Stanford Wonk Argues In Favor Of Levered Equity Funds

My latest for Alpha Baskets looks at a kind of unique idea for portfolio construction that includes liberal use of levered ETFs. The idea is similar to ideas from some other people that we’ve looked at before–specifically from Nassim Taleb and Zvi Brodie.

A long-time reader sent a link to an article from Forbes titled Leverage Your Way To A Richer Retirement. The article considered research done by Jason Scott at Financial Engines which looked at completely revamping the 4% rule (the 4% rule pertains to the optimal withdrawal rate for a retiree take from their portfolio without exhausting their funds). Scott’s portfolio is called the floor leverage rule and the basic idea put forward is to put the vast majority of the portfolio into bonds or perhaps TIPS to guarantee some minimum level of income from the portfolio. The suggested allocation was 85%.

Please click through for the entire post.

Submit a Comment

Your email address will not be published.

WP-SpamFree by Pole Position Marketing