New Approach, New Destinations


Innovation and progress often come in waves, and for whatever reason the stars have aligned the past few months and it has been an incredible time for new ideas. Between the necessity of a few design problems, the learning process of my own experiments, and the inspiration of an assortment of well-timed serendipitous feedback, things have really escalated quickly and I have some exciting new updates to share.

I won’t bore you with every detail, but here’s a quick backstory to get you up to speed. A few months ago I rang in the new year with lots of new data and a fancy new interface designed to seamlessly translate portfolio ideas between countries. I followed that up with a recent update to the Assets section that forced me to manually spell out the ingredients for every portfolio recipe, which helped me realize that my method for automatically translating portfolio ideas wasn’t necessarily capturing portfolio design intent the way it should. In the process of brainstorming a workaround, I got some great feedback (looking at you, Monevator) that helped me see that I was over-thinking it and there was a pretty straightforward solution. And the solution just happened to make it really easy to not only translate portfolios to countries I already had data for but also for a few I did not.

So long story short, the portfolios and calculators all have a really slick new interface and you can now use it to model portfolios in Australia and Japan!

Whenever you open a portfolio or charting tool, you’ll see an asset allocation interface that looks like this:

The clean appearance masks a lot of strategy that went into the design. The goal is to make it very easy to model any portfolio on the site in a variety of different countries while keeping everything as simple and intuitive as possible. That’s no easy task with all of the data required!

The first thing you probably notice beyond the new horizontal layout is that the long-form asset descriptions have been traded for short abbreviations. If you’re not sure what something means, have no fear. All of those codes are also links that will take you to the appropriate Asset page to explain the asset in detail. In fact, the links are even contextual with the country setting and will always take you directly to the asset page of the country you’re interested in. So there’s an entire site full of information just a click away without requiring a wall of repetitive words for every asset and country.

If you’ve been using the site the last few months, you may also be wondering where the global/regional international toggle went. After reviewing every portfolio on the site, I found that only one (the Coward’s Portfolio) required the regional setting and it could be easily replicated using global options. While I imagine some investors might enjoy fine-tuning specific US, Europe, and Pacific allocations, in general I think most foreign investors are best suited with good World fund that already contains them all. So rather than confuse people with more options than they need, I decided to simplify and focus on the core international options that make the most sense in almost every situation — World or World ex-US, with Emerging Markets to fill out the market coverage beyond developed countries.

Next, let’s look at what happens when we set the interface to Australia.

There are three things to pay attention to.

First, notice that the currency and inflation used on the calculations is clearly labeled below the country. Second, you’ll see that the market settings changed in the domestic, international, and bond fields. Not only did the domestic stocks and bonds change to Australian options, but the international stocks also changed from a World ex-US fund to a true World fund (including the US) more appropriate for an Australian investor.

And finally, the domestic row now only has one option. I don’t have good data for every Australian asset, and honestly the market probably isn’t large enough to support all of them anyway. While before I tried to fill this in with data from a nearby country or local region, any portfolio percentage allocated to an unavailable domestic asset is now simply rolled up into the total stock market. It’s simpler, maintains consistent portfolio design intent, and I’ve come to learn better matches the way knowledgeable investors outside of the US generally think about diversification anyway.

One final benefit of keeping the domestic row open is that it also leaves space for any new domestic data as sources become available. Like, for example, full size and value tilts for Japan.

I’m super excited about adding Japan to the site. Aside from being a huge financial market in its own right, its stock and bond histories are so very different from the United States that it is often cited as a worst-case example for long-term economic growth that will challenge even the best portfolio ideas. In fact, some of the results are so surprising that I had to repair a few broken calculators that couldn’t handle the data! To have complete Japanese stock and bond datasets to fully replicate portfolio ideas from a Japanese perspective is an out-of-sample backtesting dream, and I look forward to writing future articles to explore that topic in more depth.

So in summary, the new calculator interface is a powerful and comprehensive tool to model any asset allocation you like in six different countries while remaining simple and elegant enough that it won’t require a thick manual to operate. You’ll see it repeated not only in the Charts but also the Portfolios, as it fits my ongoing goal to explain complex data-driven ideas in an easy-to-understand visual way. Be sure to also visit the Assets section to learn about the new country options. And don’t be surprised if your favorite portfolio has slightly different numbers as well, as I took the opportunity with so many changes to finalize a few late-arriving 2018 data points and even improve my bond calculation methodology.

Like I said, I’ve been busy. While I take a little time to recover from the hard work, I hope you enjoy the end product. The design process may be personally rewarding, but my ultimate goal is to help you find the right portfolio for your personal needs. So whether you spot a bug or have an idea for a future improvement, please don’t hesitate to contact me. Portfolio Charts is a personal labor of love, but I like to think of it as a team effort.

Thanks for reading, contributing, and spreading the word. Now get busy securing your financial future! Data is nice but it’s really all about choices, and my sincere hope is that the new site design will make those choices a little easier.



If you’re re-reading this since it was first published, no you’re not going crazy. In the original iteration, I discussed why I removed the various growth index options from the tools. The feedback was fast and furious on that, and I quickly learned that growth funds are way more common than I realized! Even though they’re not very popular among the professional adviser class, growth funds are a staple of many retirement accounts and keeping them as an option is important to compare current investments against any new ideas. So growth funds are back, and I updated the post to reflect the new design. Thanks to everyone who provided feedback!