Portfolio Charts

Ask your investment, budget, and other money related questions here
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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Tue May 02, 2017 9:14 pm

Tyler9000 wrote:
Thu Apr 20, 2017 6:12 pm
So I wrote a long post, thought better of it, and decided to go the PM route for now. Sometimes my excitement outpaces my rational side. :D I'm sure I'll post it again sometime soon.
No more false starts this time -- it's a done deal. I finally updated the site to study portfolios not only for US investors but also for Australia, Canada, Germany, and the UK. It was a ton of work to get there, but I'm pretty happy with the results.

https://portfoliocharts.com/2017/04/29/ ... ng-global/

Now maybe I'll have time to actually study international portfolios rather than just hunting down data. ;)

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BlueNote
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Re: Portfolio Charts

Post by BlueNote » Wed May 03, 2017 5:43 am

Thank you!

ThisDinosaur
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Re: Portfolio Charts

Post by ThisDinosaur » Wed May 03, 2017 6:29 am

Tyler, just when I think your site can't get any better.

Some quick bond-related questions. Will "international bonds" make its way back on there as an asset class? What about emerging market debt? Do all the asset classes become country-specific when you switch (gov't LTT, reits, etc. are for the selected country)?

Thanks.

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vexed87
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Re: Portfolio Charts

Post by vexed87 » Wed May 03, 2017 6:49 am

Tyler, this is literally awesome. Chapeau! 8-)

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Wed May 03, 2017 10:38 am

ThisDinosaur wrote:
Wed May 03, 2017 6:29 am
Some quick bond-related questions. Will "international bonds" make its way back on there as an asset class? What about emerging market debt? Do all the asset classes become country-specific when you switch (gov't LTT, reits, etc. are for the selected country)?
The trick with international bonds is that most index funds tend to be hedged. That makes modeling them a lot more complicated, and I decided to save that for a future project.

International stocks, commodities, and gold are all universal and are simply translated to local currency. Domestic stocks, bonds, and cash are country specific. So if you're studying the UK, for example, they represent UK stocks, UK gilt funds, and UK Tbills. And all returns account for local inflation.

Loner
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Re: Portfolio Charts

Post by Loner » Wed May 03, 2017 10:56 am

Thanks Tyler. Best portfolio tool I've seen. I'm always positively surprised at the impact of adding gold to the mix.

Earlybath
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Re: Portfolio Charts

Post by Earlybath » Wed May 03, 2017 11:02 am

Outstanding effort, thanks Tyler.

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Re: Portfolio Charts

Post by jacob » Wed May 03, 2017 11:14 am

@Tyler9000 - Are you sure about those currency/hedging assertions?

It was my impression that international numbers (data) are of course in the local currency, but if you buy funds (in the US) that cover international securities, these funds mostly do not hedge the currency exposure unless explicitly stated(*). Consequently, this means international investing is often more a short-USD play than anything else.

(*) IIRC(?!) most funds don't. Managed funds may switch it on and off depending on where they think the USD is going.

ThisDinosaur
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Re: Portfolio Charts

Post by ThisDinosaur » Wed May 03, 2017 11:28 am

The Vanguard international bond fund prospectus does specifically say it is hedged.

"The fund will attempt to hedge its foreign currency exposure, primarily through the use foreign currency exchange forward contracts, in order to correlate to the returns of the index, which is US Dollar hedged."

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Wed May 03, 2017 12:29 pm

@Jacob -- Yeah, I phrased that really poorly. You're absolutely correct that most index funds are unhedged, and the calculators are built around that assumption. I should have said this:
The trick with international bonds is that many of the most popular international bond index funds are hedged.
For example, note that Vanguard doesn't even offer an unhedged option.

classical_Liberal
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Re: Portfolio Charts

Post by classical_Liberal » Sun May 07, 2017 3:11 pm

@ Tyler9000

Feedback regarding the new visuals for the Withdrawal Rate Calculator gets one big thumbs up here!

I find the way in which it visualizes a perpetual & safe withdrawal rates a very nice way to look at passive portfolios for those who intend to pursue ERE with some planned earned income. My largest concern regarding a "partial retirement" is reaching an older age when small levels of supplemental wage income could be more difficult to come by and/or less appealing to earn. While simultaneously my second largest concern is to ensure I'm not going to leave too much money on the table at death as I have very little legacy concerns and do not want to accidentally "over earn" in the next few decades. It's relatively easy for me to make a personal decision of $X inflation adjusted at age 67 should carry through to death without leaving too much on the table. The chart visual change clearly illustrates the following: I have $X now, how much can I plan to withdraw in a worst case through year 10.15, 20, etc years and still be reasonably assured that I will not draw down on the original inflation adjusted principle needed for traditional retirement, along with what is the current SRW for the ensuing years after "full-retirement".

IOW, My previous tracking plan was an annual calculation in which I would determine I had $X dollars of inflation adjusted gains (or losses). My budget is $X+$Y, so I need to earn $Y next year to maintain. Year by year this would insure principle is maintained, but value $Y would wildly (hopefully less wildly thanks to your charts) fluctuate, and could lead to over saving in a positive sequence of returns environment. With this single visual I can determine that (historically speaking), I can with draw z% over the next 27 years and be reasonably assured that original principle will remain intact for traditional retirement, no matter the single year returns, then switch the SWR for remaining life. This makes it much easier to plan a $Y amount going forward. Which is very helpful for a person in my set of circumstances. Nicely done!

Of course, the usual disclaimer I will not base my entire strategy on this, rather its a very helpful visual tool to make for better planning and progress tracking. It's most likely I will use a combination of the above methods for my draw down, as I'm too pessimistic to believe the future will be as good as the past :)

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Smashter
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Re: Portfolio Charts

Post by Smashter » Fri Aug 18, 2017 7:43 am

@Tyler, can the Portfolio Charts super fans get an update on the state of the site? Do you see it as being in "set it and forget it mode" now that you have a new part time job? Are you getting offers to buy it? Have the Bogleheads and MMM'ers started a petition yet to make you remove any portfolios that include gold? :)

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Fri Aug 18, 2017 7:50 am

Smashter wrote:
Fri Aug 18, 2017 7:43 am
@Tyler, can the Portfolio Charts super fans get an update on the state of the site? Do you see it as being in "set it and forget it mode" now that you have a new part time job? Are you getting offers to buy it? Have the Bogleheads and MMM'ers started a petition yet to make you remove any portfolios that include gold? :)
Thanks for checking in!

Yeah, I've been taking a bit of a hiatus from writing new articles while I have some other things going on, but it's not in full "set it and forget it mode" by any means. I designed it from the start to be a little more tool than blog so that I could avoid getting caught in the publish or perish loop, and I guess I've just been taking advantage of that lately. I do have a few post ideas and also some new international data to play with, and I imagine I'll update things soon. Any special requests?

No purchase offers yet. Maybe I'll get there some day. And when it comes to gold, I've learned to enjoy being the bad guy who supports it with, like, data and stuff. :twisted:

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Smashter
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Re: Portfolio Charts

Post by Smashter » Fri Aug 18, 2017 9:50 am

But it has no real returns and you can't eat it!!!

No special requests. I look forward to reading whatever you post as you get around to it.

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Fish
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Re: Portfolio Charts

Post by Fish » Tue Sep 19, 2017 2:55 pm

Tyler9000 wrote:
Tue Feb 07, 2017 12:59 pm
Fish wrote: I'd like to suggest an all-cash portfolio...
I'll have to think about how to message it, but I like the idea.
I discovered your blog post on cash when Rocky mentioned it in his journal.

Thanks for taking the time to write that. For me the most interesting and counter-intuitive part was learning that cash (in a savings account, not under a mattress) historically could sustain a 30-year retirement at a 4% SWR, though with guaranteed capital depletion. This result seems very unlikely under current conditions, but it is helpful context to augment my personal experience with money, which starts in the mid-2000s.

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Tue Sep 19, 2017 6:23 pm

Yeah, cash is one of those things that I think people who grew up with today's very low rates really have no historical context for. I wouldn't count on exclusively using it for a 4% SWR today, but I also wouldn't assume it always returns next to nothing. It's a lot more dynamic than most people realize.

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distracted_at_work
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Re: Portfolio Charts

Post by distracted_at_work » Thu Sep 21, 2017 10:10 am

Hi Tyler, pardon me if this has been asked or previously clarified.

In the calculators, if I change my country of choice to, for example, Canada and then set my portfolio weightings does the World option now include the U.S? My goal here is to run the calculators using my split of Canada / World (incl. USA) 30/70. I'm concerned that I do not have a way to reflect the U.S holdings as the calculators show ex-US on the world option.

Or does using the North America part of the calculator essentially give me U.S holdings? Logic being that the U.S would dominate Canada/Mexico by sheer economy size anyhow.

Thanks.

Edit: Never-mind found the dropdown where I can choose if World includes U.S or not. :oops:

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Thu Sep 21, 2017 10:20 am

No worries! I'm glad you found the setting.

For the benefit of others who may have the same question -- the default setting is ex-US, but do you see that black box in the bottom right that says "xUS"? Click that, and select "ALL" from the dropdown. That will convert the World options to truly global versions including US stocks.

"North America" in the calculators includes data from the US + Canada. But Canada only represents about 7% of that group by market cap, so it is definitely dominated by US stocks.

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jennypenny
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Re: Portfolio Charts

Post by jennypenny » Thu Oct 19, 2017 5:28 am

@T9000--Did you change the Golden Butterfly allocation? I thought it was LCB not TDM. Did I miss a post?

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Thu Oct 19, 2017 11:07 am

I changed a few portfolios to reference TDM instead of LCB back when I started adding other countries to the calculators simply to make it a little more obvious for non-US investors how to translate portfolio ideas to other countries. But the underlying idea has not changed, and practically speaking TDM and LCB should be interchangeable with very little impact on the final performance.

BTW, any ERE fans outside of the US might want to check out the latest site update: https://portfoliocharts.com/2017/10/16/ ... new-light/

liberty
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Re: Portfolio Charts

Post by liberty » Thu Oct 19, 2017 11:58 am

@Tyler9000 Your site is brillant - thanks for the service you provide! Do you have any backtest on dynamic allocation? Like for example trend following? Could be something like: Hold stocks when stocks are trading above 200 days moving average, otherwise hold short-term bonds.

ThisDinosaur
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Re: Portfolio Charts

Post by ThisDinosaur » Thu Oct 19, 2017 12:07 pm

Hey Tyler, any previews about what other changes you have in mind for the future? Are there data for more countries on the way? (>cough,cough<japan)

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Thu Oct 19, 2017 5:21 pm

@Liberty -- the thing holding me back from dynamic allocation calculations is the annual data, as you really need monthly numbers to do it justice. It's actually a good time of year to look into finally making that switch, so maybe I'll start on that sometime soon.

@ThisDinosaur -- In general, I think the next section that needs some international love is the Assets. I'm still figuring out the best way to handle it, but at the very least some new ETFs for each asset domiciled in various countries would be nice. I can find British and German options on justetf.com, but if any Canadians or Aussies have recommendations please drop me a PM.

And your Japan data request is duly noted. :) After studying which countries visit the site most, I'm also looking into Italy and Sweden. Hopefully I can release a new batch of countries after the new year.

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