Portfolio Charts

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Wed May 16, 2018 9:48 pm

Maybe I can add some nice embossed Win95 buttons in the next update. ;)

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BRUTE
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Re: Portfolio Charts

Post by BRUTE » Thu May 17, 2018 1:40 am

and just reversing the shadows makes the buttons look clicked... mind blown!

jennypenny
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Re: Portfolio Charts

Post by jennypenny » Thu May 17, 2018 7:42 am

Just FYI ... some of the calculators are taking 20+ seconds to load on my mac. It's not a big deal, but maybe a Patience, Obi-Wan notice on each page would preempt complaints?

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Thu May 17, 2018 9:05 am

Hmm... it's working fine for me. I know MS OneDrive occasionally has regional server issues, so maybe give it a little time to sort itself out. There shouldn't be anything new in there that would account for slower performance on its own.

jennypenny
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Re: Portfolio Charts

Post by jennypenny » Thu May 17, 2018 9:12 am

Haha, so I'm the one who needs the patience reminder. :oops: As you said, maybe it's just coincidence that my neck of the interwoods happens to be slow the day I'm trying out the new interface. I'll let you know if it doesn't improve in a week or two.

Looks good, though. :)

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BRUTE
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Re: Portfolio Charts

Post by BRUTE » Thu May 17, 2018 3:28 pm

it takes ~5-10 seconds to load a calculator for brute, but it always has taken some time.

jacob
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Re: Portfolio Charts

Post by jacob » Thu May 17, 2018 3:35 pm

"Please step away from the monitor and wait while the system is calibrating local spacetime curvature..."

jennypenny
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Re: Portfolio Charts

Post by jennypenny » Fri May 18, 2018 6:24 am

Yeah, PC is loading very quickly this morning so it was definitely me yesterday. Sorry for doubting the technical capabilities of the all-powerful T9000. ;)

ThisDinosaur
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Re: Portfolio Charts

Post by ThisDinosaur » Fri May 18, 2018 8:05 am

Am I mistaken, or did the old version have an option for REITs/real estate outside the US?

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Fri May 18, 2018 10:45 am

They were always US REITs, and the calculator simply translated the numbers to local returns just like it does now. The new label just makes it more clear to avoid any confusion. That said, a good global REIT fund is also dominated by US holdings so the numbers will be reasonably accurate for that as well.

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BRUTE
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Re: Portfolio Charts

Post by BRUTE » Sat May 19, 2018 3:04 pm

how about a way to select average/median outcomes instead of the worst outcomes for the SWR calculations?
right now the calculator seems to use (as far as brute understands) the absolute worst run for any given portfolio to calculate the SWRs. this seems to favor very conservative/pessimistic portfolios heavy in gold and cash. brute would love to pick something else - clearly also not the best case, but maybe average or median make sense?

jacob
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Re: Portfolio Charts

Post by jacob » Sat May 19, 2018 3:31 pm

That would be quite easy to create. You merely have to input your acceptable failure rate(*). Firecalc does this, already, as an output. SWR is of course defined for 0% failures.

(*) Or code it so you generate a graph of WR vs failure rate. Those could be plotted too. The shape of various portfolio curves might be interesting/enlightening to look at.

liberty
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Re: Portfolio Charts

Post by liberty » Sat May 19, 2018 6:21 pm

Another suggestion: possibility to select specific sectors. Or just an option for "Non-cyclical stocks" that includes health care and consumer staples?

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Tyler9000
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Re: Portfolio Charts

Post by Tyler9000 » Sat May 19, 2018 6:23 pm

@ Brute & Jacob -- I'm really careful about presenting information that I think could be misinterpreted by over-eager investors, and there's some nuance to how sampling methods can skew the results with something like this. I'll have to think it through to make sure the output communicates the right message, but I really like the idea.

In the meantime, you can play with this indirectly using the Portfolio Growth calculator. Negative numbers in the contribution field count as an inflation-adjusted withdrawal. When the lowest line hits zero for a certain timeframe that's the SWR, and when it ends on the original portfolio value that's the PWR. So you can adjust the withdrawals and watch how the distribution of outcomes moves around.

@ Liberty -- I know Fama French does have some of that data, but I'll have to educate myself on the different sector fund definitions before I can realistically apply it. Sounds like a good project.

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BRUTE
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Re: Portfolio Charts

Post by BRUTE » Sat May 19, 2018 10:12 pm

Tyler9000 wrote:
Sat May 19, 2018 6:23 pm
In the meantime, you can play with this indirectly using the Portfolio Growth calculator.
that's how brute got to this. he was seeing similar (5.5%ish) SWRs for two completely different portfolios, one of which was 75% hedge, and the other 100% volatile equity. it makes sense that the worst cases are similar, but in the growth calculator, the equity portfolio tended to trend much, much higher in average (and obviously good) cases.

classical_Liberal
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Re: Portfolio Charts

Post by classical_Liberal » Sun Jun 24, 2018 11:00 pm

I've been using the Portfolio Growth calculator as the Retirement Spending Calculator as well, for the exact reasons stated above.

@Tyler9000
Something that may make the Retirement Spending Calculator more unique, and would be extremely helpful for me; let us tinker under the hood of WR's and add some "ifs" to the equations. I'd love to see how various portfolios play out with a "line(s) in the sand" regarding performance. I may be alone in this, but I doubt it. Given the interest of Semi-ERE in the overall FIRE community and the tenancy of many people (cough, cough) who ERE, then somehow manage to tangle themselves up in earning money again, there's probably an audience of users for this type of thing. After all how often do you read "ill just cut spending or get a part time job if..." If what and how much with various portfolios to make it meaningful? These would be good questions to answer from a historical standpoint.

I've read the ERN articles on the subject, but that doesn't help with choosing a portfolio consistent with real willingness to modify withdrawals (or even add to portfolio) based on performance. Something like an If option for minimum acceptable real value, or recent (historical) performance, then "X", what happens to outcomes. I realize this is, in a way, the antithesis of what you try to teach regarding stability of PP/GB in WR's. Instinctively, I want to think a more volatile, higher return portfolio is much better off in an environment of very flexible withdraws, but this probably is very dependent on level of flexibility. How do these things interplay? Edit: How would have adding more Gold, or small cap to my original portfolio changed the need for flexibility depth or length under less than ideal circumstances? IOW, this would allow a person to theoretically draw lines in the sand to avoid failures AND input a specific, personal level of flexibility given those circumstances.

I'm not sure how all your data plays out on the inside, but I would imagine if you are already calculating annual portfolio values and annual CAGR, it wouldn't be too difficult to add some ifs? Then again I'm no programmer!

wood
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Re: Portfolio Charts

Post by wood » Tue Jul 17, 2018 7:24 am

Thank you Tyler9000 for bringing this wonderful website to the masses. I've been playing arund with it lately in an attempt to design my own asset allocation. I have a few questions, issues and comments I'd like to share with everyone.

I'm from Norway and many of the assets are US-specific. How should I account for this when designing my portfolio assuming I will never move and live abroad?

I like the concept of The Golden Butterfly and Permanent Portfolio and similar portfolios that offer less volatile returns. The problem with these portfolios in my case is that I'm struggling to find suitable assets that can replace the ones quoted on the site.

Bonds/treasuries
I'm struggling to find a sensible way to purchase long term bonds. I could purchase domestic long term bonds but I can't find 30-year bonds. Only 10. Is that still long term? The other "low-transaction-cost" option is buying shares in bond funds but most of these offer a mix of short, Intermediate and long term bonds and they have a mix of government and corporate bonds. Some of these funds are domestic, others invest internationally. I also found a fund investing in international government bonds. Most of such funds require obscene amounts of capital if you want to invest, but I found one suited for small investors. Still, its a mix of short, medium and long term bonds.
Lets say I wanted to replicate The Golden Butterfly. How should I go about including bonds in that portfolio?

Real estate (RE)
I currently own real estate and manage it myself. This asset is not exactly liquid. But I came up with the idea that for rebalancing purposes I can adjust the mortage each year. This will adjust my equity in this asset class. So for example, after a run of good years in RE I can increase the mortage and put the excess cash into other asset classes in my portfolio for effective rebalancing. During downtimes in RE I would have to pay down extra on the mortage. Is this a good/bad idea?

Also, I've found that the returns I get on RE are better than the general market for RE in my area/country. Iow, I don't expect my own returns to match whatever data comes out in the official statistics for this market. This is based on 4 years experience and could be down to pure luck, but I believe it's not just luck because I can convert time and social capital for money in this asset class, which I'm willing to do. I see RE as a high risk/reward asset in my case. Would you agree?

One of the downsides with investing in RE this way, is that it's difficult to allocate less than say 25% to it because of my (small) target net worth, although ideally I'd allocate maybe 10%. I don't want to leave RE out of my portfolio because of the great returns I'm getting, at the same time my desire is to replicate something looking like the Golden Butterfly. Which assets are sensible to reduce in order to include more RE in a less volatile portfolio? I'm thinking less stocks because both stocks and RE in my case are both more volatile and correlated with each other. But then both gold and RE is a good hedge against inflation, so maybe replace gold with RE?

Current idea for allocation (which is far from current reality):
Cash/savings 13%
Bonds 10%
Gold 10%
Commodities 10%
Other 1%
Real estate 25%
Stocks 31%

Is it fair to say that...

- Gold and commodities play the same role in that both seem volatile over the long term and are uncorrelated with other assets? And that therefore, instead of allocating 20% to gold, I might as well have 10% in each further reducing volatility? Any downside to this idea apart from more transaction costs?

- Cash holdings are higher than what is typically recommended (I think) but we have some arrangements that can make cash yield more than what is typical elsewhere. I see it as an asset most similar to bonds then, agree?

Any critical comments to the above mentioned allocation are most welcome.

wood
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Re: Portfolio Charts

Post by wood » Tue Jul 17, 2018 7:29 am

On rebalancing:

I'm thinking to rebalance 1 or 2 times per year. But I also want to rebalance in cases where my allocation to stocks deviate e.g. 10% from my target (should I think in terms of percent, or percentage points?). Is there a downside to combining both of these rebalancing techniques apart from hassle and transaction costs?

Mister Imperceptible
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Re: Portfolio Charts

Post by Mister Imperceptible » Tue Jul 17, 2018 9:31 am

The tricky thing about commodities is that unlike gold and REITs, the instruments you own are complex and subject to decay.

https://portfoliocharts.com/portfolio/com/

But who knows, maybe the global grain glut reverses. Gold and REITs aren’t edible.

herp
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Re: Portfolio Charts

Post by herp » Tue Jul 17, 2018 9:54 am

I agree with Mister Imperceptible. I'm not a fan of commodities due to the lack of an internal rate of return. Unlike a bond that pays interest coupons or a stock that is backed by assets, earnings, and dividends.

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