Quote:
Originally Posted by noppenbd
Israelson's study:
I looked first at the accumulation portfolios. (See "Accumulation Phase Portfolios," below.) In the aggressive portfolio, adding an alternative asset of any kind produced a higher return than the core [90% stock/10% bonds] portfolio alone. Energy had the greatest impact over this particular 20-year period ($104,786 versus $78,127). But Adding commodities improved the worst one-month percentage loss more than any of the other alternative assets, from -21.3 to -13.6%). Adding a composite mix of energy, real estate and precious metals to the core portfolio reduced the worst one-year calendar loss to -8.8% compared to -16.6% in the core portfolio alone.
Quasi-Commodities? - Articles - Financial Planning |
Not enough data for me.
The study was 20 years 1986-2006. This included the biggest bull market in history and generally the 1990's were one of best decades to invest in any type of equity (energy or other).
I have read other (similar) studies which suggested that during draw down a 7 asset portfolio behaved better than a 6-5-4-3-2 or 1 asset portfolio.
Asset 1 large cap stocks
Asset 2 small cap stocks
Asset 3 foreign stocks
Asset 4 bonds
Asset 5 cash
Asset 6 REITs
Asset 7 commodities
The logic behind the study I refer to was that 7 assets (in equal weightings) kept the portfolio from having 3 year performance periods where the portfolio lost money, which is the single biggest risk when drawing down (drawing down when a portfolio lost money).
This article referred to this
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Retirement portfolios are more fragile accounts since they are sustaining periodic withdrawals. (See "Retirement Drawdown Portfolios," below). The accounts were simulated by depositing $10,000 and then withdrawing $75 each month over the 20-year analysis period.
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