Author Topic: Portfolio Charts - The Golden Butterfly  (Read 324957 times)

AdrianC

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Re: Portfolio Charts - The Golden Butterfly
« Reply #650 on: January 09, 2020, 07:33:54 AM »
I don't have the patience, or the inclination to go through and update all my old posts with working images. If you've gotten this far, read all the text from my posts, and are still interested, there's nothing more I can say that will convince you otherwise.

Instead, I'll simply bump this thread every once in a while, with the live results. After 30 years it'll likely look just like the Permanent Portfolio looks now (losing to 100% bonds since inception), but by then I'm sure everyone will have moved on to the next hot thing, and will have long forgotten about their losses in this thread.

Starting value: $1,000,000




And with a $40,000 a year withdrawal:



Note, in both instances you would've been better off with a 60/40 stock/bond portfolio than the Golden Butterfly, but I'm keeping it simple for now.

Interest Compound doesn't post anymore. I'll try to remember to update this at the end of each year.

Portfolio Analysis Results (Sep 2015 - Dec 2019)

Portfolio 1 Final Balance $1,560,762  CAGR 10.82% (VT)
Portfolio 2 Final Balance $1,368,288  CAGR 7.50% ("Golden Butterfly")

With a $40,000 a year withdrawal (adjusted for inflation):
Portfolio 1 Final Balance $1,297,659  CAGR 6.20% (VT)
Portfolio 2 Final Balance $1,122,746  CAGR 2.71% ("Golden Butterfly")

Everything was up in 2019. Holding 20% cash hurt returns - just ask Warren Buffett.

effigy98

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Re: Portfolio Charts - The Golden Butterfly
« Reply #651 on: January 16, 2020, 12:23:26 PM »
Currently doing:

42 NTSX
20 SMMV
20 GLDM
18 EDV (some long bonds are in NTSX)

mrmoonymartian

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Re: Portfolio Charts - The Golden Butterfly
« Reply #652 on: February 07, 2020, 06:18:42 AM »
Thanks so much, @Tyler! I was a bit slow and just noticed the Jan update:

https://portfoliocharts.com/2020/01/06/the-future-of-portfolio-analysis-has-more-history-than-ever/

So many possible combinations now in an easy to use grid layout. Powerful. And 6 more countries added. Bravo!

talltexan

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Re: Portfolio Charts - The Golden Butterfly
« Reply #653 on: February 07, 2020, 07:46:28 AM »
Just in time for my rebalancing week! Gonna go get me some of that yummy small cap value.

Tyler

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Re: Portfolio Charts - The Golden Butterfly
« Reply #654 on: February 07, 2020, 09:05:38 AM »
Thanks so much, @Tyler! I was a bit slow and just noticed the Jan update:

https://portfoliocharts.com/2020/01/06/the-future-of-portfolio-analysis-has-more-history-than-ever/

So many possible combinations now in an easy to use grid layout. Powerful. And 6 more countries added. Bravo!

That last update took a lot of work, so I'm glad you like it!

I'm really excited about how it turned out and can be useful for investors all around the world. No matter what country you live in or portfolio you prefer, there's something for investors of all types.

Enjoy!  :)
« Last Edit: February 07, 2020, 01:47:15 PM by Tyler »

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #655 on: February 07, 2020, 12:40:13 PM »
Thanks so much, @Tyler! I was a bit slow and just noticed the Jan update:

https://portfoliocharts.com/2020/01/06/the-future-of-portfolio-analysis-has-more-history-than-ever/

So many possible combinations now in an easy to use grid layout. Powerful. And 6 more countries added. Bravo!


k9

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Re: Portfolio Charts - The Golden Butterfly
« Reply #656 on: March 03, 2020, 03:50:45 AM »
That last update took a lot of work, so I'm glad you like it!

I'm really excited about how it turned out and can be useful for investors all around the world. No matter what country you live in or portfolio you prefer, there's something for investors of all types.

Yeah, as a French investor, I'm really enjoying this update, thanks a lot for all the good work Tyler!

effigy98

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Re: Portfolio Charts - The Golden Butterfly
« Reply #657 on: March 06, 2020, 08:41:26 AM »
Just want to give a bump for Tyler helping preserve my FI date. Thank you!

Tyler

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Re: Portfolio Charts - The Golden Butterfly
« Reply #658 on: March 06, 2020, 01:25:26 PM »
Just want to give a bump for Tyler helping preserve my FI date. Thank you!

Youíre welcome, and Iím glad itís working for you!

One of the biggest benefits of diversifying across assets that cover different economic conditions is that your portfolio always has your back. :)
« Last Edit: March 06, 2020, 04:42:13 PM by Tyler »

hodedofome

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Re: Portfolio Charts - The Golden Butterfly
« Reply #659 on: March 07, 2020, 10:07:23 PM »
I do a variant of the permanent portfolio, but also overlay a trend following aspect to it so that Iím not holding an asset class while it goes down the toilet. The volatility is drastically lower (as well as returns) and so I leverage up the portfolio a bit to juice up returns.

IíM not doing any volatility weighting or anything fancy like that, just doing equal weight which is good enough for me. Been doing this for several years and itís worked out well.

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #660 on: March 09, 2020, 03:17:01 AM »
Anyone want to lock in 30 years of interest payments at 0.917% shoot me a PM

Radagast

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Re: Portfolio Charts - The Golden Butterfly
« Reply #661 on: March 09, 2020, 07:27:58 PM »
Did Craig Rowland go to 50% cash, or did Tyler convince him otherwise? I recall his saying that he had determined that owning long term treasury bonds made no sense below 1%, and if it happened he would go to cash. Anyone know if he did?

Tyler

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Re: Portfolio Charts - The Golden Butterfly
« Reply #662 on: March 09, 2020, 10:41:23 PM »
Did Craig Rowland go to 50% cash, or did Tyler convince him otherwise? I recall his saying that he had determined that owning long term treasury bonds made no sense below 1%, and if it happened he would go to cash. Anyone know if he did?

Craig actually dropped into the Gyroscopic Investing forum the last few days. Long story short, he's still using the traditional 4x25 PP. Someone asked your exact question about bond rates dropping below 1%, and he replied that he has no better ideas and plans to rebalance as usual. He also chatted a bit about bond convexity, which is a concept I first learned from him years ago.  I'm pretty sure I don't need to convince him of anything!
« Last Edit: March 09, 2020, 11:02:46 PM by Tyler »

Radagast

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Re: Portfolio Charts - The Golden Butterfly
« Reply #663 on: March 09, 2020, 11:03:02 PM »
Did Craig Rowland go to 50% cash, or did Tyler convince him otherwise? I recall his saying that he had determined that owning long term treasury bonds made no sense below 1%, and if it happened he would go to cash. Anyone know if he did?

Craig actually dropped into the Gyroscopic Investing forum the last few days. Long story short, he's still all-in on the traditional 4x25 PP. Someone asked your exact question about bond rates dropping below 1%, and he replied that he has no better ideas and plans to rebalance as usual. He also chatted a bit about bond convexity, which is a topic I first learned from him years ago.  I'm pretty sure I don't need to convince him of anything!
Huh. It was a long time ago I read that and I canít remember the details. Maybe the bail at 1% concept assumed a floor of zero, but with an infinitely low floor which might be assumed now it now never makes sense to bail.

Tyler

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Re: Portfolio Charts - The Golden Butterfly
« Reply #664 on: March 09, 2020, 11:44:34 PM »
Huh. It was a long time ago I read that and I canít remember the details. Maybe the bail at 1% concept assumed a floor of zero, but with an infinitely low floor which might be assumed now it now never makes sense to bail.

Regardless of one's old assumptions, watching the Permanent Portfolio gain 6% YTD while the stock market lost 15% over the same timeframe could spur a renewed appreciation for long term treasuries even at low rates. ;) Perhaps he just doesn't feel driven to fix something that ain't broken.

But I certainly can't speak for Craig, and I look forward to any future updates he does offer.

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #665 on: March 10, 2020, 03:25:17 AM »
You guys hitting some rebalancing points?  I've never really had to do it due to market movement, since I've always contributed to lagging assets, withdrew from outperforming assets, and otherwise rebalanced around January during my fiscal housecleaning.  I haven't looked closely, but it definitely looks like stuff is out of whack

Even with a long-term goal of drawing down gold/treasuries to more of a 10-20% range it looks like I should be rebalancing more aggressively out of them.
« Last Edit: March 10, 2020, 03:27:41 AM by dragoncar »

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #666 on: March 18, 2020, 01:21:36 PM »
Gonna do some TLH... currently use VB for small-cap.... switch it out for VBR?  Any story for why value or growth will out/underperform going forward?

mrmoonymartian

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Re: Portfolio Charts - The Golden Butterfly
« Reply #667 on: March 18, 2020, 04:13:31 PM »
Don't know about immediate term. I'm in it for the long haul, where SCV has a history of outperforming.

I'm looking at VIOV (or IJS). VBR is mid+small value, while VIOV is small value. Scroll down to the bottom right of these...

https://www.etf.com/VBR#fit
https://www.etf.com/VIOV#fit
« Last Edit: March 18, 2020, 04:15:58 PM by mrmoonymartian »

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #668 on: March 18, 2020, 04:50:29 PM »
Don't know about immediate term. I'm in it for the long haul, where SCV has a history of outperforming.

I'm looking at VIOV (or IJS). VBR is mid+small value, while VIOV is small value. Scroll down to the bottom right of these...

https://www.etf.com/VBR#fit
https://www.etf.com/VIOV#fit

Ah thanks

I think value has underperformed recently so maybe there a chance return to mean

talltexan

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Re: Portfolio Charts - The Golden Butterfly
« Reply #669 on: March 18, 2020, 05:12:43 PM »
I've been adding SCV, but I started when it was still 50% higher than it is today.

vand

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Re: Portfolio Charts - The Golden Butterfly
« Reply #670 on: May 16, 2020, 04:19:11 AM »
Crisis? What Crisis?

Not the GB, but it's daddy the Permanent Portfolio strategy has just hit new highs

Perhaps even more impressively, the strategy is 11% YoY and didn't even go YoY negative at any point in the last 12 months.

I haven't checked, but I'm guessing that the SCV component in Tyler's GB has done it no favours in the last few years as both small cap and value has been been consistent negative factors.. again a remarkable testament to the resilience of the original PP that people have tried to improve on it and even now it still has better risk adusted characteristics than just about all other multi-asset strategies.


dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #671 on: May 17, 2020, 01:53:39 AM »
Crisis? What Crisis?

Not the GB, but it's daddy the Permanent Portfolio strategy has just hit new highs

Perhaps even more impressively, the strategy is 11% YoY and didn't even go YoY negative at any point in the last 12 months.

I haven't checked, but I'm guessing that the SCV component in Tyler's GB has done it no favours in the last few years as both small cap and value has been been consistent negative factors.. again a remarkable testament to the resilience of the original PP that people have tried to improve on it and even now it still has better risk adusted characteristics than just about all other multi-asset strategies.



Yeah small caps have been a drag for ... a while now.  Even before COVID

Tyler

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Re: Portfolio Charts - The Golden Butterfly
« Reply #672 on: May 17, 2020, 10:33:44 AM »
It's true that small cap value hasn't done so well lately, but the Golden Butterfly is currently up 9.5% over the last 12 months and is sitting about even YTD.  I've been very happy with it.

When you invest in several very different volatile assets for a while, you get used to at least one of them struggling at any given time.  That can be stressful at first if you're used to actively managing your investments.  But eventually you learn to focus on the portfolio as a whole, tune out the asset noise, and let the diversification do its thing.

BTW, I agree with the observation that the Permanent Portfolio is particularly good at handling steep market drawdowns.  When it comes to protecting your money it's really hard to beat.

dragoncar

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Re: Portfolio Charts - The Golden Butterfly
« Reply #673 on: May 17, 2020, 02:23:52 PM »
It's true that small cap value hasn't done so well lately, but the Golden Butterfly is currently up 9.5% over the last 12 months and is sitting about even YTD.  I've been very happy with it.

When you invest in several very different volatile assets for a while, you get used to at least one of them struggling at any given time.  That can be stressful at first if you're used to actively managing your investments.  But eventually you learn to focus on the portfolio as a whole, tune out the asset noise, and let the diversification do its thing.

BTW, I agree with the observation that the Permanent Portfolio is particularly good at handling steep market drawdowns.  When it comes to protecting your money it's really hard to beat.

Oh yeah Iím happy with it and not planning to change my AA beyond my long term plans.  I actually feel a bit lucky since my plan has been to draw down gold and treasuries and itís been pretty easy to do that during this crisis with those assets way up.  If I was drawing them down as they tanked that would be a crappy sequence of returns

DalioGold10

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Re: Portfolio Charts - The Golden Butterfly
« Reply #674 on: May 18, 2020, 01:35:06 PM »
It's true that small cap value hasn't done so well lately, but the Golden Butterfly is currently up 9.5% over the last 12 months and is sitting about even YTD.  I've been very happy with it.

BTW, I agree with the observation that the Permanent Portfolio is particularly good at handling steep market drawdowns.  When it comes to protecting your money it's really hard to beat.

Hi Tyler

Great work on the golden butterfly portfolio, i.e. which is basically the PP with a tilt towards the prosperity (the most often economic environment).

As yourself, I also bear a bias towards gold (due to Dalio  :) ) and it does not disappoints us these days :)
One of my portfolios (accounting for circa 35% of my liquid net worth) is basically the golden butterfly: 40% Equity composed of 20% World large caps & 10% Developed world small caps & 10% Developed world REITs; 20% US short term treasuries; 20% US long term treasuries; 20% gold.

As you said in your previous posts, all depends on how comfortable you are with your chosen AA and if is align with your believes and markets expectations.

Cheers.

effigy98

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Re: Portfolio Charts - The Golden Butterfly
« Reply #675 on: May 31, 2020, 05:21:36 PM »
Adding volitility works in this environment as insurance. Toss in a few percent of tvix.

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bacchi

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Re: Portfolio Charts - The Golden Butterfly
« Reply #676 on: May 31, 2020, 05:29:00 PM »
Adding volitility works in this environment as insurance. Toss in a few percent of tvix.

Shouldn't one buy vol BEFORE there's actually any?

effigy98

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Re: Portfolio Charts - The Golden Butterfly
« Reply #677 on: June 04, 2020, 10:45:34 AM »
Vol is really low right now. It is acting like we are in the greatest bull run ever and the economy is above perfection. Added a little more.

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bacchi

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Re: Portfolio Charts - The Golden Butterfly
« Reply #678 on: June 04, 2020, 05:42:33 PM »
Vol is really low right now. It is acting like we are in the greatest bull run ever and the economy is above perfection. Added a little more.

VIX is 26 right now. Most of the time, it hangs around in the 10-20 range. During a long bull run, it drops down to the low teens, which is a great time to buy long term, out-of-money, VIX calls.

https://www.macrotrends.net/2603/vix-volatility-index-historical-chart

MustacheAndaHalf

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Re: Portfolio Charts - The Golden Butterfly
« Reply #679 on: June 08, 2020, 03:58:52 AM »
Vol is really low right now. It is acting like we are in the greatest bull run ever and the economy is above perfection. Added a little more.
The volatility index is lower than March, but still very high compared to the past 5 years.
https://finance.yahoo.com/quote/%5EVIX/

Or look at the 6 month graph of the S&P 500: before and after the big drop in late March.  Before the drop, relatively smooth price movements.  After the drop, up/down spikes are common, showing a visual of how much more volatile the S&P 500 has been.
https://finance.yahoo.com/quote/VOO/

Currently the S&P 500 is -0.3% YTD versus GLD +10.4% YTD.