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What do you think of a 40% VTSAX/40% BRK-B/20% Bond Portfolio in retirement?

 
General Discussion
Last Post by Jason 3 years ago
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Posts: 7
 Jason
Topic starter
Nov 15, 2022 2:52 pm
(@jason)
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Joined: 6 years ago
[#853]

I was comparing my beloved VTSAX to BRK-B after noticing Berkshire has outperformed the market in the past 12 months.  VTSAX has a better record over the past 24 months though and that got me thinking, would a 40% VTSAX/40% BRK-B/20% Bond Portfolio outperform a typical 80/20 portfolio?  The obvious problems here are there isn't enough historical data on Berkshire to backtest it properly and Berkshire may look and perform much differently in 10 years when it will likely be under new management.  Despite all of that, any thoughts on this allocation?


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 earlyretirementnow.com
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Nov 16, 2022 11:25 am
(@earlyretirementnowcom)
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Joined: 10 years ago

Good point. BRK is a solid company and outperformed the overall index YTD. It's the flavor du jour because all the high-flying growth stocks got hammered, while value stocks held up very well in 2022. All that can reverse again. 

But I agree, if I wanted to mix in a few single-name stocks into my portfolio, BRK would be high on the list. It's diversified over many smaller names. There's also the zero-dividend, which is tax-efficient in a taxable brokerage account.

But don't get your hopes up too high. That 40/20/40 portfolio looks very similar to the 80/20:

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=4&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=80&allocation1_2=40&symbol2=IEF&allocation2_1=20&allocation2_2=20&symbol3=BRK.B&allocation3_2=40

 


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Posts: 7
 Jason
Topic starter
Nov 20, 2022 9:51 am
(@jason)
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Joined: 6 years ago

As always, thank you Karsten!  Thank you also for now making me aware of the portfolio visualizer website.


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