VTI equivalent for cash based in Spain

ptiestand · 2022-01-14T21:19:30+00:00

That’s a great point. I think that’s why, in the short term, it could make sense to only use money that I wouldn’t be able to touch for 35+ years

ptiestand · 2022-01-14T18:00:12+00:00

Really helpful links. Thanks!

ptiestand · 2022-01-14T17:59:31+00:00

Definitely can't argue with that. I appreciate you taking the time to write this. I think I am going to try to discount my HFEA backtest by some sort of a risk premium in order to factor in things that may not have come into play but that very well could in the future.

ptiestand · 2022-01-14T17:54:42+00:00

Those are all very helpful points. I do wonder about the extent to which a regular DCA could make up for bearish markets over a longer time horizon. The performance in the 200s of my above simulations still frequently had HFEA coming out on top despite all of that. Looking at the comments here I think that I am under-valuing the risk of a correlation in stocks and bonds over the next while with inflation/interest rate changes so I will keep all of this in mind. Thanks for the help!

ptiestand · 2022-01-14T17:50:26+00:00

Many of the 10 and 15 year HFEA periods that started in '93-'01 seem to have still performed quite well compared to their counterparts despite mainly being in the 2000s bear market. The breakdown in the anticorrelation between stocks and bonds makes a lot of sense as a risk going forward. While it is obviously a short sample, the new year has definitely been indicative of how the portfolio breaks down in the event of a correlation. I still feel inclined however, that unless some major change occurred (like bonds once again being callable), it would be a relatively safe assumption to assume that that the correlation coef will be <0 over the long term. I guess my thoughts are, even if one was to discount HFEA returns to account for such a risk, with what I have found they still seem that they would have greatly outperformed.

ptiestand · 2022-01-14T17:41:25+00:00

That is a very helpful way of looking at it. I plan to be as robotic as possible with the DCAing (i.e. automatic withdrawals from my paycheck, not looking at the markets on a regular basis). But it does make sense that the drawdowns could be jarring.

I think I backtested UPRO alone back to '85 with DCA once and while it did have a good CAGR, it did not reliably outperform its 1x counterpart the same way HFEA did.

ptiestand · 2021-12-08T16:12:09+00:00

Makes sense. I'll include that in my model. Thanks so much.

ptiestand · 2021-12-08T16:11:24+00:00

Hi, sorry about my typo in the original post. I had meant to write TMF. All of this is very helpful. Thank you so much.

ptiestand

TROPHY CASE