Listener Q&A Episode | #36

The Meb Faber Show

We’re back with the first Q&A episode of 2017.

We start by discussing the “Zero Budget Portfolio,” about which Meb wrote a recent blog post. The quick idea is that when considering your portfolio, you should start from scratch, or “zero.” Imagine your perfect portfolio – which markets you’d like to own, which assets, tilts, etc.

Now compare that perfect, hypothetical portfolio to your actual portfolio. To the extent that your real, owned assets have a place in your perfect portfolio, you’ll continue owning them. Any assets that don’t fit, you sell immediately.

But it’s not long before we dive into listener questions. A few you’ll hear tackled are:

- How do I decide whether I should use a robo-service or manage my portfolio myself? How likely am I to underperform a robo?

- We know that value can lag market returns, but should lead over time. What is the time horizon by which you determine whether a strategy like value is successful?

- Are there are country ETFs that you would not trade in a global, low-CAPE portfolio because of country risk?

- How has your timing model performed since you introduced it a decade ago?

- Will you discuss momentum investing versus chasing performance? It seems that a long-only momentum portfolio basically chases what has already gone up.

- Given real world tax issues, is active investing still a better strategy than buy-and-hold?

- Given that 44% of the S&P 500 revenue and profit comes from overseas, is there really a home country bias if you are invested in the S&P? And with this in mind, what is the right allocation to Emerging Markets?

As usual, there are plenty of additional rabbit holes, including options, currencies, and even the Baltic Dry Index. What’s Meb’s take on it? Find out in Episode 36.

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