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09-12-2013, 06:03 AM
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#1
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Recycles dryer sheets
Join Date: Sep 2010
Location: Allen Park
Posts: 118
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optimal portfolio mix?
Has anyone tried different portfolio mixes in the 'Your Portfolio' section to try and find the most optimal mix based on history,(since 1927)? It is interesting how much your results will change based on small percentage changes to your mix.
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09-12-2013, 06:40 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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 Quote:
Originally Posted by robbridg
Has anyone tried different portfolio mixes in the 'Your Portfolio' section to try and find the most optimal mix based on history,(since 1927)? It is interesting how much your results will change based on small percentage changes to your mix.
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Optimizer results are notoriously sensitive to small changes that don't really matter in the real world. What you are seeing is how to datamine the past to trick yourself into a sense of security. Instead of moving your equity allocation 2.5632% to jibe with optimizer results, I think you would be better off taking the general lessons of what firecalc can tell you (over 60% equity allocations have done better in the past or whatever).
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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09-12-2013, 07:00 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Bernalillo, NM
Posts: 2,717
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Quote:
Originally Posted by robbridg
Has anyone tried different portfolio mixes in the 'Your Portfolio' section to try and find the most optimal mix based on history,(since 1927)? It is interesting how much your results will change based on small percentage changes to your mix.
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I guess I believe in the existence of an 'most optimal' portfolio mix about like I believe in the Easter Bunny. As the idiom says "You pays your money (and you takes your chances)"
__________________
"We live the lives we lead because of the thoughts we think" ...Michael O’Neill
"We can cannot compel others to do our will" ....Norman Goldman
"There never is shortage of the gullible to accept the illogical"...Anonymous
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09-12-2013, 07:22 AM
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#4
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gone traveling
Join Date: May 2012
Location: Fairfax, VA
Posts: 209
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Quote:
Originally Posted by brewer12345
Optimizer results are notoriously sensitive to small changes that don't really matter in the real world. What you are seeing is how to datamine the past to trick yourself into a sense of security. Instead of moving your equity allocation 2.5632% to jibe with optimizer results, I think you would be better off taking the general lessons of what firecalc can tell you (over 60% equity allocations have done better in the past or whatever).
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Totally agree with this. I think that its probably more relevant to optimize ones spending and withdrawal strategies, than it is to optimize an EXACT asset allocation.
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