Gyroscopic Investing

The more I see things like this, the less I like ETF's...

Just my opinion, and based on nothing other than my gut feeling.

Adam1226 wrote: The more I see things like this, the less I like ETF's...

Just my opinion, and based on nothing other than my gut feeling.

I question the results, mainly because of the monthly rebalancing used in his backtests. Even a modest bid ask spread on an ETF, is going to eat into your returns significantly. I played that game with a Global Rotation strategy, and decided there was too much churning to suit me. When I compared what I actually got, compared to the backtest for the same period, results were not close enough for me to feel comfortable with the strategy.

Were you speaking to that in your comment, or was something else on your mind?

Steve G

I think that everyone who has tested it has shown that frequent rebalancing actually reduces PP returns, so I wouldn't want to go that route anyway.

SteveGo wrote:

Were you speaking to that in your comment, or was something else on your mind?

Not specifically, but that is just one of the unforeseen (at least unforeseen by me) problems with ETF's that I am referring to.  

Probably just paranoia on my part...I have yet to hear of an ETF failing.

I don't have a link, but a PP rebalanced never even puts up a good return. Most of us probably couldn't tolerate the extreme lopsidedness that would occur at times, which is reason enough for the periodic rebalance.