Vanguard REIT Index VIPERs (VNQ)
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VNQ Forum Topics
- All Comments on VNQ
- General Discussion on VNQ
- El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
- Real Estate, Retail ETFs Better Than You Think [view article]
- Global Investing: Get Past the Noise [view article]
- A Lazy ETF Portfolio Underweighting the U.S. [view article]
- Real Estate [REIT] ETFs [view article]
- Harvard Endowment 2008 Performance [view article]
- A Simple Momentum System for Beating the Market [view article]
- REITs Pop While Commodities Flop [view article]
- A 360 View of Returns (July 2008) [view article]
- Quant Approach to TAA: Equity-Like Returns with Bond-Like Volatility [view article]
- Managing Portfolio Allocations With ETFs [view article]
- Asset Class Performance in 2008 [view article]
loading ...Recent VNQ Articles
- Real Estate, Retail ETFs Better Than You Think
- Global Investing: Get Past the Noise
- A Lazy ETF Portfolio Underweighting the U.S.
- Harvard Endowment 2008 Performance
- A Simple Momentum System for Beating the Market
- REITs Pop While Commodities Flop
- A 360 View of Returns (July 2008)
- Eight US Real Estate ETFs
- Managing Portfolio Allocations With ETFs
- Asset Class Performance in 2008
- Full List of Articles »
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El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
In reviewing your asset allocation, it appears that you have 63% of your portfolio in bonds? Seems high to me. Would you mind sharing with me why? Thanks.On Jun 10 08:19 AM rudi wrote:
> I'd find it interesting to know, how these portfolios are being created.
> As I am involved into asset allocation a lot, I wonder why there
> is so little allocation into bonds. I think the difficulty is, what
> expected returns to assume, when optimizing the portfolio by the
> best sharpe ratio (or some other ratio). As you can see, all portfolios
> assume >10% commodities to be appropriate. I find results like that,
> when I imply the empirical returns of commodities for the last years.
> Minding the efficient market hypothesis, there is no reason to assume
> more than the inflation rate plus some increased demand due to worlds
> economic growth, as an expected return. This would be 3-4% in my
> opinion. This leads me to a portfolio with maximum 5% commodities.
>
>
> I conclude the harvard portfolio to be defenitely the best, since
> they are best diversivied, i.e. they have the most asset classes.
> High yield bonds and inflation-linked bonds should be included in
> every good portfolio.
> In spite of that, the harvard portfolio could be easily outperformed
> (risk adjusted) by a portfolio like that:
>
> -International Stocks (weighted by marketcap) 20% (ACWI)
> -International inflation-linked-bonds 30% (TIP)
> -High yield bonds 3% (HYG)
> -Bonds with short avg. maturity 18% (SHY)
> -International Bonds 12% (BWX)
> -Commodities 5% (DBC)
> -Real Estate 7% (VNQ)
> -Private Equity 5% (PPE?)
>
> Keep in mind, that private equity is correlated with stocks. So there
> is a lot of emphasis on stocks market in all mentioned portfolios.
>
>
> The idea of having hedge funds is in my opinion misleading as well,
> since they are either doing some similar allocation, or they apply
> some strategy, which includes short selling (not sticking to efficient
> market hypothesis), what means, you are long and short in the same
> assets at the same time, just wasting fees.
>
> By the way, there are even more asset classes, that should be added
> to the portfolio, but I wanted to show a portfolio, which doesnt't
> include more than the harvard one and is already more developed.
>
>
> best regards
> rudi Reply
Real Estate, Retail ETFs Better Than You Think [view article]
Ops... shouldn't that be oops? Just asking. After all, you have an extremely weak understanding of math. Perhaps your lack of knowledge extends to grammar as well.A few hedge funds, a number of large instituitonal money as well as savvy managers control the bulk of actual dollars being invested. They may number in the thousands. Moreover, they represent the reason for the rise in early business cycle leaders like real estate/retail.
Meanwhile, there are hundreds of thousands, if not millions, of small investors who chase performance. The latter group are usually behind the curve. They represent the majority of investors... and they haven't wanted to go near consumer discretionary or real estate stocks.
Hope that explains it for you, Ops. Reply
Real Estate, Retail ETFs Better Than You Think [view article]
I think it is due to the large dividend payouts from REITs. But who knows if those can continue?? ReplyHazards Amok
Real Estate, Retail ETFs Better Than You Think [view article]
Pull XHB up on a 3 year chart. It appears that this year’s gain is probably only yet another bear market rally inside of a much stronger long-term trend down. The unwinding of the great credit supercycle marches on, imho.(I’m trying really hard to avoid mentioning the falling knife cliché.) Reply
Real Estate, Retail ETFs Better Than You Think [view article]
This two groups, along with telecom have a certain "so bad, they're good" value category, they've been beaten up either on a perception basis or a true sell off, the author is on to something here. Replyagain
Real Estate, Retail ETFs Better Than You Think [view article]
Let's face it, most investors have not wanted to touch real estate or the consumer with a twenty-foot pole...Then why did they go up? magic? Reply
Global Investing: Get Past the Noise [view article]
Stocks like WMT, IBM and Intel have more cash flow from overseas, actually 50% of the earnings in S&P500 are from oversea sellings. With cash flow in a basket of currencies and the stock denominated in the $, a strengthening US$ will be negative to the value of US stocks. Every analysts who use DDM or DCF to value stocks know this. ReplyGlobal Investing: Get Past the Noise [view article]
Strengthening US Dollar is making US assets appear better .. to say the least .. ReplyGlobal Investing: Get Past the Noise [view article]
As the USD goes, so inversely go the international fund returns. Replysula
A Lazy ETF Portfolio Underweighting the U.S. [view article]
I agree with adding PCY, some FRN, PSP, and PFP. One can make a case for GLD as a subset of the commodities allocation, since gold is not only a commodity. Also, there's evidence that annual rebalancing is far more effective than monthly rebalancing (check out PIMCO website for article making case for commodities in portfolios to reduce overall portfolio risk - apparently monthly rebalancing greatly diminishes the effectiveness of this allocation strategy). I rebalance bi-annually, with good results. ReplyReal Estate [REIT] ETFs [view article]
Should you add Cohen & Steers Global Realty Majors ETF (GRI) to the section entitled Broad International REIT Index ETFs? Also, it might help to have the date of the last update in the various sections of the ETF Selector so we know how current it is and don't make the mistake of assuming the lists are full representations of what's available. Reply
A Lazy ETF Portfolio Underweighting the U.S. [view article]
What about using something like DBV for your cash? I would use PSP & PFP for Private Equity or individual stocks. A small amount in PCY for EM Int'l Bonds. I really like El-Erian after reading his book and I'm curious to see how this portfolio holds up. ReplyHarvard Endowment 2008 Performance [view article]
"Estimates for the returns for the fiscal year . . . pretty impressive . . . " I am not as impressed as you, apparently. One could argue that the returns on commodities were atypical and saved your bacon. I.e., they constituted a bubble, which has now burst. There is no guarantee that such returns, or any denominated return, of course, will re-occur in the future. ReplyA Lazy ETF Portfolio Underweighting the U.S. [view article]
You can do a lot worse than following a brilliant mind like el-Erian's. I decided to make a similar examination, comparing also the Harvard 07 and Yale Models. Although your case el-Erian investment-substitutes may be correct, I used:El-E 08 Symbol
15.0% VTI
15.0% VEU
12.0% VWO
9.0% BWX
5.0% BND
5.0% TIP
11.0% VNQ
11.0% DBC
7.0% PSP
10.0% CASH
100.0%
I was happy to see that my own portfolio strategy & investment selections vastly outperformed this ETF Model, but I wouldnt presume that the El-Erian's managers deliver the same performance.
Good luck with this!
Reply
A Lazy ETF Portfolio Underweighting the U.S. [view article]
Good start and good choice. I will be following the progress. Reply