Portfolio Charts site - amazing resource

[kevink]

I looked for discussion of this site on the boards and didn't see anything, so apologies in advance if I missed it.

Tyler, the fellow behind this site, has posted at length over on Bogleheads and in the Mr. Money Mustache forums. He's come up with portfolio analysis and construction tools that are orders of magnitude more sophisticated than anything else I've found. Be forewarned that you may find yourself spending a sizable chunk of time using the tools and reading through the great commentary.

Here's one point of entry:

https://portfoliocharts.com/2016/03/07/the-ultimate-portfolio-guide-for-all-types-of-investors/

And here is another with some pretty amazing calculators (I'd start with the one on withdrawal rates):

https://portfoliocharts.com/calculators/

Not the least interesting take-away is that all of the portfolios that combine high SWRs with low volatility include a substantial allocation to gold. Controversial as you might expect (there's a six page thread on the winning Golden Butterfly allocation on MM Mustache forums) but Tyler's number crunching and data sources appear to be impeccable.

Would be very interested in hearing from any others who've used these tools.

 

[SoReady]

I have been following the development of portfolio charts and find them amazing. I think Tyler is an excellent communicator and enjoy his insight.

I also find it interesting that the Golden Butterfly is so successful compared to the other portfolios. I struggle with holding so much gold. In fact at this stage I struggle with thinking of acquiring gold at all. I'm waiting for the masses to weigh in on the virtues of this portfolio.

I went to MM forum but couldn't find the discussion on golden butterfly (actually I find his site confusing). Could you post the link to the GB discussion?

 

[donheff]

That is a fun site.

 

[Alan]

I think it was discussed in May, but well worth another discussion.

http://www.early-retirement.org/forums/f28/interesting-site-portfoliocharts-com-82091.html

 

[Dwhit]

I've always wondered how investors adjust to periods like the 80's/90's when the interest rate was high. Does the typical retiree stick with stocks, or do they move to a guaranteed investment with a ROR of say 8% or better? As I recall stocks were pretty flat during that period.

Is there an interest rate level where you would jump out of stocks?

 

[sengsational]

I've got to get on this site when I get a full sized screen...looks like it could validate an asset allocation.

 

[Sunset]

I've always wondered how investors adjust to periods like the 80's/90's when the interest rate was high. Does the typical retiree stick with stocks, or do they move to a guaranteed investment with a ROR of say 8% or better? As I recall stocks were pretty flat during that period.

Is there an interest rate level where you would jump out of stocks?

Yes, hindsite is so great.
In my hindsite portfolio, I bought Apple, microsoft, Cisco, when it first showed up, and FB after it fell post IPO.

I think the typical retiree would rebalance, so they would sell the bonds each year to re-balance ending up raising their stock number.

 

[kevink]

I have been following the development of portfolio charts and find them amazing. I think Tyler is an excellent communicator and enjoy his insight.

I also find it interesting that the Golden Butterfly is so successful compared to the other portfolios. I struggle with holding so much gold. In fact at this stage I struggle with thinking of acquiring gold at all. I'm waiting for the masses to weigh in on the virtues of this portfolio.

I went to MM forum but couldn't find the discussion on golden butterfly (actually I find his site confusing). Could you post the link to the GB discussion?

Here's the link to the Golden Butterfly thread on MMM forums:

Portfolio Charts - The Golden Butterfly

Jacob and friends at Early Retirement Extreme have a perhaps more useful (and certainly less contentious) discussion of the same topics:

Portfolio Charts - Early Retirement Extreme Forums

You most definitely don't want to poke around the Portfolio Charts site on anything but a desktop computer or a laptop with a sizable screen. The more time I spend on the site the more grateful I am to Tyler for making it available. The ability to really see what it would have been like to live with various portfolios over every possible time frame is great.

Obviously (see the MMM thread!!) the biggest issue Boglehead types (I assume most of us on this board, and without a doubt most on the MMM forums) have with not just the Golden Butterfly but all of the most successful (in terms of risk: reward and SWR's) on Tyler's site is the substantial allocation they all have to gold. I held the Permanent Portfolio for about 5 years myself and hated dealing with the gold allocation myself. The GB allocation is a more stock-savvy iteration of the PP, and Tyler makes it easy to play around with other variations to get to something you can live with. If you stick to stocks and bonds you have to take on managing the complex slice-and-dice of Merriman's Ultimate Buy & Hold or the ultra-severe tracking error of Larry Swedroe's most recent iterations of the Larry Portfolio (70% 5 year Treasuries, 30% stocks made up entirely of International Small Value and Emerging Market Value) to even get close to the historical performance of the top allocations containing gold.

Tyler has listened very patiently to all of the objections to these approaches and does a great job of explaining the logic behind the GB here:

https://portfoliocharts.com/2016/04/18/the-theory-behind-the-golden-butterfly/

Personally I'm not ready to sign on for the hassles of owning 20% gold or the tracking error, lack of international equity exposure, etc. involved but I'm afraid that's more reflective of stubbornness on my part than anything else.

Interestingly - and tellingly - Tyler says that professional financial advisors have ended up being perhaps the biggest group to contact him about the site. You can see why, as the tools provided by the big brokerage houses are kindergarten level compared to what Tyler has constructed.

 

[GrayHare]

Too bad site access is via https only, which limits the browser options and therefore the audience.

 

[target2019]

Excellent learning and teaching tool.
+1

 

[Dwhit]

It is an interesting site

 

[Hamster]

Too bad site access is via https only, which limits the browser options and therefore the audience.

Is there actually a browser that doesn't support https? If there is, it certainly isn't one that is widely used. This can't be much of a limitation.


Sent from my iPad using Early Retirement Forum

 

[UpAnchor]

I've always wondered how investors adjust to periods like the 80's/90's when the interest rate was high. Does the typical retiree stick with stocks, or do they move to a guaranteed investment with a ROR of say 8% or better? As I recall stocks were pretty flat during that period.



Is there an interest rate level where you would jump out of stocks?

I don't know. But I sure wish I'd had more money to plow into stocks at the time. As for the 8%, we all view that in a much different context today than we did back then when no one knew where rates were going. Many - if not most - thought they'd be unlikely to see rates as low as two or three times what they are today.

Interestingly, somewhere I still have a book of loan amortization tables from "9% to 22%". I suppose that range was deemed adequate to cover all loan terms envisioned going forward from the time of publishing. And it was understandable. At the time I was in the process obtaining a mortgage on a new condo. Fixed 30-year mortgages were 17% if I recall correctly. I rolled the dice on a 15.5% variable and it paid off as rates turned around. But the initial weeks or months had me wondering if I was the town idiot.

 

[Sunset]

Too bad site access is via https only, which limits the browser options and therefore the audience.

What browser are you using ? https is a standard used for sending your information between your computer and the server you are viewing as encrypted.

 

[Totoro]

Fixed 30-year mortgages were 17% if I recall correctly. I rolled the dice on a 15.5% variable and it paid off as rates turned around. But the initial weeks or months had me wondering if I was the town idiot.

How different the world must have been in terms of financial projections, seems surreal today. In the news here there are a few thousand mortgages that have a negative interest rate currently.

As a random remark: banks know people value certainty more, so in general fixed mortgage rates are priced worse (higher margin for the bank) than variable ones.

Not the only factor in deciding, obviously.

 

[COcheesehead]

Fascinating. Gives you food for thought. Thanks for posting.

 

[Sunset]

How different the world must have been in terms of financial projections, seems surreal today. In the news here there are a few thousand mortgages that have a negative interest rate currently.
...

I'll take a few trillion in a mortgage at negative interest rate, I'd like to buy a country or two and be paid for doing it

 

[gzone]

Thanks for sharing!

 

[GrayHare]

What browser are you using ? https is a standard used for sending your information between your computer and the server you are viewing as encrypted.

When there is no sensitive personal information being transmitted https offers no benefit over http. I think the recent https fetish got started by some ill-informed group that thought https surfing would somehow prevent snoops from seeing your actions. FB, NSA, etc. won't be blocked simply by https.