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Josh Brown & Michael Batnick: The Two-Fund Portfolio: Video Presentation

TedTed
in Fund Discussions
FYI: Michael Batnick and Downtown Josh Brown are Live From The Compound to talk about a really simple way to figure out the optimal mix between stocks and bonds for individual investors – this is something everyone can do for themselves as a device to determine how much risk you can really stand.

By examining the drawdown vs returns history of a two-index portfolio, and looking at ten different incarnations of it, you can get an idea of how much downside IN DOLLAR TERMS you’d be able to live with during a worst case scenario market event.
Regards,
Ted
https://thereformedbroker.com/2019/02/22/the-two-fund-portfolio/

Comments

  • InvestorInvestor
    Yes this is a simple portfolio but Maximum drawdown should give an investor an idea of how much they can stand to lose. A lot of people have much less loss tolerance than they imagine probably because they have no idea what to expect. They are surprised and they quit the market losing the recovery.

    After 2008 crash which was pretty bad, a 40 stock/60% short term bond portfolio recovered in about 2 years (assuming re-balancing). But that portfolio has a maximum draw down around 20-25%.
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