The Most Controversial Paper in Finance

all countries are not the same and not interchangeable. The US capital system and freedoms drive better results than say North Korea or China or, perhaps, even Japan. This nonequality seems to be an Achilles heel of the paper to me.

I've always wondered why 100% equities wasn't popular or recommended. Recently (before watching this) decided to go 100% anyway. In it for the long haul.

idk it must be me with all this praise here . .but this video is unwatchable with the guy just reading from a teleprompter or something at breakneck speeds but looks like everyone wants to act like they understood it because he preempts it by calling it nerdy which means admitting you did not get anything would make one look stupid?

The first mistake of the data source is the "historical data for 39 developed countries"… imho. It should ONLY use US-based data, period. We already know that "globally diversified portfolios" have massively underperformed throughout any 25-yr stretch. Save yourself a ton of time and heartache, no need to get cute, simply start dumping into a low cost S&P ETF when young (after paying off recurring debt), then slowly start reinvesting the divvies and CG's into income-generators as retirement (or early retirement) nears. Done. You're welcome.

I am always 100% equity. Now I am 40% large US 20% small US and 40% international.

I would think they would instead simulate the life cycle of a variety of people at different wealth levels and with different savings and consumption patterns. And background risks that change over time. In my opinion, those things are what is relevant to the decision of whether to change your allocation over time. If everyone's risk aversion, wealth, and background risk changed the same way as they aged , and if everyone had similar retirement/legacy goals, I'd be a lot more sympathetic to lifecyle investment advice.

Simple argument: Returns on debts and equities are both driven by supply and demand forces. Returns on debts are inherently more reliable and predictable. Therefore if expected returns on debts were not meaningfully lower than those on equities, investors would always prefer to buy debts. That would push up the price of debts, lowering expected returns until they are meaningfully less than equities. Due to the power of compounding, even small differences in rate of return inevitably lead to overwhelming differences when extrapolated for long enough.

Bonds: a portfolio of bonds has a return based on interest earned and principal value. Bond portfolios go up and down in price influencing portfolio value. But if you always hold individual bonds and to hold them to maturity (or almost always) doesn’t this lead to a different calculated return?

'Preserving the opportunity for those who can handle it' – what a great quote to say if you have balls you can gain

Could someone explain what he meant about the domestic income around 17:00? Are they talking about if your income goes down when the domestic stock market goes down?

Bonds are for boomers

“My advice to the trustee could not be more simple: Put 10% of the cash in short‑term government bonds and 90% in a very low‑cost S&P 500 index fund…”

—Warren Buffet

Im 100% stocks with a big chunk of cash on another, non trading, bank account. The cash is to sleep well. So far it worked.

Guys, I need an executive summary.

Interesting topic and nice intro but it's hard to follow sp many math and finance concepts verbally, without making it in more accessible or including visual representations. It shouldn't feel like reading a chat gpt summary

I was 95% in equities until four years before retirement, when I was making $300,000+ per year and investing $100,000. My thought was I could take the hit if a drop happened. Now five years later I have a classic 60/40 portfolio.

Should I have risked off a bit earlier? Maybe. But the outcome would have probably been about the same.

This has been my plan pretty much since I started investing for retirement. The only changes I will really make are to move more into dividend stocks once I need to rely on it for income and try not to touch the principal.

Don't you need some bonds or cash in order to employ Shannon's demon?

If life bytes you (as in, you need to sell) during a bear market, gonna have a bad time.

True, but incomplete. 0% bills/bonds is obviously legit but they're missing real estate & gold in their analysis unfortunately

Does the size of your country matter when deciding how much domestic stock to hold in your portfolio?

I'm 100% US equity and it's among the best decisions I have ever made. I'm so far ahead of VT only portfolios that even if US underperforms for a while I'll still almost certainly come out ahead.

GREATEST FINANCIAL VIDEO EVER

On individual level, gradually going from 60/40 stocks/bonds to 100% stocks after retirement lowers individual sequence risk immensely while cutting down expected returns quite mildly. Especially in highly valued stock market. EarlyRetirementNow block as mentioning this over 10 years ago when it came to same conclusion that portfolio should have mostly stocks in end of lifecycle for best returns.

I love these nerdy videos. Do not apologize! Lean into it. Some of us love it 🙂