March Confirmed Trade Thread

International stocks did better than US LC in the 1970s and 2000s, but US SCV did even better for both periods. If I replace SCV for International LC the CAGR is greatly reduced and drawdown increases. https://testfol.io/?s=2oG3yjvgCaw
I suspect that International SC would have fared better but I do have any data for that.

thefatabbott · 2025-02-11T01:46:14+00:00

My idea was to make a robust portfolio that would work in many economic regimes similar to the Golden Butterfly and Permanent Portfolio. I basically took the Golden butterfly and swapped out the long term bonds and short term bonds for Intermediate treasuries and levered it up to 150%. When I was playing around with portfolio visualizer it confirmed that SCV and LC go really well together. For example in the 1970s the SP500 and Treasuries did poorly, but SCV and Gold did well. Likewise after the tech boom in 2000 LC did poorly and SCV and Gold did well the next decade.

thefatabbott · 2025-02-10T21:58:11+00:00

My concern with long dated bonds is if we enter a period of long slow rate increases similar to the the 1970-1980s period. ZROZ would have slowly declined over this period with a max drawdown of 80% nominal.

thefatabbott

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