6 ms·

It's cheaper to just mix in more bonds.

• mruts 7y ago
  A 60/40 equity/bond portfolio is going to underperform the market pretty significantly most years. Historically, 60/40 has outperformed the market slightly looking back 40-50 years. Risk parity is probably a better idea and should give you recent returns with some downside protection. The problem is that rebalancing could be costly, you probably would only want to on a yearly basis. But if you have access to leverage via shorts, I still think that’s the better play. My personal investments do nothing of the sort though: I just go with a 3x leveraged S&P ETF. Annualized returns of around 20% year over year. Of course, I have massive exposure to volatility and market crashes. But in the five years of investing all of my money in this strategy, I’ve outperformed the S&P by over 80% :)
  • mywittyname 7y ago
    The past five years has been one of the best forming markets ever. I would not assume a strategy which worked well since 2014 will continue to do well until 2034.
    • mruts 7y ago
      Maybe it wouldn’t work if you are starting today, but I hsve enough returns built up that I should be able to experience a major depression and still beat the S&P. Assuming that the market doesn’t go down more than 33% in a day.