I like David Dredge’s metaphor of a portfolio like a racing car: you do not need to reduce cruise speed when you have brakes. The 60/40 is a car moving always at the same speed, the one that would keep it on the track even on the nastiest turns (what Read more
Here at The Italian Leather Sofa I run a Model Portfolio, an empirical summary of all the concepts around asset allocation and diversification discussed on the blog. It is a short, and hopefully understandable, recap to the “ok, but how do I apply all the theories I read on the Read more
In April 2022, I introduced on this blog The Italian Leather Sofa Model Portfolio. As a reminder, here is the portfolio composition: The idea behind the portfolio is stolen from here. The link offers the best explanation to what I think is the most common question related to it, i.e. why Read more
A common theme in this blog’s last few years has been the search for the perfect retirement portfolio. If you are familiar with the ideal goal, you know the challenges to achieve it: longevity and sequence of returns risks, declining cognitive capacity to manage complex assets, various left-tail events, inflation Read more
In April 2022, I introduced on this blog The Italian Leather Sofa Model Portfolio. As a reminder, here is the portfolio composition: The idea behind the portfolio is stolen from here. The link offers the best explanation to what I think is the most common question related to it, i.e. why Read more
One aspect that has always fascinated? attracted? fooled? me about financial portfolios are Tactical Asset Allocation strategies. Rebalancing 10.0, a smarter approach to “buy low, sell high”, factors applied to asset classes, call it as you prefer. Strategic (static) Asset Allocation strategies are cool but there should be a better Read more
We are preparing a podcast episode where the three of us talk about our personal portfolios, how we invest our savings. As you can imagine, my part is a bit complex. Especially if you consider that we target the podcast for an audience who has basic to no financial knowledge. Read more
I live in Europe and the majority of this blog readers are European as well. The most recurrent complaint I receive is that I focus on USD investment without acknowledging the related FX risks for European investors. The Model Portfolio is built with USD assets simply because it was easier Read more
The first days of August have been engaging. I am unsure if many people were waiting so eagerly for some action for so long that they jumped at the first opportunity or if what happened was short but meaningful. For the right or wrong reasons, everyone had to comment. I Read more
I honestly do not know why the “holy s*&t Target Date Funds must have had an awful period” just came to my mind. I wrote a post on the infamous the Cederburg’s paper, A Critical Assessment of Lifecycle Investment Advice, not a long time ago. One of the (few?) reasonable Read more