Golden Butterfly Portfolio

[D1984]

I have RSP on the brain today (equal-weight S&P500 ETF). A GB with 40% RSP beats a GB with 20% ISV and 20% VTI, but the limiting factor for my backtesting (portfoliovisualizer.com) is when GLD started. It makes sense, RSP is not an implicit growth strategy (unlike cap-weighted ETFs) is therefore more value-ish, and has less weight put into the "titans" of the day of the S&P500, smaller firms contribute more.

I may be wrong here, but doesn't PV let you use the ticker ^GOLD to go back to 1985 (or even 1972) rather than just using the ticker symbol GLD?

[ochotona]

I will have to try!

And that point the GB devolves into an HBPP with an equity tilt...

[Xan]

I have RSP on the brain today (equal-weight S&P500 ETF). A GB with 40% RSP beats a GB with 20% ISV and 20% VTI, but the limiting factor for my backtesting (portfoliovisualizer.com) is when GLD started. It makes sense, RSP is not an implicit growth strategy (unlike cap-weighted ETFs) is therefore more value-ish, and has less weight put into the "titans" of the day of the S&P500, smaller firms contribute more.

Would you say that such funds are a kind of automatic buy-low sell-high?

[joypog]

I will have to try!

And that point the GB devolves into an HBPP with an equity tilt...

Isn't that the basic point of the GB? It's a HBPP with a prosperity tilt with <choose favorite factor(s)> to spice up the second equity peortion.

Then again, as I write this, maybe GB is more than that. The current market is showing why the SV tilt makes sense as a preferred tilt for the GB. It's a mini-barbell for the equities portion. In a bubble you have the MCW portion to pull the train, and when it deflates, you have the SV to avoid the worst of the losses.

[joypog]

I have RSP on the brain today (equal-weight S&P500 ETF). A GB with 40% RSP beats a GB with 20% ISV and 20% VTI, but the limiting factor for my backtesting (portfoliovisualizer.com) is when GLD started. It makes sense, RSP is not an implicit growth strategy (unlike cap-weighted ETFs) is therefore more value-ish, and has less weight put into the "titans" of the day of the S&P500, smaller firms contribute more.

Would you say that such funds are a kind of automatic buy-low sell-high?

Wall street guys are so slick. The MCW guys says look at the high churn in that fund! The Equal Weights guy retorts with your line.

Listening to investing podcasts that interview fund managers are a masterclass in sales! Most of those guys are so goddamn smooth, they talk like they're just sharing knowledge for 58 minutes and land with a subtle drop for their project in the last 120 seconds.

[ochotona]

Would you say that such funds are a kind of automatic buy-low sell-high?

YES. Whenever they rebalance to equal Dollar amounts for each security, they will do that.

Market-cap weighted are a momentum strategy. The titans of the S&P500 got that way because they have grown a lot in recent years, which results in them having a large weight.

[boglerdude]

"Equal" weight has you own 1% of Microsoft and 25% of Joe's vegan tacos. Also the slick folks like Arnott can front run the funds they manage.

https://www.morningstar.com/articles/61 ... -is-flawed

[ochotona]

You're being ridiculous. The smallest companies in the SP are like Alaska Airlines, News Corp, Fox News, DaVita, Norwegian Cruise Lines .. Don't throw that Joe's Vegan Taco stuff around any longer. You make yourself look absurd. Your posts don't deserve a reply

[ochotona]

Now I remember why I left the forum for two years

[Kbg]

Now I remember why I left the forum for two years

Xan is now booting the complete and total nobs thus bringing much needed relief to a struggling board.

But one still needs to mentally delete out some posts to stick around.

[Xan]

Ocho, you seem to be having a disproportionate response. It's perfectly sufficient to point out the smallest companies in the fund without the personal insults. Please try to remember that most of the people who are reading posts are not the person you're responding to, and are happy to learn things like what the smallest companies are. The insults are pretty off-putting.

[Smith1776]

In 2029 I wonder what people will be writing about what Permanent Portfolio holders did in 2020 and what gold did during the year....

Vinny

I'm setting a reminder in my calendar.

[Smith1776]

Out of curiosity, how many forum members here are using the GB as their allocation of choice?

[flyingpylon]

I'm using the GB.

[joypog]

Out of curiosity, how many forum members here are using the GB as their allocation of choice?

I'm averaging into the GB for our taxable account.

For in our retirements I've added International small cap value so that our overall portfolio will be equally split six ways.

I settled upon this new AA a couple weeks ago, but we won't fully average out of our cash-heavy position into this new portfolio till middle of next year so I'd say I'm "decided" but with the adage that money talks bs walks I'm actually "uncertain".

[Smith1776]

Interesting to hear, guys. I've settled on the GB as the allocation of choice for my father's estate assets.

[whatchamacallit]

Discussion on Paul Merriman's favorite thing, small cap value

Rob Berger Interview with Paul Merriman | Live Q&A

https://www.youtube.com/watch?v=HI4kRHrWyh0

[Smith1776]

Discussion on Paul Merriman's favorite thing, small cap value

Rob Berger Interview with Paul Merriman | Live Q&A

https://www.youtube.com/watch?v=HI4kRHrWyh0

Merriman is great. Small cap value is also great.

[whatchamacallit]

Which small cap value funds are you using Smith?

I am having trouble staying the course with small cap value myself. As I have reviewed the different indexes and funds more and more I don't have the faith that they will outperform or lower risk. I am now contributing to larger stock allocation with total market index instead of small cap value.

[Smith1776]

Which small cap value funds are you using Smith?

I am having trouble staying the course with small cap value myself. As I have reviewed the different indexes and funds more and more I don't have the faith that they will outperform or lower risk. I am now contributing to larger stock allocation with total market index instead of small cap value.

I am Canadian so I am using the only decent SCV fund in literally the whole country: VVL

https://www.vanguard.ca/en/advisor/prod ... p/etfs/VVL

It has a strong value tilt and a moderate size tilt. The t-stat on the value factor being much larger. I would love it if the size tilt was stronger, but it is what it is. Can't ask for the moon, I guess.

Screen Shot 2022-08-10 at 9.11.06 PM.png (29.96 KiB) Viewed 9144 times

[Smith1776]

The more and more I reflect on it, the more I'm inclined to say that the GB is the best "default" portfolio out there.

[whatchamacallit]

That makes it easier having only one value fund option.


I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.

I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.

[Smith1776]

That makes it easier having only one value fund option.


I became more discouraged as I reviewed value funds. They all have their own little way to try to market time.

I decided I don't like the stress of picking the best fund. I sympathize with ochotona on RSP but would rather just use FZROX with 0 expense ratio.

I feel you. I remember once reading that one of the secret's of Costco's success was to avoid subjecting shoppers with the paradox of choice. Too many choices leads people to not make a decision at all. Sales improved when choices became more limited. People don't want to go through the cognitive work of comparing umpteen different options, so they just throw their hands up instead. At least, that's how the theory goes.

Have you considered the SCV funds offered by Avantis? They seem to be the bleeding edge option for U.S. investors right now.

[whatchamacallit]

Yes. AVUV has had quite the run and it is impressive how quickly it has increased it's assets under management. It is almost as big as SLYV now.

https://etfdb.com/etfdb-category/small- ... -equities/


Maybe it will continue to outperform but it is definitely market timing and history tells us it won't last forever.

[Smith1776]

For those of you who watch/listen to the excellent Rational Reminder podcast, I made a request for them to do an episode on strategies like the PP and GB. Who knows, maybe Harry Browne will get his due.