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Old 10-15-2020, 05:15 PM   #21
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Originally Posted by Koolau View Post
Not sure I read your post correctly. Is your goal to invest all your cash 100% in equities or is goal to invest your portfolio 100% in stock? If 100% stock portfolio, I guess I would at least consider more like 80/20. Heh, heh, mine in FIRE is more like 30/70 so take what I say w/grain of salt. Just wondering what your approach is. As always, I won't offer advice because YMMV.


My goal is to invest $50K currently in cash into equities. I will still have cash buffer for ~8 months emergency. Just want to deploy more into the market with DCA and spread the risk by buying the market vs. individual stocks.
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Old 10-15-2020, 06:10 PM   #22
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Originally Posted by pb4uski View Post
I'm a fan of SWAN. Basically, they rebalance semi-annually to 90% mid-term Treasuries and 10% SPY 6-month and 12-month call options. In general it provides a return in the ballpark of the SPY but with less volatility and good risk-adjusted returns.

Blue line is SPY, red line is SWAN. Downside... it has only been available since late 2018 so limited real world history, but what there is is pretty good. Index data goes back to 2005 for the curious. 0.49% ER. YMMV.

https://amplifyetfs.com/Data/Sites/6..._FactSheet.pdf
I agree it looks good for it's short history with interest rates dropping, but then the long term treasury funds look good since then also. If/When interest rates go up, this one may be in trouble. Hard to know for sure.
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Old 10-15-2020, 08:52 PM   #23
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These days, I am gambling (repeat: GAMBLING) on VIG in taxable-land (because of qualified dividends) and NOBL in Roth-land (because I could not find dividend details). The common theme is reliable (so far) dividends, associated with decent LTCG.

SS is my 'bond' fund.

As always, I may be wrong.
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Old 10-15-2020, 08:59 PM   #24
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If we did not have Max SS, I would go back to Wellington.
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Old 10-16-2020, 06:11 AM   #25
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Originally Posted by OldShooter View Post
You seem to be a pretty conservative guy. How big a % of your total portfolio do you have in this fund with (IMO) almost no history?

Also, have you tried to estimate the duration of the bond portion? That would be an interesting number but I am not a bond guy and have no feel for estimating it.
Right now it is pretty low... only about 5% currently, but I was totally out of equities when I first started adding SWAN to some of our accounts. I'm pretty familiar with the general strategy of combining bonds and call options from my involvement in financial management of equity indexed annuities in the 1990s so the short history of the fund isn't a big concern to me.

On your question on duration:
Quote:
The U.S. Treasury securities portfolio is composed of U.S. 2-, 3-, 5-, 7-, 10- and 30-Year Treasury securities that cumulatively provide a portfolio duration that matches the initial duration of the U.S. 10-Year Treasury Note. This duration was selected as the Index’s target duration based upon the principle that the return on intermediate-term U.S. Treasury securities tends not to correlate with those of the U.S. equities markets.
----------------------------------------------------------------------------------

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Originally Posted by VanWinkle View Post
I agree it looks good for it's short history with interest rates dropping, but then the long term treasury funds look good since then also. If/When interest rates go up, this one may be in trouble. Hard to know for sure.
You can say the same of a 60/40 AA portfolio....when interest rates rise that the 40% bond component will "be in trouble"... but it is offset by gains on the stock side because the Fed will increase interest rates only if the economy is doing well.

Same thing for SWAN. If rates go up it will be because the economy is doing well, which bodes well for stocks... so the SPY calls will do well. Keep in mind that by their very nature the calls are leveraged... for example at April 30 the fund held $23m in calls that cost $25m but the notional amount was $174m... so the calls will give the fund the price appreciation of owning $174m of SPY.

While the fund has only been around for a couple years, the index goes back to ~2005 and broadly tracks the S&P 500 total return with less volatility.
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