Bogleheads.org

dspencer

The discussion is getting derailed with concern of HEDGEFUNDIE's whereabouts. Concerns about members can be posted in the US Chapters forum (Bogleheads community). Please stay on-topic. The topic is literally the evolution of one member's personal investment strategy, so it seems relevant to know i...

dspencer

Just curious and had a look at robintrack for what robinhood users were using UPRO and TMF. Over 9,000 users held UPRO and 700 users holding TMF. Under 100 holding TYD. 22,000 holding TQQQ. Not much risk parity going on there. At first I feared this strategy might face problems if everyone on the i...

dspencer

So, I dropped out of this thread around page 60 or so because I was overwhelmed with the number of newcomers bragging about their risk tolerance. The 20 pages I just caught up on were fascinating (to say the least) and a great chance for anyone to witness the emotional nonsense spewed during a high...

dspencer

What are the tax implications of running hedgefundie's strategy in a taxable account? Or should this ONLY be run in tax advantaged space? Everybody drink! Alrighty then. Just making a joke that this question has been asked and answered many times in this thread (and the first one). If you use the s...

dspencer

JohnnyFive wrote: ↑Thu Apr 02, 2020 5:54 am What are the tax implications of running hedgefundie's strategy in a taxable account? Or should this ONLY be run in tax advantaged space?

Everybody drink!

dspencer

On Bloomberg Businessweek the Fed presidents seemed to be much more afraid of deflation than inflation. Can anyone explain in practical terms the consequences of deflation? I understand that theoretically deflation tends to curb investment and consumption (since you could buy the same thing for les...

dspencer

Maybe someone a lot smarter than me can explain why : 1) vanguard long term treasury fund VUSTX has been relatively a straight line up and to the right over the last 33+ years even though yields have fallen from ~9% to 1.4%. If it’s explained because of capital appreciation and not the dividend yie...

dspencer

I'm autistic in real life and so I have no emotional feeling over my account balance. They're just numbers to me. Others may not be able to withstand the volatility that I have gone through with 100% stocks. If I feel confident enough in the portfolio over the next year my plan is to throw 100% of ...

dspencer

chrisdds98 wrote: ↑Fri Mar 06, 2020 3:14 pm this strategy is a bit frustrating in a taxable account! My plan has been to avoid STCG so I can only rebalance with new funds for the next several months

That's probably why many people think it shouldn't be done in a taxable account.

dspencer

Crushtheturtle wrote: ↑Fri Mar 06, 2020 9:50 am How about that TMF, amirite?

This is part of the reason I switched to PSLDX. First time I checked it was up like 18%. The temptation to significantly change my position seeing that would be very hard to resist. Maybe it would work out, but either way I would be stressing out about it.

dspencer

One thing I haven't seen discussed in this thread has been your question specifically - can this strategy be modified when the interest rates begin to rise? Unfortunately, interest rates rose many times since 1980, hard to know what's a head fake and what's not. For a constant asset allocation stra...

dspencer

P.S. The deflation possibility is one reason why I hold Long Treasuries at one end of my bond barbell (see sig). Why not have some EE bonds. 3.5% guaranteed isn't that bad. Even if inflation is a thing, 3.5% is pretty nice historically long term. Only issue with EE bonds is liquidity. So I guess if...

dspencer

My Excellent Adventure performance updated in first post in this thread. High watermark before coronavirus volatility was $190k. Future updates will be annual, as this is a long term strategy. I don't think I've posted in this thread before, but I wanted to note that I've been running a variant of ...

dspencer

I am officially out of UPRO/TMF/EDV and my Roth IRA is now 100% PSLDX. My main motivation is just to stop the urge to constantly research and tinker with my portfolio. I also had some minor complaints with M1 and now everything is back in one place. The returns were great and I could see one day ge...

dspencer

Even the HEDGEFUNDIE's UPRO/TMF allocation is only 15% and not 100% of portfolio. So Iam not planning to take more than 10% of portfolio. I'm well aware, that is a mistake. Half the thread is about determining the optimal ratio of UPRO and TMF, assuming those are the only things in your portfolio, ...

dspencer

So lets say I have 1,000,000 in a taxable all in equities and 100,000 in a roth. Why wouldn’t I use UPRO/TMF to maximize returns from my Roth? It seems like only using TMF would result in a lot lower returns? I know you said that maximizing ROI isn’t the only thing to want but I though that was the...

dspencer

I am officially out of UPRO/TMF/EDV and my Roth IRA is now 100% PSLDX. My main motivation is just to stop the urge to constantly research and tinker with my portfolio. I also had some minor complaints with M1 and now everything is back in one place. The returns were great and I could see one day get...

dspencer

I have transferred my Roth IRA back to Vanguard with the plan to put all of it in PSLDX. One interesting thing to note is that while Vanguard does not allow buy orders for UPRO or TMF, it appears they do allow them to be transferred in kind. Just checked today on a whim, and I seemingly could purch...

dspencer

I have transferred my Roth IRA back to Vanguard with the plan to put all of it in PSLDX. One interesting thing to note is that while Vanguard does not allow buy orders for UPRO or TMF, it appears they do allow them to be transferred in kind.

dspencer

Thank you Hedgefundie, this is the biggest innovation to my portfolios since I learned about the golden butterfly years ago. I cannot fully commit and keeping a few extra uncorrelated assets. Little over 50% gain this year. UPRO: 40% GBTC: 5% AAAU: 20% TMF: 33% SHY: 2% GBTC, wild. I like it. Why th...

dspencer

I would probably start with the paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1149340 I was sold just on the theory and logic of it. It's nice to see the backtest overwhelmingly favor it too. The thread I started to document the process is (I hope) a good resource: https://www.boglehea...

dspencer

Just turned 31 a few weeks ago. Here it is.. 18K - 17 Jul 2015 50K - 4 Oct 2016 - 15 Months 100K - 11 Mar 2017 - 5 Months 150K - 2 May 2017 - 2 Months 200K - 23 Jun 2017 - 1 Month 250K - 30 Aug 2017 - 2 Months 300K - 14 Feb 2018 - 6 Months 350K - 4 Jun 2018 - 4 Months 400K - 13 Jun 2018 - 2 Weeks 4...

dspencer

2011- $7k Had a rough start to my career after graduating into the recession in 2008. 2012- $22k 2013- $52k 2014- $96k 2015- $143k 2016- $191k 2017- $300k 2018- $420k 2019- $544k I'm currently single and 33 years old. 20% of my NW is tied up in cash at the moment, ~35% is tied up in my house and ~4...

dspencer

What would you consider to be risk parity with solely UPRO and EDV? According to Portfolio Visualizer it's about 1:2 UPRO:EDV. But that's based on data since 2009 (UPRO inception). Someone could probably do a longer analysis using simulated data. 7:3 using simulated data and VEDTX (the mutual fund ...

dspencer

Just depends upon your risk tolerance.... I'm looking for something that is higher risk than 100% equities for a side play. That's far away from risk parity.... but our yield curve issue is such right now, that expected real rates of returns of even long term bonds are near zero. So duration is onl...

dspencer

But every time rates drop, people are extremely happy with their TMFs/EDVs. Rather perplexing to me. I can only assume most following this strategy have much shorter time horizons than my own. I understand your point, but people are happy when the value of their holdings go up. It shouldn't be perp...

dspencer

I still have money invested in my less aggressive variant though, but have more modest goal of 1-3% outperformance over the next 20 years. I will not be disappointed if I am wrong. You won't be disappointed? I will be disappointed. However, I won't be financially ruined even if it vastly under perf...

dspencer

I still have money invested in my less aggressive variant though, but have more modest goal of 1-3% outperformance over the next 20 years. I will not be disappointed if I am wrong. You won't be disappointed? I will be disappointed. However, I won't be financially ruined even if it vastly under perf...

dspencer

I still have money invested in my less aggressive variant though, but have more modest goal of 1-3% outperformance over the next 20 years. I will not be disappointed if I am wrong. You won't be disappointed? I will be disappointed. However, I won't be financially ruined even if it vastly under perf...

dspencer

I’m fascinated by the number of adoptees of this along with threads popping up to discuss various side angles and questions. Playing devils advocate (since I do hold a variant myself), why does someone posting about large cap growth, FAANG, momentum, or even a single stock like Amazon not garner th...

dspencer

Took a quick skim of the graphs... great work! Agreed that starting date and time period viewed affects rebalancing, but depending on transactions costs, is volatility managed better through rebalancing? I'm just basing this off the principal from William Bernstein that more rebalancing allows you ...

dspencer

I've been thinking about indexing and it's implications on the market. Please correct me if I'm way off base, but I have been considering the indexing "bubble" as more of a potential plateau (lower risk/lower return). It seems as though, the more investors favor passive investing, the mor...

dspencer

I've been thinking about indexing and it's implications on the market. Please correct me if I'm way off base, but I have been considering the indexing "bubble" as more of a potential plateau (lower risk/lower return). It seems as though, the more investors favor passive investing, the mor...

dspencer

I think I may be one of the remaining few, if not only one(?), to be in the original 60/40 TMF/UPRO allocation. I started Feb 22nd and was up about 50% at one point. The portfolio has taken a bit of a dip the last 10 days though. I'm now up 38% since starting. I'm not sure when/if I'll change the a...

dspencer

Off topic question, what did everyone do with their whopping $10 M1 contribution in their taxable account (which was required to open an IRA). I don't plan on putting any money in the taxable account so it just sits there. I tried to buy VFMF but apparently you have to have 1 share before M1 can do...

dspencer

MotoTrojan, Are you essentially considering EDV as a leveraged fund even though it is technically not leveraged? What are you considering it's effective leverage to be? Essentially yes, although the 22% calc is simply the reduction in UPRO exposure. On the equity side you are leveraging to boost re...

dspencer

Can some explain to me what the corresponding VTI/EDV ratio would be to match the 55/45 upro/tmf 60/40 VTI/EDV is risk parity 40/60 UPRO/TMF is risk parity New allocation based on historical data : 55/45 UPRO/TMF ?/? VTI/EDV To answer your original question though it looks like 70% S&P500 (VTI ...

dspencer

To everybody: What's the proposed end game of Hedgefundie's strategy (or its variations) if U.S. rates follow the pattern of Japan and Europe? Would you still play this strategy if 10-year treasuries are at -1% and 30-year at -0.5% nominal, -2.5% and -2% real interest? If not, at what point would y...

dspencer

Is anyone considering:

1. Lowering the total leverage because you believe it's too high for optimal returns and/or to reduce risk?
2. Adding any assets that would protect against an inflationary environment?

dspencer

Honest question to people invested. How does it feel to know that your funds will be selling stocks today? And will load up by buying more treasuries (which have lower yields)? I'm asking from a purely psychological perspective. Doesn't it bother you? Why/why not? All I'd want to do is the exact op...

dspencer

I've been a longtime lurker on this forum but this thread has gotten me to finally register. I'd like to thank HEDGEFUNDIE and others for their great ideas and contributions. I wonder if people have considered optimizing the leverage ratio together with the stocks/long term treasuries ratio. Simila...

dspencer

If we having a discussion that moves away from risk parity, and just trying to find a better way to hold equities.....how about this? https://www.portfoliovisualizer.com/test-market-timing-model?s=y&coreSatellite=false&timingModel=5&startYear=1985&endYear=2019&initialAmount=1000...

dspencer

Hi all and thanks for reading, Since getting my undergrad degree and subsequent first job 2 years ago, I immediately delved into the topic of personal finance to better understand investing/not blowing my paycheck every other week and letting my lifestyle increase. ( Doing a good job of this overal...

dspencer

Sounds like 43/57 UPRO/EDV could fall in the Kelly sweet spot :). For lower levels of leverage, is there a particular rationale for leveraging the stock or bond side? Well, 43 X 3 is > 100 so some degree of leverage would be required on the equity side for my particular example. I could have replac...

dspencer

MotoTrojan wrote: ↑Fri Aug 16, 2019 9:57 am
Sounds like 43/57 UPRO/EDV could fall in the Kelly sweet spot .

For lower levels of leverage, is there a particular rationale for leveraging the stock or bond side?

dspencer

Can we get a "show of hands" of those posters who are participating in this excellent adventure? I'm out (for now), but this is the most intriguing thread I've ever read on this forum (market timer's classic is a close second). I am doing the original 40% UPRO/ 60% TMF using my Roth IRA w...

dspencer

Anyone who changed their allocation yesterday with me was rewarded for it today. UPRO up 5% with TMF flat. I haven't changed my allocation, but I did decide to rebalance to get from roughly 30/70 (UPRO/TMF) back to 40/60. Unfortunately, due to the M1 trading window I missed the 1 day gain. Oh well,...

dspencer

fellow travelers might benefit from an impromptu rebalance today. Cheers :greedy I have been fighting the urge to rebalance early for the last week as TMF grows to a larger and larger share. So far doing nothing has paid off, but I can't help but wonder if at some point I am losing the risk parity ...

dspencer

Ok, I bought into this around end of May. 60/40 TMF/UPRO. Now I’m about 50/50. When should I rebalance - once a quarter? So do I wait until end of august or rebalance now since it’s deviated a bit? There's many posts devoted to how often to rebalance and there's not a consensus but I'm guessing qua...

dspencer

For the sake of argument, if the stock market has a significant drop and the Fed drops rates to near zero, would you adjust your allocation at that point? You mean the period starting in 2009 when the 40/60 original strategy went on to deliver 29% CAGR for the next 10 years (and counting)? I think ...

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