03-04-2021, 09:22 AM
Thanks for the chart and the back tests Mike. I'm inclined to believe data from 2001 to present is most relevant. The money printing started, and rates weren't 12% or 0%. What you posted lends confidence. I am annoyed when anybody offering services for pay offers up a 2011-present chart and implies "you just can't help but get rich".
On another note, the hedge is important. When rates were higher an investment grade LT bond might rise 10% while your stocks are dropping 15%. I'm less confident this works quite as well. Honestly, it just needs to be somewhat effective. It's not reasonable to expect short term guarantees in an investment vehicle proven capable of 12%+ returns. I'm sure you realize it's the extended black swan I am wary of. Nothing is guaranteed but I want the chance of that to be very low. And I don't want to be babysitting it waiting for a trigger that might happen today or two weeks for now. What is really causing this is I've lost confidence in buy and hold forever unless valuations are much lower than they are currently. I'm not putting all my eggs in that basket this close to retirement. Especially when it almost requires me to hold 30 stocks when I rarely have more than 10 good ideas.
On another note, the hedge is important. When rates were higher an investment grade LT bond might rise 10% while your stocks are dropping 15%. I'm less confident this works quite as well. Honestly, it just needs to be somewhat effective. It's not reasonable to expect short term guarantees in an investment vehicle proven capable of 12%+ returns. I'm sure you realize it's the extended black swan I am wary of. Nothing is guaranteed but I want the chance of that to be very low. And I don't want to be babysitting it waiting for a trigger that might happen today or two weeks for now. What is really causing this is I've lost confidence in buy and hold forever unless valuations are much lower than they are currently. I'm not putting all my eggs in that basket this close to retirement. Especially when it almost requires me to hold 30 stocks when I rarely have more than 10 good ideas.