As if on cue given discussion about our quiet forum, The Wall Street Journal just published an article entitled "Three Alternatives to the Classic 60/40 Portfolio to Consider Now" and the first portfolio featured is the 4x25 PP (the other two are the All-Weather Portfolio and the 30/70 Flip Portfolio). Here are a few quotes:
"Dividing your portfolio equally in four asset categories—stocks, bonds, commodities and cash—is a well-balanced long-term diversification strategy for investors to consider..."
"This investment strategy is designed to perform well across various economic conditions including expansion, recession, inflation and deflation by balancing risk across a range of asset classes. The focus is on resilience and capital preservation as well as total returns..."
I’m curious about that 30/70 Flip portfolio mentioned in the article.
His rationale: Higher interest rates and high stock valuations imply a narrow equity premium—the additional return investors expect from stocks compared with risk-free government bonds. Investors can achieve a similar rate of return with less risk investing in a variety of fixed-income and stock investments.
It’s not for me, but it’s an interesting idea.
Xan wrote: ↑Sun Sep 07, 2025 11:58 am
Oh no! Is this a sign of a top?
Some may think this a contrarian strategy considering that the stock market has been hitting record highs. But that could also be a signal the market is nearing a correction, some financial pros say.
stpeter wrote: ↑Sun Sep 07, 2025 8:19 am
As if on cue given discussion about our quiet forum, The Wall Street Journal just published an article entitled "Three Alternatives to the Classic 60/40 Portfolio to Consider Now" and the first portfolio featured is the 4x25 PP (the other two are the All-Weather Portfolio and the 30/70 Flip Portfolio). Here are a few quotes:
"Dividing your portfolio equally in four asset categories—stocks, bonds, commodities and cash—is a well-balanced long-term diversification strategy for investors to consider..."
"This investment strategy is designed to perform well across various economic conditions including expansion, recession, inflation and deflation by balancing risk across a range of asset classes. The focus is on resilience and capital preservation as well as total returns..."
Perhaps we'll have more visitors soon.
I see 2 new members in July. 2 in August. 2 on September 3, 2025. None of them has yet participated.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
dualstow wrote: ↑Sun Sep 07, 2025 2:15 pm
I’m curious about that 30/70 Flip portfolio mentioned in the article.
His rationale: Higher interest rates and high stock valuations imply a narrow equity premium—the additional return investors expect from stocks compared with risk-free government bonds. Investors can achieve a similar rate of return with less risk investing in a variety of fixed-income and stock investments.
It’s not for me, but it’s an interesting idea.
Xan wrote: ↑Sun Sep 07, 2025 11:58 am
Oh no! Is this a sign of a top?
Some may think this a contrarian strategy considering that the stock market has been hitting record highs. But that could also be a signal the market is nearing a correction, some financial pros say.
Actually one of the most sophisticated (not to mention low-cost) "flip" portfolios is Vanguard's "boring" Target Retirement Income Portfolio:
While I'm generally not a big fan of all-in-one fund-of-fund portfolios this one is really quite sophisticated and hedges against a lot of risks. The 30% in stocks is globally-diversified at market cap weighting. The bonds are also globally diversified, and it's also the only such fund that includes short-term TIPS as a hedge against inflation spikes. For sure a great option for many retirees, with the added bonus of no rebalancing (and no possibility of monkeying with the allocations).
I bailed on Vanguard’s Target Retirement (2030 or ‘35) when they made some huge adjustment resulting in a massive capital gain. It was in my Roth so there was no tax to worry about, but I didn’t like that they did it and decided to go back to DIY allocations.
I have my 87 year old mother-in-law in a "roll your own" version of VTINX. 30% VT (Total World Stock), 30% VTIP (Short-term TIPS), 35% VGIT (Intermediate-term Treasuries), 5% treasury MM fund. Super-cheap ER, much more tax-efficient (almost all of the bonds are in her IRA), takes about 10 minutes a year to manage. But if I had it to do over (she has a lot of unrealized capital gains in stocks) I'd have just put her in the all-in-one. You really start to see the value of hand's-off simplicity as you age!
For a flip style asset allocation from a British perspective, third British (GBP) short term treasury (STT), third US (USD) STT, third split thirds 3x stock, gold, silver ... diversified fiat and non fiat currencies. If a single currency crashes to a extreme of a total loss then two-thirds being in non domestic limits your loss to a third, considerably better than those around you who were solely in domestic and where hyperinflation had become evident. Swap the 3x stock out for bitcoin and one-third is all in-hand (physical gold, physical silver, bitcoin private keys). Reducing withdrawals to 3% SWR and long term synthetic modelling suggests that in most cases that historically would have been a PWR (perpetual).
