Early Retirement Extreme Forums

Aha ... this is tuning. When tuning you want to run a parameter study of 1%, 2%, 3%, ... all the way up and plot profits as a function of bracket size. If that diagram looks like noise (several random peaks), there's nothing there there... if it looks like a smooth function, there's definitely something there (unless your data set is too small and you're just getting aliasing effects).

Seeing all the graphs on one page is awesome, thanks again Tyler9k!

Thank you Tyler, this website is badass! This might just be ERE Porn.

Curious, could you not find enough data for Vanguard Total bond market?

I'm glad you like it!

While Total Bond Market data does exist, over the past year I've moved exclusively towards my own bond models using public interest rate source data. It's partly to maintain data consistency across countries and partly to avoid any potential copyright issues. But if anyone knows a good free source for corporate bond historical interest rates, feel free to PM me!

BTW, @Jacob, I really like your perspective on tuning and the sensitivity of the model to a certain parameter. I'll have to think more about that.

Recieved this article in Jesse Felders weekly email that I think makes a good point. For most people a portfolio that they can sleep with and thereby actually compound makes much more sense than aggressive allocations.

This Bloomberg article suggests 35% stock 65% bonds. But as Tyler's site and charts have shown why not throw in some other asset classes in the mix?

https://www.bloomberg.com/opinion/artic ... eee612f51a

That's pretty good! I completely agree that the best portfolio is not the one with the best theoretical numbers in a behavioral vacuum but the one you're actually able to stick with. There are lots of great low-stress options with competitive returns, so it's nice to see people challenging the typical stock dogma.

Started a thread about a JPM "Guide to Retirement" that looks like it could very well have taken some ideas from @Tyler's pages.

viewtopic.php?f=3&t=10533

@Tyler9000

I can't help but notice that the GB's performance in draw-down seems to be lagging(ie near lowest or even below previous lows of it's performance since 1970) in most start dates over the past 20 years. No doubt this has something to do with the fact value investing seems to have taken a back seat to growth and the perpetually low bond/cash yields of the past decade. Maybe that trend will turn around in the next recession? Still, I'm curious if recent trends have you reevaluating your portfolio.

Yeah I noticed that with the last data update. I do think about those kinda things, and I like the Rolling Returns chart for looking at trends. Look at that with 10-year rolling returns, and you'll see a slight downtrend since the early 80s but nowhere near most other portfolio options. The thing about consistent portfolios that operate in a tight band of uncertainty is that relatively minor low points can be more noticeable than in highly volatile portfolio options where the spread of returns is a lot more extreme. So in this situation it doesn't really worry me and I wouldn't be surprised if it pops back up this year since negative years overall are pretty rare.

I've been considering adding an REIT fund to my own portfolio for a while now, but it's unrelated to recent performance.

Holy crap Tyler9000! I'm gonna be up all night play'en, thanks!

Edit: This withdrawal calculator is a dream come true for a class investor like myself. In case you care, my personal portfolio came in at #6.

I have some time saved tonight at the hotel to start playing with the update. Can’t wait

Thanks T!

Glad you like it!

For anyone who hasn't seen the latest update, the ERE crew may find it particularly interesting as it covers flexible spending models in retirement.

With as much time as I've spent building this one, I'm just glad to finally be sharing the results so that others can join the party staying up late looking at this stuff.

After spending a lot of time on portfolio charts over the past couple of days, I just want to reiterate how awesome this spending model calculator is, particularly for those taking the semi-ERE route. I'll mention it in my next journal update as well, because anyone who invests in noncorrelating asset classes AND wants to take the semi-ERE route really needs to spend some time with this. It allows tweaking of two variables, AA and flexible WR to see what has historically best fit personalized goals. Visualizing the results has already had an impact on my near-term plans.

Tyler made some cool updates to the Assets section if any you haven't seen them.

@Tyler--I love the new all-encompassing 'My Portfolio'. I've spent a LOT of time playing around with it.

Yeah, I recently saw Classical Liberal mention in his journal studying individual assets in the charts. I was already neck-deep in asset calculator experiments to the point of pressing the pause button, and that little bit of unintended encouragement helped push me over the top.

The My Portfolio tool is indeed pretty fun. I've used a personal version for years, and I'm glad I was able to slim it down to something that works online.

Looking at the site traffic, I'm impressed by the number of visitors I get from Italy and Spain even without offering any data for those countries. I'd love to remedy that! My roadblock is good bond data, as apparently life was too good there to bother tracking interest rates before the mid 80's. Even the info from their central banks is kinda sparse and all my normal sources seem to come up short.

But getting into the weeds of Euro country credit ratings, it made me wonder if I'm barking up the wrong tree. German bonds (government Bunds) are generally considered the benchmark in Europe, and frankly Spanish and Italian bonds may not have always met normal investment grade criteria followed by most bond funds. I know some European PP investors prefer German bonds to their own local options, and to me it seems similar to how US investors might value safe treasuries over corporates or muni bonds. And browsing Justetf, German bond and money market funds do seem to be available to Italian and Spanish investors through XETRA.

So I have a few questions for European investors -- Would you find value in a portfolio calculator that has stock data for your own country and translates the numbers to your own inflation and exchange rates if the bond numbers are only for German bonds? Are Bund trackers easily accessible outside of Germany? And what are the potential drawbacks to that approach? I'm living in a US bubble and could use a local perspective.

@Tyler - Former European now Aussie here (and probably Seppia, Dunkelheit or Iopsi are better placed to answer). First of all thanks for such a wonderful tool

I used to have a Euro PP back in the day. I had a Stoxx European Monetary Union (EMU) ETF for the stock component. Maybe looking at an EMU stock index would be a viable consideration to expand the reach of Portfolio Charts?

For the Bond component I used a Long Duration German Bund ETF, exactly for the reasons you mentioned above.

Thanks for the feedback!

The calculators don't have a pure EMU stock option, but they do have Europe (including a few non-Euro countries like the UK) which is pretty close. BTW, I'm also looking at getting Australia back on the list.

Tyler
First thanks again a million times for what you are doing.
I think inflation rates by country could be helpful, in particular for those who live in countries that have received a boost by joining the euro area. This would mean mostly developing smaller countries (Slovenia, Slovakia, etc) + Spain, who’s had a sneakily huge development since the early 2000’S.
For the other big ones in the euro area (France, Germany, Italy) inflation rates have kind of converged since the introduction of the euro, so Germany inflation is a good proxy for Italian one.
Having local bonds would also make sense, and I would maybe prioritize it over local inflation rates, because yields are very different (the spread between Germany 10y and Italy 10y is currently 260 basis points and went up past 300 at times https://countryeconomy.com/risk-premium/italy )
If I have to take a wild guess at what your typical visitor profile looks like, I would also try to introduce a tracker of a basket of euro area bonds.
To simplify:
No one in Italy buys exclusively German bonds
Most people in Italy buy exclusively Italian government bonds, but we are talking about senior people that will probably never visit your site
I would guess most people visiting your site from Italy would buy a basket of Euro bonds via an index fund.
I would suggest using the largest etfs here
https://www.vanguard.nl/portal/instl/nl/en/product.html
Or here (you’ll need to use a translator)
https://www.ishares.com/it/investitore- ... oduct-list

The great thing about vanguard and Ishares in Europe is that the biggest etfs are always listed in three currencies (in London, in Switzerland and in an euro country - usually the first one is holland), so that you can track their performance in the three main currencies.
Here in Europe, ishares has been doing indexes for longer than vanguard FYI.

Hope I answered your main questions but please let me know if you need any additional info.

P.s. I would love to think that the accesses you get from Italy are also due in part to the “promotion” I do no my blog
It’s a small blog but it is 100% Italy focused (it’s in Italian) and I get somewhere between 400 to 500 clicks a day.

For international investors (any holdings in another country) I would absolutely recommend creating the ability to gauge performance in the investor's currency. It's not cool if your portfolio in Elbonia appreciates 15%/year if the ELBUSD, say, exchange rate changes by a similar rate.