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FYI: I consider myself a relatively sophisticated investor who does his research and makes informed investment decisions. But I recently discovered that, without knowing it, I’ve gotten caught up in the so-called smart beta investment craze. Smart-beta funds are marketed and sold to investors based on the notion that they can provide higher risk-adjusted returns by weighting assets according to certain alternative factors or strategies, such as size, value, volatility, momentum or dividend screening. Regards, Ted http://blogs.wsj.com/experts/2016/02/09/how-i-blew-it-with-a-smart-beta-fund/tab/print/
Fascinating. I just graphed slightly less than 10y performance for SP500, VTI (oddly identical), vs RSP (SP500 equal-weight) and VIG (div), which both outperformed SP500 and VTI, not hugely, by <5% and >3%.
VIG had the least dip 08-09, RSP the worst.
Very different story the last 1y and 3y (and not the same story).
Fwiw.
Happy thus far w smart beta DSENX, CAPE plus secret bond sauce. (CAPE not mentioned in the Glushkov article.) Sure hope it continues.
As the finance industry is incentivized to sell "product and charge fees, there is a dearth of incentive and funding for quantitative research. Even something as simple as the moving average strategy would slip through the "echelons".
Comments
VIG had the least dip 08-09, RSP the worst.
Very different story the last 1y and 3y (and not the same story).
Fwiw.
Happy thus far w smart beta DSENX, CAPE plus secret bond sauce. (CAPE not mentioned in the Glushkov article.) Sure hope it continues.
https://docs.google.com/document/d/1XwZjcWy7KlSwA7xi0rax7nevIBCtW0Uu4UZFH-Hc1ns/edit?usp=sharing
And if that's too complicated, then try a 60 / 40 balanced portfolio of vanguard specialized Health and Vanguard long bond https://portfoliovisualizer.com/backtest-portfolio?s=y&allocation1_1=60&showYield=false&endDate=02%2F28%2F2016&allocation2_1=40&startYear=1985&lastMonth=12&symbol1=VGHCX&endYear=2016&frequency=4&symbol2=VUSTX&s=y&inflationAdjusted=true&annualOperation=0&rebalanceType=1&initialAmount=10000&timePeriod=4&firstMonth=1&annualAdjustment=0&reinvestDividends=true&annualPercentage=0.0
As the finance industry is incentivized to sell "product and charge fees, there is a dearth of incentive and funding for quantitative research. Even something as simple as the moving average strategy would slip through the "echelons".