May 8, 2018

Swedroe on Ideas for Goosing Portfolio Efficiency

In this article at Advisor Perspectives (How to Diversify Beyond the 60/40 Portfolio), Larry Swedroe lays out some ideas for enhancing portfolio efficiency beyond 60/40 going into what looks like a challenging return regime.  To quote Larry on the basic end game:
By moving to increase allocations to these alternatives, I believe investors can significantly improve portfolio efficiency, and in particular reduce left-tail risk (critical to those in the withdrawal phase, when sequence risk can matter a great deal) thanks to the benefits of the anticipated premiums from these assets, as well as the diversification benefits provided by their low correlation with traditional stock and bond returns.
A worthy goal so I thought I'd take a look at RH positioning against the "Swedroe 6:"


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