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Marc Faber portfolio?
Posted: Sun Mar 27, 2016 11:03 pm
by jason
Marc Faber has been saying for a while that he recommends an asset allocation of 25% gold, 25% stocks, 25% bonds (and cash), and 25% real estate. I don't think he ever says how much cash he holds. So, this made me wonder if anyone has done a back test of 25% gold, 25% stocks, 25% bonds, and 25% real estate (with 0% cash) and compared that to the performance of the PP. I'd be curious to see how they compare both in performance, volatility, draw-downs, best year, worst year, and so on. I tried portfolio analyzer but I couldn't find ticker symbols that went far enough back in time. I wanted to back test from January 1st, 1972.
Re: Marc Faber portfolio?
Posted: Mon Mar 28, 2016 3:00 am
by MachineGhost
jason wrote:
Marc Faber has been saying for a while that he recommends an asset allocation of 25% gold, 25% stocks, 25% bonds (and cash), and 25% real estate. I don't think he ever says how much cash he holds. So, this made me wonder if anyone has done a back test of 25% gold, 25% stocks, 25% bonds, and 25% real estate (with 0% cash) and compared that to the performance of the PP. I'd be curious to see how they compare both in performance, volatility, draw-downs, best year, worst year, and so on. I tried portfolio analyzer but I couldn't find ticker symbols that went far enough back in time. I wanted to back test from January 1st, 1972.
It's in Mebane Faber's e-book comparing all of the asset allocation portfolios. Verdict is Mr. Doom's portfolio sucks because its overweight real assets, but at the end of the day, all asset portfolios more or less return the same. It's the sequence of returns that varies and the PP is the best.
Re: Marc Faber portfolio?
Posted: Mon Mar 28, 2016 10:18 am
by Tyler
Here's my interpretation with:
25% total stock market
25% long term treasuries
25% gold
25% reits
[img width=500]
http://i64.tinypic.com/1yww00.jpg[/img]
It's kinda like the PP on steroids. Not bad.
One thing that makes me pause is that once you account for REITs in the total stock market fund an the home equity of the typical investor, this would leave you quite a bit more exposed to real estate than 25%. You also have to be careful about the REIT taxes.
Re: Marc Faber portfolio?
Posted: Mon Mar 28, 2016 4:28 pm
by jason
Tyler wrote:
Here's my interpretation with:
25% total stock market
25% long term treasuries
25% gold
25% reits
[img width=500]
http://i64.tinypic.com/1yww00.jpg[/img]
It's kinda like the PP on steroids. Not bad.
One thing that makes me pause is that once you account for REITs in the total stock market fund an the home equity of the typical investor, this would leave you quite a bit more exposed to real estate than 25%. You also have to be careful about the REIT taxes.
Awesome, thanks! So, there is some definite upside there. But also risky. Things can get pretty ugly if real estate crashes. If REITs existed in the 1930s, I'm sure they would have performed very badly.
Re: Marc Faber portfolio?
Posted: Mon Mar 28, 2016 6:33 pm
by barrett
Those returns look great but it seems to me that there has to be at least a 10% cash allocation in order to run any kind of fair comparison to the PP.
