In Part 4 of the Feynman Portfolio Study we backtrack a little and take Optimization out of the equation. We also take out some degree of diversification by limiting the Portfolio to the (10) ETFs in the US Equity (6) and US Bond (4) Asset Groups.
We analyze the performance of 3 “Classic” portfolios with the following allocations:
I. 65% Equities; 35% Bonds;
II. 50% Equities; 50% Bonds;
III. 35% Equities; 65% Bonds;
In this Part 4-1 we examine the behavior of totally “passive” (unadjusted) portfolios – Buy and Hold.
Part 4-1 can be downloaded here as a Word file.
In Part 4-2 we shall examine the behavior of re-balanced portfolios. Since we live in a democracy and I’m also keen to see how many people are still awake after reading these articles, I encourage you to vote on the criteria for rebalancing – Lowell gets 2 votes since it’s his website!
The options are:
|
65% |
50% |
35% |
|||||
|
Limit |
High |
Low |
High |
Low |
High |
Low |
|
|
A |
10% |
72% |
59% |
55% |
45% |
39% |
32% |
|
B |
20% |
78% |
52% |
60% |
40% |
42% |
28% |
|
C |
30% |
85% |
46% |
65% |
35% |
46% |
25% |
|
D |
40% |
91% |
39% |
70% |
30% |
49% |
21% |
The above table shows the high/low rebalance points for the 65%, 50% and 35% allocations depending on whether we allow a 10%, 20%, 30% or 40% fluctuation in allocations.
Please go to the vote area on the right hand side of the homepage to cast your vote – A, B, C or D.
Thank you in advance for participating – and remember, this isn’t an optimization exercise, so there’s no excuse for not participating in case you don’t pick the “right” option. Don’t let other voters influence your choice.
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Lowell