Golden Butterfly Portfolio

A place to talk about speculative investing ideas for the optional Variable Portfolio

Moderator: Global Moderator

User avatar
rocketdog
Executive Member
Executive Member
Posts: 688
Joined: Fri Dec 07, 2012 3:35 pm

Re: Golden Butterfly Portfolio

Post by rocketdog » Tue Dec 31, 2019 9:51 am

I only keep 60% of my HSA portfolio in the HBPP. I divide up the other 40% by putting 10% each into:
  • Small Cap Value
  • US REIT
  • Foreign Developed Markets
  • Diversified Emerging Markets
Working nicely for me so far.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 2386
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Golden Butterfly Portfolio

Post by mathjak107 » Tue Dec 31, 2019 10:00 am

this year anything with the word "buy" worked nicely
User avatar
vnatale
Executive Member
Executive Member
Posts: 1033
Joined: Fri Apr 12, 2019 8:56 pm
Location: Montague, MA
Contact:

Re: Golden Butterfly Portfolio

Post by vnatale » Tue Feb 18, 2020 6:23 pm

Tyler wrote:
Mon Apr 11, 2016 10:23 pm
sophie wrote: A question Tyler:  what would you use for rebalance bands?
30/10 is a nice round number.  It's more instinct than science, but it seems reasonable. 

Almost four years later......has your instinct remained the same regarding this?

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
vnatale
Executive Member
Executive Member
Posts: 1033
Joined: Fri Apr 12, 2019 8:56 pm
Location: Montague, MA
Contact:

Re: Golden Butterfly Portfolio

Post by vnatale » Tue Feb 18, 2020 6:31 pm

Kbg wrote:
Wed Apr 20, 2016 10:33 am
It's called negatively and weakly correlated assets. The risk mitigation is organically built in not externally derived. I continue to be dumbfounded at the focus on the PPs individual pieces.

The only thing that makes sense to me is a "factor" tilt of some kind. For someone younger I can easily see altering the stock component up to 30 or 35% by taking from gold/LTTs/both. Of course volatility will go up a bit, but not a ton.

Lastly, the portfolio performance profile is entirely visible in the historical returns...stock market strong bull the PP is not fun. Flat to down the PP is awesome. Hit rinse cycle and repeat. Over very long periods of time the results are comparable but WAY more predictable with the PP.
Am I correct in assuming that nearly four years later you hold to the same analysis? Your analysis seems reasonable to me but just checking to see if you still believe the same.

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
Kbg
Executive Member
Executive Member
Posts: 1488
Joined: Fri May 23, 2014 4:18 pm

Re: Golden Butterfly Portfolio

Post by Kbg » Tue Feb 18, 2020 11:26 pm

vnatale wrote:
Tue Feb 18, 2020 6:31 pm
Kbg wrote:
Wed Apr 20, 2016 10:33 am
It's called negatively and weakly correlated assets. The risk mitigation is organically built in not externally derived. I continue to be dumbfounded at the focus on the PPs individual pieces.

The only thing that makes sense to me is a "factor" tilt of some kind. For someone younger I can easily see altering the stock component up to 30 or 35% by taking from gold/LTTs/both. Of course volatility will go up a bit, but not a ton.

Lastly, the portfolio performance profile is entirely visible in the historical returns...stock market strong bull the PP is not fun. Flat to down the PP is awesome. Hit rinse cycle and repeat. Over very long periods of time the results are comparable but WAY more predictable with the PP.
Am I correct in assuming that nearly four years later you hold to the same analysis? Your analysis seems reasonable to me but just checking to see if you still believe the same.

Vinny
Yes. I do what I call a VP PP...more risk, more growth but based on PP principles.
User avatar
Hal
Executive Member
Executive Member
Posts: 223
Joined: Tue May 03, 2011 1:50 am

Re: Golden Butterfly Portfolio

Post by Hal » Wed Feb 26, 2020 8:06 pm

Smith1776 wrote:
Sun Dec 22, 2019 2:13 pm
This recent turn of conversation has me curious as to how much of the GB's outperformance over the PP is due to the SCV tilt, rather than the fact that it has more equity in an absolute sense (40% vs 25%).

I'd like to research into this more. You'd also have to control for the altered levels of gold, cash and bonds.

My first brief glance at the numbers seems to suggest the balance of GB outperformance over the PP may indeed be because of the tilt, rather than the 40% equity.

However, if that's the case, we go back to the gnarly problem of whether or not the factor premiums will persist.

If indeed a SCV tilted PP closes most of the gap in performance against the GB, it'd make me that much more content with the 4 x 25% allocation.
Just resurrecting the SCV topic. I think this series of three lectures on how ETF's are structured explain the outperformance.

https://www.youtube.com/watch?v=xpk3triMLZQ

https://www.youtube.com/watch?v=Ih7bWOSwECU

https://www.youtube.com/watch?v=0JfGplGv3BA

As always, all comments welcome :)
Post Reply