Bridgewater's All Weather Portfolio Vs. Harry Browne's Permanent Portfolio [View article]
You are right on both counts:
1). we took a simplified approach in this example to equal weigh assets instead of risks. This is for illustration and make it comparable with Harry Browne's permanent portfolio. In the real risk parity all weather portfolio, the weights should be derived through the risks (such as volatility) instead. Depending on the choices of long bonds vs. intermediate bonds etc., the weights will be different and equities will get lower weights (but not that much lower if long bonds such as TLT or LQD is used).
2). EM debt spreads should be really long EM and short US and Corporate debt spread should be long Corporate bonds (mostly high yield depending on how you want your portfolio) and short treasury bonds/notes. Again, to implement/showcase this using vanilla mutual funds and ETFs, these were simplified.
Bridgewater's All Weather Portfolio Vs. Harry Browne's Permanent Portfolio [View article]
We did take 25% for each category and equal weight among those assets in the same category. For example, in the Growth-Rising category, each of the four assets in the box is spread with 25%/4=6.25% weight.
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excellent choice. PRWCX is ranked 5 star by MyPlanIQ: http://bit.ly/OO5uJN. By the way, the plan does not have this fund as one of the choices? Can you confirm?
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This would be my response:
1. The Motley Fool has a pretty broad distribution and it may be frivolous but it's worth measuring and making a comment. Maybe for the long time investors it's seen as junk but many people take it seriously.
2. Even if you think the choices are specious, it provides some contrast and hopefully spreads some light.
3. I have written articles on the best of the dividend stocks and the question then is whether they are over-priced.
It wasn't available when we started. As you know ETFs choices have grown rapidly and SIB was meant to be a simple benchmark. It's a fair point that we might want to tune the SIB because it has done pretty well and perhaps we could squeeze more out with tuned fund selection.
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Bridgewater's All Weather Portfolio Vs. Harry Browne's Permanent Portfolio [View article]
1). we took a simplified approach in this example to equal weigh assets instead of risks. This is for illustration and make it comparable with Harry Browne's permanent portfolio. In the real risk parity all weather portfolio, the weights should be derived through the risks (such as volatility) instead. Depending on the choices of long bonds vs. intermediate bonds etc., the weights will be different and equities will get lower weights (but not that much lower if long bonds such as TLT or LQD is used).
2). EM debt spreads should be really long EM and short US and Corporate debt spread should be long Corporate bonds (mostly high yield depending on how you want your portfolio) and short treasury bonds/notes. Again, to implement/showcase this using vanilla mutual funds and ETFs, these were simplified.
Thanks for the good comments.
Bridgewater's All Weather Portfolio Vs. Harry Browne's Permanent Portfolio [View article]
Please look at the weight table in the article.
Thanks
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1. The Motley Fool has a pretty broad distribution and it may be frivolous but it's worth measuring and making a comment. Maybe for the long time investors it's seen as junk but many people take it seriously.
2. Even if you think the choices are specious, it provides some contrast and hopefully spreads some light.
3. I have written articles on the best of the dividend stocks and the question then is whether they are over-priced.
4. In the end, it's horses for courses I guess.
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Thanks.
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Thanks.