What exactly is “Win ratio”? I thought it’s percentage of years where returns are higher than inflation, but that is not the case for the T-bill column.
During the drawdown they perform worse usually, but have a fierce upward swing in the recovery.
Also depends on the type of drawdown. For example an overvalued bubble-like drawdown i.e. Dotcom 2000, favors value stocks, as they are not bubbly & are cheap already. But a drawdown like 2008 will crush small caps and value stocks due to severe economic downturn and those stocks not having as much cushion to survive as well.
So does anyone underweigh US in their portfolio? If so, is it based on feeling or is there a rational reason for the number you ended up with (say, capped at 50%)?
I’m asking because everyone (EDIT to clarify: meaning passive investors) seems to use market-cap weighted instruments because that approach is the only sensible one… unless in this case it’s not applicable for some reason.
Depends on who you ask. I was talking to a friend last night and by chance he mentioned he invests, I didn’t know and he didn’t know about me either. He said “yeah sure, I invest in nVidia and Palantir, where else would one invest in?” with supreme confidence. Lucky? Dead sensible?
Market cap weight is good enough for a mostly passive investor. I have a +20% US tilt personally and not planning to change that.
So you can sleep well at night and are not kept awake by asking yourself “if having MF in a portfolio would have worked, I wouldn’t have lost as much, so thank God I had some”… wait what?
My plan is to be between 45-50% for US stocks.
This is to have not too much exposure to one country.
Nothing to do with expected returns. Purely risk management. If I am being perfectly honest, it’s still scary for me because of current administration where they interfere so much with running of companies. Amazon‘s recent drama is prime example.
I don’t know if it would make sense to go to 35% US weight. I don’t have conviction to make that decision yet
I agree. Hence my question in the second paragraph you haven’t quoted: what are the reasons people are not convinced of the pure passive (i.e. market-cap weight) approach anymore?
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