The Future of Portfolio Analysis Has More History Than Ever


Happy New Year!

The rolling of one year to another is an annual ritual full of champagne, fireworks, and overall good times. But far beyond the resolutions that may or may not last, January 1st is a particularly important date for me as it means there’s another year of data to collect, process, and study. And make no mistake, this is no ordinary year. With 2019 now in the books, Portfolio Charts can finally lay claim to a full 50 years of portfolio history!

I figure a landmark that big deserves something special to mark the occasion, so I’m excited to roll out something I’ve been working on for a very long time. Data depth is nice, but the thing that really sets Portfolio Charts apart is the breadth of asset options and the number of home countries covered. So in addition to adding that 50th year of history, I think it’s time to share my latest creation and truly open the numerical floodgates.

What if I told you I’m doubling the number of home countries, adding new assets like European stocks and a bunch of new bond options, and completely reworking every tool to unlock countless additional portfolio possibilities?

Interested? Of course you are! So let’s start 2020 with a bang.

The biggest difference you’re going to immediately notice is a new interface for the various tools. I’ve always prioritized design simplicity and generally like to keep the options lean, but listening to feedback from investors all around the world I learned that more flexibility would be useful. The end result is a bit more sophisticated than before, but it’s also way more powerful and hopefully just as intuitive.

You’ll learn how it works much faster by playing with the new My Portfolio tool for yourself rather than reading a long-form instruction manual, but allow me to point out a few features:

  • There are way more home countries than before with a special focus on filling out the options in Europe. The new countries include Spain, France, Italy, the Netherlands, Sweden, and Switzerland, and I also added a broad Europe market including both stocks and bonds. So stop settling for the nearest foreign alternative and start learning how portfolios performed within your own borders.
  • Unlike the old system that focused heavily on curating asset options based on domestic and international markets, the new one leaves every option available at all times. This should be especially helpful for Europeans investing in the EU rather than just their home country, Canadians investing in the United States, Americans exploring unique things like Swiss francs, and generally any investor inclined to think beyond the old-school definition of “international” as a single catch-all fund.
  • Check out all of those new bond options! From Euro area bond funds to 10-year benchmark bonds in every new country, there are way more options than before. And the inclusion of World bonds also means that a few portfolios calling for international bonds now have more accurate data and updated stats.
  • In an effort to standardize sources I had to make a few tradeoffs, and investors in Australia, Canada, Germany, and the UK may notice fewer domestic bond options than before. 10-year bonds are somewhere between LT and IT bonds in terms of performance and are a relatively common measure for both. And cash is pretty close to ST bonds already, so that’s a natural substitute when looking to model your own portfolio.
  • One important setting I want to call your attention to is the toggle under WLD. The default is Developed ex-US, but there’s also an option for All Developed that is more appropriate for investors outside of the US or for US investors interested in a single World fund including the United States.
  • Finally, see those speckled sections of the portfolio donut chart in certain situations? Adding so many new bonds forced me to re-think how I call out “international”, as that designation is no longer reserved for just stocks. Any domestic asset has a solid color while any international or global asset includes the dotted pattern. That domestic/international split is dependent on the portfolio and home country, and everything updates on the fly depending on your personal settings.

Pretty cool, right?

There’s definitely a lot going on and it may take a little time to soak everything in, but give it a try and I’m confident you’ll get the hang of it. I’ve put in a ton of design work on little details to help out, from the highlighted asset options in your home country to the explanations that take some of the mystery out of the acronyms. Cramming more than 100 asset options into a single interface while keeping it simple enough to actually use is no easy task, but I’m pretty happy with the results and I hope you are, too.

The Portfolio pages all have similar updates, and the interface is also a handy way to see how I interpreted the many portfolio concepts to different home countries. For example, let’s look at the Merriman Ultimate asset allocation in Sweden.

Flip through the countries on your own and the basic logic should quickly become clear — domestic stocks and bonds always go to the home country while all international options follow the original design intent. That said, I realize that not every person may interpret portfolio ideas the same way. Maybe you live in Sweden but think of Europe as your domestic market. Great! If you have a different portfolio interpretation than the default version, that’s what the My Portfolio tool is for. Fire that up and you can model dozens of different versions of your favorite portfolio to find the one that best meets your needs.

Of course, such a big change also requires a lot of general site updates that may take a while to complete. The Index Funds list will need major work to bring it up to speed with all of the new asset options (fund suggestions are a big help and highly encouraged!), and many of the tucked-away documentation may take some time to identify and refine. So if you spot anything that looks out of date or buggy, please don’t hesitate to contact me. I love feedback and appreciate having so many eyes to help identify problems faster than I ever can on my own. It’s a team effort, and I appreciate your support.

But enough about the boring details. Looking at the big picture, today is a day for celebrating a renewed opportunity for investing education. Portfolio Charts now has 50 years of data for more than 100 individual assets spanning 17 unique markets and translated to 12 different home countries including local currency and inflation. The portfolio options are virtually limitless! And for international investors in particular, there’s really no more need to take over-simplified US-based investing numbers at face value and hope they also apply to you. From withdrawal rates in Europe to drawdowns in Japan, the data is all there for you to explore.

So what are you waiting for? Learn about the wealth-growing power of asset allocation, find a portfolio to love, and spread the word so that others can do the same. Start the New Year with a renewed sense of financial empowerment, and make 2020 the year you take charge of your investments.

Happy New Year, and happy portfolio hunting!

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