Expected future returns, difference in total market returns, lessons from 1928 to 2023 risk and return and more

Watch the video here.

Chris Pedersen and Daryl Bahls join Paul to answer questions from investors of all ages. 

1:  I hold a REIT fund in my tax deferred account but have found other funds include REITS.  Am I overweighted in REITS and what should I do about it?

2:  Are all total market index funds created equal?  Should there be meaningful differences in returns? Chris compares the returns of 4 total market funds using Portfolio Visualizer.

3.  I am a 79 year old retiree who wants to use your 2 Funds for Life strategy.  How do you recommend I put my portfolio together? 

4.  How would I establish an expected rate of return for the U.S. 4 Fund Portfolio? 

5. I’m a young investor with a Worldwide All Value Portfolio.  As I age should I start to transition to a lower risk equity portfolio? 

6.  The Avantis funds use a quality factor to produce better returns.  Why don’t all small cap value funds use the quality factor in their selection of companies? 

7.  How have real returns of equity asset classes compared to theoretical returns? 

8.  I want to carefully build my portfolio to work within my risk limits. My challenge is to decide what period of time represents the kind of losses I’m willing to accept.  If I use the information starting in 1928 or in 1970 the loss exposure is very different.  Which period should an investor use to match their asset allocation to their risk tolerance? 

9. Chris, Daryl and Paul discuss the long term implications of the risk and return of a 60% equity and 40% bonds using a  combination of equal percentages of the S&P 500 and small cap value.

During the presentation Daryl and Chris reference a new 1928-2022 Fine Tuning Table for an equity portfolio of 50/50 S&P 500 and Small Cap Value. 

Daryl introduces a new table that compares the returns from 1928-1969 with 1970-2023