Question

I've circled back to The Butterfly Portfolio episode () and I'm curious about everyones thoughts on a modified version. Instead of doing Gold, swap it out for REIT's. I've never been a big fan of having gold in my portfolio. 20% Domestic Large Cap 20% Domestic Small Cap 20% Long Term Bonds 20% Short Term Bonds 20% REITs (Vangaurd's VNQ) Pros or cons?  
https://www.listenmoneymatters.com/...rfly/

Answer 1

Bond heavy portfolio imo, didn’t work for me at my age. I also prefer having mid caps as they tend to outperform large caps and be less risky than small caps. But I agree with you that I thought 20% was way too gold heavy. I like the idea of a REIT replacement.  

Comments

Very bond heavy. Another thing I'm not crazy about, but I do see the logic behind the construction of the portfolio.  

Answer 2

I like a simple 80/20 approach. Buy-and-hold for the long run.  

Answer 3

Feels like you’ll have a small cap and REIT tilt and a medium duration bond fund in functionality.  

Answer 4

Your post reminded me to ask my Golden Butterfly question. I have a sum of $ I want to put in. I’ve been doing $x/week to drain the account it’s in until it’s all in GB. Since GB does well in any market should I still be dollar cost averaging or put the $ in all at once?  

Comments

Time in Market is better than Timing the Market (Dollar Cost Averaging is a form of timing the market) The beauty of the Butterfly is that it has a super low timing sensitivity. So, just put it all in now if you know that's what you want to do

Answer 5

I'm in!  

Answer 6

I was thinking of the exact same thing. A modified Golden Butterfly. My idea was to start a college fund for my son now and in 16 years hopefully have it fully or at least partially funded. I’ve set aside approximately $200/month for it. Thoughts or ideas?  

Answer 7

The whole purpose of the golden butterfly is the lack of correlation between asset classes. REITs are much more correlated to market conditions than gold. Gold also acts as a dollar hedge. I'm not saying I like the portfolio with all that gold, but you will be taking some of the magic away from it.  

Comments

This. You could certainly swap REIT for gold, but I’d imagine you will lose some of the stability. You could actually (back) test this by building a custom portfolio on portfoliocharts. com

Answer 8

What I'm trying to do is swap the gold for commodities, similar to the all weather portfolio. I found two commodity ETFs without k-1s (FTGC ans SDCI). But I am interested in is to know if anyone has found a way to invest in gold ETFs that don't require complicated tax treatment.  

Comments

After listening to all of the info about the golden butterfly, I decided to invest in some gold and did so via my roth IRA by buying gold ETF's there so I won't have to deal with any of the taxes in the long term. The only problem with this setup if you are trying to do that is that it will be hard to view as you will have the gold in your retirement fund vice the main portfolio.  

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@hoitytoity2 Thanks!