Bootcamp #2 The Ultimate Buy and Hold Update 2024
ฝัง
- เผยแพร่เมื่อ 7 มี.ค. 2024
- Paul recommends new listeners listen to the previous podcast on Equities vs. Bonds (www.paulmerriman.com/stocks-v...) prior to this podcast.
The purpose of this annual update is to remind investors of the power of equity asset class diversification. Paul makes the case for the 10 equity asset class portfolio that he introduced over 25 years ago. During the presentation he uses Tables A1a (irp.cdn-website.com/6b78c197/...) and A2a (irp.cdn-website.com/6b78c197/...)
A1a shows the series of portfolios, starting with the S&P 500 on its own, and then the results of adding 9 other asset classes one at a time.
In A2a Paul reviews the Ultimate Buy and Hold results to 7 other portfolios that investors may select for better returns with fewer funds and similar volatility.
In both cases he shows the results with both annual and monthly rebalancing.
On the next podcast Paul will dig into the important differences of the risk and return for all 9 portfolios, including the S&P 500 as the single holding.
Paul will be monitoring the TH-cam video and will respond to questions there.
Disclosures
Data Disclosure Notice - Funds (1970-Present)- irp.cdn-website.com/6b78c197/...
Data Disclosure Notice - Indexes (1928-Present)
irp.cdn-website.com/6b78c197/...
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Thank you Paul for doing this! I'm sure it's painstaking but to hear the consistent theme and message is a blessing for me, my family, our future, and our portfolio.
Thanks Paul for your love and energy , very much appreciate it
From one teacher to another, God bless you sir.
Paul and your team. Thank you so much for this and all that you do!
Thanks Shawn. When you finish the series over the coming week I hope you will pass it along to others that find it helpful. Generally I find investors who appreciate a lot of evidence (engineers especially) find it meaningful data.
I'd love to see some discussion around the value of adding mid cap funds into the mix. They tend to be the forgotten middle child in financial planning.
In fact there are a lot of midcap stocks in the funds and ETFs we recommend. You can see some of that information in Chris' article on the real asset allocation from Morningstar data. www.paulmerriman.com/best-in-class-etf-recommendations#gsc.tab=0 There is nothing wrong with mid cap. By using small and large cap there is more potential impact from rebalancing. There are many thousands (maybe millions) of combination that should work. What I hope for you is you can find one that is comfortable and not get suckered into recent performance. Here is on of the best articles on the nature of performance by Ben Carlson, one of our recommended Truth-Tellers. And no we don't get anything from Ben for the recommendation ---but you will. awealthofcommonsense.com/2024/03/long-term-recency-bias/
@@PaulMerrimanSoundInvesting Thanks! I'll check those out.
Thanks for this terrific series. Do you feel that US SCV has been adversely impacted by private equity in the last 15 years?
Paul is talking I’m listening 👂
Thanks Jay. I hope you are willing to recommend our site to your clients.
What an awesome video. Too bad I’m 60. But in reality I could have 30 years and I want to leave legacy. Would this still apply to that kind of time horizon?
Also how would we go about finding funds for each category (e.g., what are examples of SVC, etc.).
Thanks so much.
Watch more videos. Basically for SCV 2 good options are AVUV and AVDV, from a fee perspective, profitability, size, momentum and other factors. Note, I am long these two funds
Sorry to hear you were in the hospital. Hope you are doing well, and staying healthy Paul! Get well soon. Also, do you think anyone will ever start a UB&H ETF to make the investment process a little easier?
No, fund management companies prefer to sell the latest hot theme because it's easier to sell an exciting story and they can charge more.
Paul has M1 Finance made UB&H pies on the his website. This is about the closest you will get to a UB&H ETF.
Thanks for this video and series, Paul! Why is the mid cap equity asset class not represented in your portfolios? Thanks in advance for your reply.
Actually our portfolios have a fair amount of mid caps in the mix. Please take a look at Chris Pedersen's 2023 article on the Morningstar asset class report on our portfolios.
www.paulmerriman.com/best-in-class-etf-recommendations#gsc.tab=0
Also more small and large on the edges makes more impact when rebalancing.
@@PaulMerrimanSoundInvesting Thanks again!
This is a response I made above: "I hope you will read Ben Carlson's article about recency bias. awealthofcommonsense.com/2024/03/long-term-recency-bias/ DFA has tracked growth back 30 to 50 years in U.S. and international growth. The advantage with large and small value is 2% to 3% per year over large and small growth in both markets. Of course our portfolio has lots of growth in the small and large blend asset classes. "
@@PaulMerrimanSoundInvesting Thank you, Paul!
I was here yo!
My questions/concerns relate to the benefit of adding international equities. The benefit shown from the additional diversification is because of the lack of correlation. However I think in the last 30 years it's been proven that international and US are HIGHLY correlated especially when markets get volatile. I also am curious why no studies using the growth category instead of value. Wonder how it would look using SCG vs SCV or LCG vs LCV?
I hope you will read Ben Carlson's article about recency bias. awealthofcommonsense.com/2024/03/long-term-recency-bias/ DFA has tracked growth back 30 to 50 years in U.S. and international growth. The advantage with large and small value is 2% to 3% per year over large and small growth in both markets. Of course our portfolio has lots of growth in the small and large blend asset classes.
Sir, if we get into a world war situation, a big one involving China and Russia for example, which portfolio would historically do best under those conditions? If you have a surmise, I'd like to hear it. If you can point me to data showing what happened with stock sectors or particular portfolio aspects during WWI and WWII, that would be helpful as well. If you just happen to have data showing how these portfolios would have performed during major wars, well that would be beyond fantastic; but I'm not holding my breath, LOL! Thank you for all you do, you and the institute are such a blessing!
I know this could sound strange but the work of a buy and holder is to ignore all of those considerations. Actually, I sat down and made a list of over 200 reasons the market could fail. There is always bad news and good news. If we focus on the bad news it makes it very hard to be a buy and holder.
Communist revolutions and losing major wars destroys stocks and bonds in those countries.
USA is the safest market.
My 401k's small cap value fund is actively managed and has an expense ratio of 0.81%; is that too high to get the benefits of investing in it? The passively managed index funds are all about 0.05%. Thanks!
🤘🏻
Didn't the S&P 500 lose value for 10 years in a row? It was called 'the lost decade'.?
It did lose money for the 10 years ending 2009 (-.9%) but not all years were losing years. But there were 4 very tough years. In fact 2000-2002 were all losing years. What many forget is the previous 25 years (1975-1999) the compound rate of return of the S&P was over 17%.
@@PaulMerrimanSoundInvesting Thanks for those details👍
Flat over that period. But if you dca’d in over that period, you made around 11%.
I invest every two weeks.
1/2 S&P 500 index fund and 1/2 Small Cap Value index fund. Buy and hold. I never sell and don't time the market. I am 100% equity. Zero debt. 300k income. 1.6million net worth. (1/2 real estate the rest as described above).
Bravo!!! Since I am 80 I know I will not likely be around to see the outcome of your commitment. I know our family has set up our newest grandchild with that same combination of equity asset classes. It won't produce the highest return but I think it will be a great combination for the next 100 years, if we haven't figured out some way to destroy ourselves.
@@PaulMerrimanSoundInvesting thank you. I listen to all your podcasts. Keep up the excellent work. And thank you Sir.