As usual, a wonderful piece of work from the genius Mr, Ben. I was looking for the probably dimensional paper Mr. Ben cites about the minimum r square required to time CAPE, sadly i could not find the same, Kindly request if RR committee can help a little regarding that paper. Thanks for wonderful work Mr. Ben, You are a role model,
Great job. A topic I'd be much interested in is rebalancing. I was discussing with friends on whether rebalancing can be seen as an indirect way to automatically "buy low, sell high", and thus would improve the chances of larger returns, or this is not how it works and it should just be seen as a way to preserve the level of risk that we choose. It would be great if you'll have an episode on this topic, or maybe it has already happened and I missed it ?
Rebalancing does unintentionally work in the manner you desire, however historically you are almost always better off assuming the risk of the entire market for your entire investment horizon, because stocks tend to go upwards which means you are either 1) rebalancing away from stocks that are going up to buy bonds, decreasing expected returns, or 2) letting your bond allocation drop compared to your stock allocation. When the eventual drop does come, if you rebalance by selling bonds to buy equities to maintain your desired risk profile, you are as you said just preserving the level of risk you choose. If you sold all bonds at the drop (and even if you had perfect market timing) depending on how long it took for the drop, you might come out behind or ahead, but historically the odds are not in your favor (again, because of the upward trend of stocks). TLDR Rebalancing might give a person with market timing inclinations the illusion that they are poised to capitalize on a drop, but you're historically still better off being 100% equities.
It's interesting to me that Ben puts mental health effects of pet ownership in the liability column and not the asset side. As a dog owner for most of my life I would tend to view it as an asset. Even watching my young niece and nephew endure the passing of their family dog I still think of it as a net positive, given that it will have prepared them for greater experiences of grief that are inevitable in life. Not a parent myself, though, so I still appreciate Ben's perspective.
Could you make a video dedicated to emerging markets
As usual, a wonderful piece of work from the genius Mr, Ben.
I was looking for the probably dimensional paper Mr. Ben cites about the minimum r square required to time CAPE,
sadly i could not find the same, Kindly request if RR committee can help a little regarding that paper.
Thanks for wonderful work Mr. Ben,
You are a role model,
Would love it if the episodes had sections so I know when the meat of the episode starts. Love the vids!
Great job.
A topic I'd be much interested in is rebalancing. I was discussing with friends on whether rebalancing can be seen as an indirect way to automatically "buy low, sell high", and thus would improve the chances of larger returns, or this is not how it works and it should just be seen as a way to preserve the level of risk that we choose.
It would be great if you'll have an episode on this topic, or maybe it has already happened and I missed it ?
Rebalancing does unintentionally work in the manner you desire, however historically you are almost always better off assuming the risk of the entire market for your entire investment horizon, because stocks tend to go upwards which means you are either 1) rebalancing away from stocks that are going up to buy bonds, decreasing expected returns, or 2) letting your bond allocation drop compared to your stock allocation. When the eventual drop does come, if you rebalance by selling bonds to buy equities to maintain your desired risk profile, you are as you said just preserving the level of risk you choose. If you sold all bonds at the drop (and even if you had perfect market timing) depending on how long it took for the drop, you might come out behind or ahead, but historically the odds are not in your favor (again, because of the upward trend of stocks).
TLDR Rebalancing might give a person with market timing inclinations the illusion that they are poised to capitalize on a drop, but you're historically still better off being 100% equities.
Look up the video on Ben Felix's channel "Does Market Timing Ever Work?" and "The Art of Profitable Rebalancing" from PWL Capital
14:02 title topic begins
So to conclude: What % expected returns should I calculate with when holding a global market cap weighted index portfolio?
PWL Capital (where Ben works) routinely update their forecasts. Currently, I believe it’s around 6.5% for stocks.
It's interesting to me that Ben puts mental health effects of pet ownership in the liability column and not the asset side. As a dog owner for most of my life I would tend to view it as an asset. Even watching my young niece and nephew endure the passing of their family dog I still think of it as a net positive, given that it will have prepared them for greater experiences of grief that are inevitable in life. Not a parent myself, though, so I still appreciate Ben's perspective.
I wish we could look at the long term performance with any of the FF factors tilts within the DSM dataset
Yaye, my favorite Canadians!!!!
Very cool!
Excellent work
I would pick a horse. Expenses can get up to 1000 dollars per month. My girlfriend really wants one, but I think it's a very expensive hobby.
Hallo AleksNL. I know you're watching this.
Lol great title