Yes, I noticed that 4 months was a sweet spot, but it is close to what I use for equities, so I figured I should just go with it. Almost any reasonable look-back seems to do OK (not carefully investigated).

Completely agree about useless trading for the first ten years. Which is a tell, really. The graphic representation that Portfolio Visualizer produces shows bog standard aggregate bond returns until 2008, and then the line really moves. If you look at the "timing periods" tab you see that in 2009 the thing spent 14 months in high yield bonds, which returned 41%. Something similar happens in 2012. I suspect that's the entire difference.

Personally, I've always thought of high yield bonds as an equity substitute, and that's certainly what they look like here. I think it would be hard to put together an out-performing DMFI model that doesn't include junk bonds for extra juice.

Baltassar

Mechanical Investing FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.