Different portfolio allocations during drawdowns

[Hustle_]

Maybe a year ago I saw on here a really useful table which showed the performance of a handful of different portfolio allocations during some historic major selloffs? Spent probably an hour looking...

[eyebeebe]

I can’t post a link, but I know the one you mean. It was posted by Derek Chevalier in case that helps.

From what I remember 60:40 equites:fixed income (perhaps with a factor tilt) performs best. Per my post a couple of days ago on the retirement finances thread, backtesting that allocation over 102 48 year periods and Monte Carlo simulations using historical returns and volatility, backs that conclusion up for a world tracker and EUR bonds portfolio (my base currency will be EUR).

[Jon39]

Hustle_ said:

Maybe a year ago I saw on here a really useful table which showed the performance of a handful of different portfolio allocations during some historic major selloffs? Spent probably an hour looking...

-- Deleted --

Historical facts are clearly not required.

Edited by Jon39 on Thursday 19th February 10:56

[eyebeebe]

Jon39 said:

Many PHers seem fixated on 60%/40%; 70%/30% etc.
In my experience, it's not the percentage that is important, but the assets in which we invest.

Look at the 2008 market crash/selloff.
The reduction in shareholders income would have varied considerably and it had nothing to do with percentages.
For example, the banking sector reduced payouts enormously, whereas many businesses in consumer essentials continued as if there were no problems.

Thank you for once again reminding us Jon that you have returns that would make Buffet and hedge fund managers the world over blush.

The reason to be “fixated” with percentages is because it is what is proven to work, for those not blessed with guru levels of stock picking, either by back testing through historical periods or running Monte Carlo simulations.

[Phooey]

eyebeebe said:

I can t post a link, but I know the one you mean. It was posted by Derek Chevalier in case that helps.

From what I remember 60:40 equites:fixed income (perhaps with a factor tilt) performs best. Per my post a couple of days ago on the retirement finances thread, backtesting that allocation over 102 48 year periods and Monte Carlo simulations using historical returns and volatility, backs that conclusion up for a world tracker and EUR bonds portfolio (my base currency will be EUR).

If it s the one I m thinking of I m sure it had a tilt to small-cap value and possibly EM. I don t think it was overly complicated, something like 3 or 4 components to equities and a dollop of Global Agg. I don t think it had any gold.

Edited by Phooey on Thursday 19th February 19:45