Try this tool:
https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults
You can try two portfolios, 50/50 VWENX(Wellington which is Vanguard's risk adjusted fund)/VUSUX(Long Term Treasury) vs 100% VTSAX (Total Stock), holy cow!
2002-2018, everything reinvested, annual re-balance. the 50/50 blend would have converted $10,000 into $33,315, pure stock would be $36,084. But look at that maximum down drawn. -11.96% for 50/50 blend, -50.84% for pure stock! Worst year for 50/50 blend was -2.16% during the 2008 market crash vs -36.99% for 100% stocks!
I believe this is because Wellington provides excellent risk adjusted return compared to pure stocks. And long term treasury is the perfect hedge for stock market declines without sacrificing too much growth compared to traditional bonds (say VBTLX). I don't understand why people buy corporate bonds when they have much heavier correlation with stocks compared to treasuries! Re-balance is also super powerful, you are basically using the more expensive of the two assets to buy the cheaper of the two assets every time you re-balance.
What do you guys think？
Submitted July 08, 2018 at 10:46PM by hitmantb https://ift.tt/2NBSkSL
