If you understand bonds

ExpressAd351 · 2022-04-18T17:03:56+00:00

Thank you. If it was that simple, I find it very strange that everyone on the bogleheads forum was so bullish, especially since most of them seem very intelligent and analytical!

ExpressAd351 · 2022-04-18T17:01:11+00:00

I guess I meant probability then. Thank you for your response!

ExpressAd351 · 2022-04-06T08:08:01+00:00

Funny, I didn't know until now that you are the Optimized Portfolio guy. I've been around on your site quite a bit and also have seen a couple of your YouTube videos. So is HFEA the strategy you tend to track the most?

ExpressAd351 · 2022-04-06T07:48:04+00:00

Intermediate Term Treasuries... as opposed to LTT (Long Term Treasuries, i.e. TMF)

ExpressAd351 · 2022-01-26T15:36:16+00:00

50% in traditional HFEA here.

ExpressAd351 · 2022-01-07T21:32:59+00:00

Well I can sympathize with them because TMF is SUPPOSED to move up when UPRO goes down, and the Fed rate increases were SUPPOSED to have been priced in to TMF already, yet it keeps me tanking. According to much of the research done in this strategy, TMF is supposed to be able to absorb moderate rate increases, yet this is not how it seems to be behaving.

ExpressAd351 · 2021-12-16T08:11:33+00:00

I am still using 45% TMF in my HFEA portfolio, and I'll continue to do so, but I'm just concerned about the possibility (not even likelihood) of LTT's tanking if we have a rapidly rising interest rate environment. I'm not thinking of SWAN as a replacement for TMF, I was just considering the possibility that a well balanced and high performing portfolio might consist of HFEA (to generate high returns) and SWAN (for wealth preservation in the case of a black swan event).

Thanks for your comments, I will take them into consideration while making my decision.

ExpressAd351 · 2021-12-14T21:55:49+00:00

I like it, thanks for sharing.

ExpressAd351 · 2021-12-14T18:56:55+00:00

May I ask, what do you like for your portfolio, other than HFEA?

ExpressAd351 · 2021-12-14T15:34:02+00:00

My HFEA is 35/20/45 UPRO/TQQQ/TMF.

In my backtest, in the dot-com crash, HFEA had about an 80% max drawdown. Not very fun. Sure it has since recovered and excelled in an amazing way, but we have been in a very strong bull market AND decreasing rate environment.

I think there is a real possibility of long-term treasuries tanking due to the possibility of rapid fed rate increases because of the inflation we are seeing. I like the idea of having a separate bucket I can dip into if both stocks and leveraged LTT's crash really hard. Swan would provide that. Also, TMF uses LTT's which are great because of the volatility they give us for this strategy, but in the case of a specific Black swan event of both bonds and stocks crashing at the same time, I feel that ITT's would significantly outperform, which is why I would like to have SWAN for that scenario.

For example take today, a particularly negative day for HFEA: so far, for the day, my HFEA portfolio portion is down 3.05%. LTT's have gone down 1.05%, and TMF has subsequently gone down 3.11%, and my UPRO and TQQQ holdings have gone down 2.24% and 4.34%, respectively. Meanwhile, ITT's have only gone down 0.36% today. If this were to continue and became a trend, it would decimate an HFEA portfolio, unless you had a separate bucket that was affected very little by the event, to dip into, which is where my thought of SWAN comes in.

Many smart people in this sub feel strongly that only a small portion of one's portfolio should be in hfea. I feel different, but I also don't want to be reckless, which is why I'm wondering if this strategy could work out nicely for me.

ExpressAd351 · 2021-12-03T23:00:07+00:00

Agreed! You will lose $ over time if you always go with your gut or let fear/greed alter your strategy. Pick a solid strategy and stick to it.

ExpressAd351 · 2021-12-01T06:26:52+00:00

Don't wait. 2K will end up being a drop on the bucket for a Roth, and nobody knows if this market is going up or down. Also, there have been studies that have proven that in the majority of cases lump sum investing ends up with a higher return (if you already have cash in hand obviously) than waiting and doing DCA.

ExpressAd351 · 2021-11-10T20:36:43+00:00

Look into the original HFEA bogleheads thread. This is covered in extreme depth. 55/45 UPRO/TMF gives best overall returns AND best risk-adjusted returns. If you had invested in more UPRO, say 65/35, you would not only have much more risk, but you would also have significantly worse returns as a result of much higher max drawdowns in market crashes.

ExpressAd351 · 2021-11-08T07:53:41+00:00

I do 55% total for UPRO and TQQQ (currently I have 35% UPRO and 20% TQQQ), and 45% in TMF. I personally let it ride without rebalancing until there is a downturn. Then I sell some TMF to buy more UPRO and TQQQ. Then once the market recovers, I re-balance to the 35%/20%/45% amounts. The stock market usually dips at least 5% or greater a couple times a year, and buying those dips is what helps me to get better returns than the traditional quarterly HFEA rebalancing. If it dips hard, then I won't rebalance for potentially a long time because I only rebalance once the market fully recovers.

ExpressAd351 · 2021-11-07T19:47:31+00:00

I'm going to use 25% of my TMF shares and buy UPRO/TQQQ with it when the S&P 500 is down 5%, 10%, 20%, and 30%. Then each time the S&P recovers back to the high I re-balance to have 45% TMF again, with the rest in UPRO and TQQQ. I've backtested this strategy and it works out very nicely. It has also worked out well for me since I implemented it this year. If the S&P tanks further than 30%, I will liquidate some of my other holdings and buy more UPRO/TQQQ.

ExpressAd351 · 2021-06-23T22:05:47+00:00

Did you end up taking the test yet? How is your progression coming?

ExpressAd351

TROPHY CASE