Best Stock Market Portfolio? - Golden Butterfly Portfolio vs Pinwheel Portfolio
Вставка
- Опубліковано 20 тра 2024
- If you want to find out which is the best stock market portfolio then you will need to be able to compare them. In this video, I compare the golden butterfly portfolio with the pinwheel portfolio to work out which has historically been the best stock market portfolio in terms of risk, return and safe drawdown rates.
Sign up to our free weekly market roundup to get news and views about what's going on in the stock market and wider economy pensioncraft.com/market-roundup/
If you're interested in learning more about investing then why not become a PensionCraft member? Pensioncraft.com members can enjoy lots of benefits, so to find out more about these and how to join our friendly community please click here www.pensioncraft.com/investor...
This is what else PensionCraft Offers:
- Book a Power Hour with Ramin so he can answer your questions in a one-to-one coaching session via a video call: pensioncraft.com/register/pow...
- Understand investment in more depth with my online courses pensioncraft.com/courses-we-o...
Recommended PensionCraft UA-cam Playlists
- There are many different types of investment strategies. In this playlist we look at a number of these so that you decide what is right for you. • Investment Strategies
- Bewildered by investment? Start with this playlist • Investing for Beginners
- Building blocks for your portfolio • Portfolio Building Blocks
If you like our content and want us to continue to produce it, you can support us with a one-off payment here paypal.me/pensioncraft
#StockPortfolio #Investing #PensionCraft
If you're interested in learning more about investing then why not become a PensionCraft member? Pensioncraft.com members can enjoy lots of benefits, so to find out more about these and how to join our friendly community please click here www.pensioncraft.com/investor-education/membership/
The effort you put into your explainers is astonishing, I’m sure it takes ages to do and it’s very much appreciated
Hi Andrew Andrew they do take a while 8-) thanks for your comment. Ramin.
Fantastic video. Thankyou so much for making it.
Stumbled upon the Portfolio Charts site myself a couple of days back. It's a great tool for portfolio building I thought. But with your clear explanation it is so much more understandable. Thank you and keep up the good work.
Thanks for sharing!
Good stuff Ramin. But I think SWRs should be taken with a huge grain of salt. Always use a lower number than the models suggest. Note GButterfly max drawdown now at 17.8% and 30yr SWR models show 4.7%
just came across your video a few minutes ago - excellent!!! - thank you
Thank you Ray OK I’m pleased you liked it. Ramin
Ramon, as your videos go out in :- India, Nigeria, Brasil, and many other developing nations, then you truly have the revolutionise large number of peoples lives. Brilliant. These videos could reach millions of peoples in developing/emerging nations.
One of the best financial channels.
really very well done. thank you for the effort and the sharing. we are a few years from retirement and are starting to think more about capital preservation while still finding areas of growth thus my interest in the golden butterfly portfolio. BIG thumbs up.
@
The analysis on @t shows that the GB beats all others from every aspect. Ramin should give Tyler a Shout-out since Tyler's an Engineer and not a Fund Manager (plus his content is free!).
Brilliant explanation and illustrations as always.
Excellent, as always! Thank you Ramin.
Thanks for listening
Can you do the same analysis on the all weather portfolio please
Tyler may have created one of the best retirement portfolios ever
Such a great video. One of your best Ramin! The little video screen jumping around the graphs made me laugh at first (in a good way), but also felt that it kept me engaged. I think this video adds some much needed information to portfolio charts which is an excellent resource but watching this i have realised i wasn't using it to its full advantage. I have also reviewed both of these portfolios previous and indeed use the pinwheel as a guide. I'm just not a fan of the bonds as much as i used to hence i haven't gone for the golden butterfly but hopefully in the future with better yields and lower soverign debt levels i will go back to this. Great work. Thank you.
Hi sy thanks, I thought that the video screen might be useful for focussing on the important bits of the graphs, as there were lots of graphs even for me! Thanks, Ramin.
Hi Ramin, thank you for all these interesting content, keep up the good work!
Just some food for thought, a drawback from increasing the asset types in a portfolio from e.g. 2 (2-fund portfolio) to 5 (butterfly) to 8 (pinwheel) is the possible issue from a fixed transaction cost per assed.
If I make bi-monthly purchases in a portfolio and my broker charges 7.5€ or 0.1% (whichever is higher) per transaction, the 7.5€ cost eats away the potentially small upside of the butterfly or pinwheel compared to the 2 fund portfolio. Especially if the bi-monthly purchases are “small”. The same is applicable when you rebalance a more complex portfolio where the assets have a fixed transaction cost to get in/out
By coincidence I used this site again last week. I began by using xray in Morningstar to determine my country and sector percentage. The closest matching portfolio was the Merriman. If I wanted to construct say the golden butterfly or another this would require a considerable transfer or reorganization of assets. Despite that its a great resource for SWR guidance. Thanks for the presentation.
Wow! Probably one of my favorite videos you ever made and they are all great. Thank you! I cant join you on patreon but I enjoy them so mych that I watch each video of yours multiple times.
Using Portfolio Charts, I was able to modify the Golden Butterfly into something that beats it in half the categories, including significantly better average returns and better withdrawal rates. It also beats the Pinwheel in every category. It is:
20% Total Stock Market
20% Small Cap Blend
20% REITs
20% Short Term Treasuries
20% Gold
Now is a great time to diversify into less risky or varied beta asset classes.
Amazing content! Thank you.
Glad you enjoyed it!
Nice video, Ramin. What are International Stocks? Isn't this just global market?
Thank you so much for all the well presented and explained information
You are so welcome @Sherif Hesham
Hi Ramin. Your content is always well thought out and of a very high standard IMHO. However you have really raised the bar with this one, it is excellent and contains invaluable information. Thank you!
Really like the Golden Butterfly portfolio (Disclosure: I really like Gold at this point in any portfolio 🙂) It's just all those bonds!! I guess that's where the ying and yang comes from.....
As a longterm follower of Tyler's I rewatched your GB Portfolio video again today. Nice explanation of the visuals on his site.
Thanks @mikehardwicke23, I love PortfolioCharts!
Great video with great insights as usual.
Much appreciated!
@@Pensioncraft just joined the patreon community :-) I am excited
Hi @@MentzeA that's great thank you! I'll see you on Slack shortly. Thanks, Ramin.
Statistics basics very well explained! 👍
..and super Website!
Glad you liked it! @michaelb7829
what’s shares should somine add in uk for this portfolio?
Great info, thank you!
My pleasure!
By some stocks in future-based S&P 500 companies, holding for long term. Ramon Great Videos.
Thanks Ramin! Extremely clear and detailed as always
My pleasure multiforme I am glad you enjoyed it.
Great video once again Thank you!!
Those lost decades back in the mid 70's where probably due to the huge interest rates they had around 13%. In today's market at 0 rates we should be going higher from here.
Excellent and clear explanation and analysis as ever Ramin.
Thank you
How about a modified perpetual withdrawal rate which, when applied to the Golden Butterfly, results in a significant portfolio growth, and not just retaining the initial capital? Would it look something like 3.5%?
I use intrinsic value calc for full yr and trailing twelve months use 10 yr Gov Bond rate and they are often way different and way different from current prices up and dwn and I use a discounted value calc and that is hilarious most of the time best way I have is average the last 3 analyst prices on Fiviz just click a stock estimates are below.
Just seems to work pretty well I think most people in USA look at them not Calculations far to intelligent for a start and time consuming.
Good to know SnP is still expected to recover more.
2008 crash recovery pattern has one more push Algos collecting liquidity at the mo imho.
Good to see Gold get a bit more prominence
Q. What is the best accepted Actuarial wisdom in 2020 going forwards ??? @PensionCraft
Fantastic data and information. Thank you, Ramin, for taking the time to do this. I wonder how much the current environment impacts the results. For example, gold now is at an all-time high and makes up 20% of the golden butterfly portfolio, valuation is supposed to be an indicator of future returns. Any thoughts on this?
I'll definitely be checking that website out thanks!
Interesting content as always!
I may have missed the point and these are in fact 'timeless'/all weather portfolios but I wonder whether it is efficient to follow the strategy of these portfolios in retirement also. It is an alien concept to me to have your portfolio carrying the same risk as when you were investing in your 20s as it would be in retirement.
Hi Douglas that's what the sustainable withdrawal rate tells you - for each portfolio in retirement how much can you withdraw each year without outliving your money? Thanks, Ramin.
Doug: My sense is the Golden Butterfly portfolio is actually lower-risk than a typical accumulation-phase portfolio (heavy in domestic equities). It seems constructed specifically to mitigate the various forms of market risk, and might be very appropriate in retirement? I'm wrestling with it as well, due to some unconventional components, but find its logic and track record compelling. Best, Mike
@@mikestevens2053 I think the only portfolio safer than the Golden Butterfly for retirees would be the Permanent Portfolio, but the GB has dramatically better returns and better safe withdrawal rates.
Q. What portfolio distributions etc do professional pension companies hold ??? @PensionCraft
Great video...
Video on hedged vs non-hedged?
Thank you Chris Jones I am glad you found it helpful
In the past decades modelling we had many years of high interest rates. Don't think that will be case in next 5-10-20 years.
Divided is good way to avoid touching the princable
Wow I’ve been looking for these charts, thanks for sharing!
No problem 😊
Good
Would you make a video for us that would teach us how not to put all of our money in stock and share ISA for life with one company , instead how it will reduce our risk if we use different provider in different tax year so that our money stays protected .. as FSCS only cover up to £85000... and what are the rules by maintaining different stock and share ISA with different provider in different tax year
I'm 100% equities, hedge on margin when backtested circumstances make an appearance
@@BB-kd5sp when price moves below 150dma on my benchmark I hedge full val of portfolio on margin so I am essentially market neutral
A very interesting video, especially the last part. However, in the current near zero interest/lower than inflation rate environment, how long would it take to get to 1mln for a 40% bond portfolio? What I mean is that in my opinion, structuring a portfolio with a multidecade horizon has the risk of making you blind to political uncertainty, particularly if it's not feasible to distribute your exposure across all the globe
That's the problem with back testing, long duration bonds have been amazing since the 70s but for them to have the same performance interest rates would have to hit negative double digits.
i think the problem with all these portfolios is that are biased towards USA golden period. If you take other mature economies like Japan or Eu then none of the portfolios work they give about 2% less withdrawal rate
Really good explanation of SWR.
Glad you think so!
Just remember folks this is all historical. A prolonged 0% or negative intrest rate, Industry disruptions, decreasing equity yields higher historical P/E, covid 19, social, political unrest, war and population decrease will all have effects on any portfolio.
Is the sharpe ratio also computed on daily returns or longer intervals like weeks or months?
Hi ming chen the Sharpe Ratio doesn't have a fixed period, it can be calculated for any period. Usually it's over several months at least. It's the excess return divided by the volatility of the excess return. Typically that will be over a 3 month or longer period. Volatility is best calculated using daily returns, but over a period that is the same as the one used for calculating the return. The sampling frequency for return is irrelevant because all that matters is the final value and initial value over the period. Thanks, Ramin.
When I'm running a returns distribution, I manually enter the intervals. Then I run filters on the % returns with each interval to get the count. It works but is time consuming. Is there a faster way to run a returns distribution on excel?
Thank you for this video. Too bad I only woke up at 45 years old. :-(. I am thinking of a GB porfolio mostly being supported with swing trading of ETFs and occasionally stocks, focused on growth (depending on the market cycle) and a bit of my salary. Since I am single and haven't got high expenses, I plan to step back on the amount of hours I work per week in the following 5 years and hopefully get started on a small investment online business.
Easily watchable on 2x speed.
How can it be that especially 'financial advisors' are still not aware of the disrupting effect of Bitcoin on their future... What must happen to open their eyes.
I do not recommend the Gold part. Ramon's videos are always brilliant. A fine English gentleman's intellect.
I think u deserve a Nobel Peace prize for being so brainy, I got a head ache already.
Look into the future :- Next, 5, 10, 20, 30, years :- ECommerce, Artificial Intelligence, Fintech, 3D Printing, Fourth Industrial Revolution, Biotech, Smart Cities, Genomic Revolution, Cryptocurrency, Blockchain, electric cars, autonomous cars, Green/Renewable energy, Battery tech, Emerging markets, Lithium, etc. BRICs (Brazil, Russia, India, China). These are plenty future sectors to be investing into. Ramon makes GREAT videos. Invest in the future. Dump the past.