While I agree that getting the balance wrong is suboptimal, I don't think you lose much by being off by a little. It's like DCA'ing into an index fund. Basically guaranteed to be wrong on every single acquisitionI understand the basic nature of this game, but the problem is you get the balance even a little wrong for your actual investment period, then thanks to your high degree of leveraging it can backfire pretty badly.
Performance is relative. You probably did great. What managed futures fund did you use back then?I don't disagree with you. Back then I did in fact avoid bonds, and basically used a combination of a stable value fund and commodities futures where others would have been using bonds. And basically, it worked in the sense I did better (not great, just better) when things went bad. And then when real rates were better, I basically dumped all that for TIPS.
Don't blame you at all for wanting to keep things simple. You and I might also be at different life stages. Also, I look at bonds/futures as vestigial components to my long term return but vital for risk management. The idea is that with their negative correlation with stocks, I will have greater rebalancing alpha.However, I personally am uninterested in trying to juice my long-term "risk" portfolios with combinations of long-term bonds, commodities futures, and so on, plus a bunch of personal leverage. I am what I would call a moderate value investor, and I do see that as a way of being mildly more leveraged. But that's as bold as I want to be when it comes to long-term portfolios. Anything else, I believe, is putting too much pressure on me to guess the right mix of assets for an uncertain future.
If things get tight where I'm worried of getting margin called, then I can just liquidate the bonds/futures and let the stocks ride through the dip. Also IBKR lets you create a conditional order to sell one asset if another experiences a certain price drop. The likelihood of both bonds/futures correlating positively with stocks WHEN stocks are in the biggest dips is pretty low. So minimal chance of permanent losses
Statistics: Posted by Stacked_Tendies — Thu Dec 04, 2025 12:29 am — Replies 41 — Views 3416