PP vs Synthetics
Moderator: Global Moderator
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Clive
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cabronjames
Re: PP vs Synthetics
Clive, for the PP EDV/IWM port, wouldn't the logic be
as you say, EDV has approx 3/2 the volatility of TLT, & similarly IWM ~3/2 volatility of VTI, so EDV & IWM need to be held in 2/3 of normal amount.
GLD & VFISX still need to be held in 3/3 of normal amount.
So there are 10 parts to the port, 3/10 each for GLD & VFISX, 2/10 each for EDV & IWM.
So wouldn't the port be 30% GLD, 30% VFISX, 20% EDV, 20% IWM ?
as you say, EDV has approx 3/2 the volatility of TLT, & similarly IWM ~3/2 volatility of VTI, so EDV & IWM need to be held in 2/3 of normal amount.
GLD & VFISX still need to be held in 3/3 of normal amount.
So there are 10 parts to the port, 3/10 each for GLD & VFISX, 2/10 each for EDV & IWM.
So wouldn't the port be 30% GLD, 30% VFISX, 20% EDV, 20% IWM ?
Re: PP vs Synthetics
The decay effects seem more significant over only 6 months than I would have guessed.