealth from what is needed in
retirement.

The lucky people are those who hit the Nasdaq crash type scenario at the start before they have much money put in. The unlucky are those who hit it at the end when they need the money but lose it all.

Two responses to this (well, besides the obvious of noting that GMO is basically correct in what they say above).

One, that's why the portfolio should get more conservative as the person ages. Having 100% of your net worth in stocks at age 20 may be foolish but it likely is not financial suicide since the value of your human capital (i.e. the value of your earnings over the next 40-50 years) is so much greater than the value of your (probably still relatively small) portfolio. Having 100% of your net worth in equities at age 65, OTOH, is (provided you need any significant chunk of said wealth for retirement) a disaster waiting to happen.

Two, having a portfolio of volatile assets can be OK provided they are at least somewhat non-correlated. Even with a 100% stock/risky assets portfolio (which I am not really recommending) if you'd diversified into several assets classes you could still have done alright even through the years 2000 to 2011. Let's say you had invested in (all in equal portions) a dividend focused US blue chip large cap or midcap fund like the Morningstar Dividend Leaders ETF FDL (or TWEIX or AWSHX or PRBLX or a Dividend Aristocrats fund...or VDIGX or HDV or PEY had it existed back then...for that matter FDL didn't exist back then either--nor did the Dividend Aristocrats fund-- but the underlying index for both did), a US large cap growth fund like the NASDAQ-100, a US small value fund, an EAFE index fund, an EM index fund, a fairly volatile--for a bond fund anyway--multisector bond fund like LSIIX (invests in high yield, convertibles, Treasuries, corporates, etc), a volatility/equity asset allocation fund like PHDG or VQT (or even a long/short volatility fund like XVZ), and a gold mining stock fund. Even from 2000 to 2011 (or from 2004 to 2014 if you wish since the volatility funds nor their underlying indexes existed back then although we can crudely simulate what they might have done) you still would've done OK...or at least have done rather better than being 100% in an S&P index fund (or 100% in a TSM fund or even 100% in an all world index fund). Now add a little bit--doesn't have to be anywhere near 25%--of cash, LTTs, and gold (if including gold in the portfolio, cut down some on the gold mining stocks) and the returns smooth out even more.

Even in a "the only thing that didn't go down was correlation" situation like 2008-early 2009, volatile asset classes like long volatility (VXX--didn't exist back then but the VIX futures underlying it did), long/short volatility (XVZ...ditto as VXX as far as the underlying goes), LTTs (or even more uncorrelated to equities, LTT zeros), gold, and managed futures all managed to log positive returns during this time period (of course, some of these asset classes didn't do so well during the mid-2009 to late 2014 bull market , but that's both the problem and promise (the yin and yang, or the good and bad if you will) of of owning uncorrelated assets....non-correlation shows up when you most need and want it to (bear markets), but it also shows up (during equity bull markets) when you least need it and would rather it just stay the heck away!

[bedraggled]

Stone and D1984,

Thank you.

More yet to ponder and reread.

Good morning and have a nice day.
Bedraggled

[Kbg]

I highly recommend Meb Fabers new short book on various portfolios. It is very cheap on Amazon.com and well worth the money. A couple of major lessons: keep expenses as low as you possibly can. And, after that it really doesn't matter all that much. Five or 10% here or there and at the end of a very long stretch all ends up about the same.

[ochotona]

Here is a short online interview where Fabers talks about his book. Sounds cool!

http://www.etf.com/sections/features-an ... nopaging=1

[bedraggled]

Kbg and ochotona,

Thanks for the info.