The latest from Jonathan Clements

[Kevin K.]

There's an interesting discussion of this post from today over on Bogleheads at the moment:

https://humbledollar.com/2020/10/game-over/

I also think it's nicely "bookended" by this somewhat more sophisticated piece from Morningstar:

https://www.morningstar.com/articles/10 ... bout-bonds

Clements doesn't even consider gold or real assets, while Rekenthaler does. I'm mulling over both pieces in light of recent discussions in this forum about alternatives to the PP's big bet on LTT's and Treasury MM funds and/or STT's.

[Hal]

You may wish to consider this post on the efficacy of Bonds vs Cash
https://www.idiosyncraticwhisk.com/2014 ... short.html

and to take it a step further, since HB considered Gold the second most popular money/currency behind the USD, replace some or all cash with Gold. Give Tylers site a workout

PS: If you consider a REIT as a shares in a company holding property, almost all the top selections are like the Golden Butterfly ie 20% Gold, 40% currency, 40% Shares.

[Kevin K.]

That's a great post Hal - thanks! Reading the article you provide the link to makes it clear that Clements has kind of arrived at the same conclusions due to the unprecedented current interest rate situation. Just own T-bills or at most a mixture of them and an ultrashort Treasury-heavy bond fund like BSV and call it a day on the cash (= bonds) side.

And yeah, I did know that pretty much all of the highest risk-adjusted return portfolios one gets from playing around on Portfolio Charts have around 20% gold and then a balanced mixture of equities and bonds. But what's interesting to me here is that none of the 10 shown on your chart have LTT's, and the best of them use just STT's and TBills/Cash.

The Benjamin Graham quote is timely too, since online bank CDs and MM funds are offering better returns than even 10 year Treasuries at this point. I think there are a number of iterations of the GB that are likely to work well going forward in which some mixture of iBonds, CD's and T-Bills replace the STT/LTT barbell, gold is maintained at 20 or even 25% and either REITS or total international replace the SCV.

[Hal]

Analysis on Aussie budget which is broadly applicable across various economies.
Especially at 51:30.

https://www.macrobusiness.com.au/2020/1 ... xperiment/

[Hal]

That's a great post Hal - thanks! Reading the article you provide the link to makes it clear that Clements has kind of arrived at the same conclusions due to the unprecedented current interest rate situation. Just own T-bills or at most a mixture of them and an ultrashort Treasury-heavy bond fund like BSV and call it a day on the cash (= bonds) side.

And yeah, I did know that pretty much all of the highest risk-adjusted return portfolios one gets from playing around on Portfolio Charts have around 20% gold and then a balanced mixture of equities and bonds. But what's interesting to me here is that none of the 10 shown on your chart have LTT's, and the best of them use just STT's and TBills/Cash.

The Benjamin Graham quote is timely too, since online bank CDs and MM funds are offering better returns than even 10 year Treasuries at this point. I think there are a number of iterations of the GB that are likely to work well going forward in which some mixture of iBonds, CD's and T-Bills replace the STT/LTT barbell, gold is maintained at 20 or even 25% and either REITS or total international replace the SCV.

As an aside for non-US readers of this post. Here is an example of a 50/50 split of Global Shares/Cash (AUD) with Gold.