Re: Why a 60/40 Portfolio isn't Diversified
Posted: Mon Jan 07, 2013 9:03 am
The Bogleheads are not going to be happy!
Permanent Portfolio Forum
https://www.gyroscopicinvesting.com/forum/
https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=3885
Actually, many Bogleheads follow an "age in bonds" strategy (as I do). So the bond portion increases with age. Many Bogleheads divide the bond portion of their portfolio 50/50 between intermediate bonds and TIPS.Pointedstick wrote: I don't think they'll [i.e., Bogleheads] care. My experience there has been that a big part of their embrace of the 60/40 portfolio is their optimism about the economy
Yes. Real Return Bonds. They have been around since 1992, which is longer than TIPS. Although, I haven't seen them at iTrade's bond desk. You can buy XRB, but the MER is 0.40%. Also it has an average duration of 16 years, which means it is a long bond ETF, and will behave very similarly to long bonds.bluedog wrote: Just curious...
For all those Canucks out there...
Is there a CDN equivalent of TIPS?
10% is a good number for VP?Pointedstick wrote: I don't think they'll care. My experience there has been that a big part of their embrace of the 60/40 portfolio is their optimism about the economy. And indeed, it does well when the economy is booming.
It's actually a pretty good VP candidate, considering how the PP will lag during those times.
Any number can be good for your VP as long as you are comfortable with the thought of losing it. There are very few hard and fast rules with your actual investments. Many on this forum just happen to think the PP will do quite well but there are also plenty on here that think otherwise a bit (hence having a VP in the first place). It is all up to the individual what they think will work for them.frugal wrote:10% is a good number for VP?Pointedstick wrote: I don't think they'll care. My experience there has been that a big part of their embrace of the 60/40 portfolio is their optimism about the economy. And indeed, it does well when the economy is booming.
It's actually a pretty good VP candidate, considering how the PP will lag during those times.
Considering it can fall 50%...
Tks
Kriegsspiel - That's exactly how I have my holdings. Great minds think alike!Kriegsspiel wrote: That's almost how I have my 401k set up (50-50 stock index and bond index), with my Roth and taxable holding my PP.
That's right. The PP can fall of 75% in the unlikely (but possible) event of a total financial armageddon wiping out all paper assets (examples : communist dictatorship, very hard war, domino effect of bankrupts of banks & other financial firms, etc.). Well, that won't be 75% since your last asset, gold, will compensate for some of the loss by skyrocketing. Hyperinflation will wipe out 50% of your assets (bonds&cash). Etc.1NV35T0R (Greg) wrote:Any number can be good for your VP as long as you are comfortable with the thought of losing it. There are very few hard and fast rules with your actual investments. Many on this forum just happen to think the PP will do quite well but there are also plenty on here that think otherwise a bit (hence having a VP in the first place). It is all up to the individual what they think will work for them.frugal wrote:10% is a good number for VP?Pointedstick wrote: I don't think they'll care. My experience there has been that a big part of their embrace of the 60/40 portfolio is their optimism about the economy. And indeed, it does well when the economy is booming.
It's actually a pretty good VP candidate, considering how the PP will lag during those times.
Considering it can fall 50%...
Tks
Also, the PP can fall 50% (unlikely), but it can, so stating that a VP can drop 50% is the same argument that the PP has going for it. All investing has risk.
That one.Albert2011 wrote: Getting back to the AAII article - it suggested rebalancing when an asset class gets as high as 35% or as low as 15%. Does anyone know what rebalancing philosophy was followed that resulted in the historical returns since 1971 as presented on the front page of this blog site?
Hah, no great mind here. I just copy 'em.ozzy wrote:Kriegsspiel - That's exactly how I have my holdings. Great minds think alike!Kriegsspiel wrote: That's almost how I have my 401k set up (50-50 stock index and bond index), with my Roth and taxable holding my PP.