I didn't say that... but what the poster who did was saying was that letting the risky assets run up by not daily rebalancing increases your exposure to risky assets (which of course it correct and is why the larger rebalancing bands can show a 'bonus', because they increase risk they come with increased expected return) and thus risk.{sigh} We seem to be talking in circles. You implied that my strategy may introduce more risk because "daily rebalanced {all-in-one} fund keeps exposure to the defined risk extremely tight and consistent" as you put it. I merely pointed out that I don't think my multi fund portfolio with threshold rebalancing has any more of the "defined risk" you brought up and may actually be less than a BH 3 fund portfolio.Why would you think you are paying to reduce 'risk' (not sure what you mean by that anyway)? You are paying for convenience and offloading responsibility for managing it - and frankly you aren't paying that much these days.
Except the chart does really show you that there is any sort of consistent pattern of momentum - sure it makes it easy for people to see what they want to believe in it, but that isn't a substitute for actual analysis. People chasing those asset classes have left us with a nice trail of abandoned 'asset classes' (if I remember correctly the portfolio your paper's author recommended back in 2008 featured a nice slice of commodities, it was trendy until it wasn't...)The chart in the OP shows fairly significant difference in annual returns, +41.3% for REITs vs. -2.2% for EM in 2021 for example. A calendar rebalance or a three fund portfolio would be less likely to benefit from that discrepancy. Plus I've been monitoring a mock portfolio almost daily for 3 years observing the daily, weekly, monthly ebb and flow of the various ETFs.What makes you think all those categories you call 'asset classes' should have distinct periods of momentum swinging their way and why?
Statistics: Posted by avalpert1 — Mon May 20, 2024 11:22 pm — Replies 56 — Views 2745