TLT Reddit Mentions | ChartExchange

I've been doing a lot of reading and research over the last few months. Bogleheads threads, Rational Reminder threads, Papers on SSRN. The thing I've noticed is there's really no free lunch to beating 100% S&P 500 or VT. Things that backtest well likely won't work as well moving forward. Long duration bonds hedged well during one of the longest bull markets in bonds, but failed in 2022. Gold has already had a major run up and there's no telling where it will go next. Shorter term bonds smooth out the ride but don't meaningfully increase returns. Leverage has to beat financing cost + expense ratio. Tactical Asset Allocation may work but in the days of high frequency trading, there are no guarantees. Trend looks great on paper but was flat 2009 - 2019 and that could happen again. Factors like momentum and value seem to only work well with long/short (vs. static long-only funds like AVUV) and I think I'd prefer to take macro bets vs. hoping a fund manager will successfully add alpha on an individual stock basis, though I'm happy to be talked out of that mindset.
What I do know is that I want to take a meaningful chunk of my portfolio (either 20% targeting 15% CAGR, or open to something more conservative with the whole thing). I am wondering if there's a realistic bet I can take to get there, without just blindly accepting more drawdowns.
Here are a few thoughts:
* **I believe International equity will shine moving forward.** I wish there was a cheap way to leverage International developed markets, but the best I can find is NTSD. I am not a big fan of WLDU (expenses, implementation with swaps, performance so far) though I am happy to hear others out if I'm wrong.
* **I believe in trend**. I like that it operates at a macro level, and can go long/short equities and commodities. I struggle to determine how much manager diversification I need to be successful, or whether a single manager plus other hedges like carry would also work well. I have had a really hard time figuring out what trend's future expected return is over cash, and if those estimates include DBMF like trend (includes equities) or KMLM like trend (excludes equities), and how much manager diversification matters in those estimates.
* **I believe in duration**. I know I'll get some slack for this, but I'd really like to hold a static allocation to TLT, or something like it. I want to be there for the day when the crisis hedge returns (2022 imho was not a pattern) and I don't think I can time it well, though I'm willing to hear ideas on how I could time an entry into it vs. holding today. EDV, GOVZ, and ZROZ are also possibilities, I'd just hold less of it. I am also open to a barbell approach of short term + long duration, like RSSB + ZROZ.
* **I am not sure how I feel about gold**. Something about the unreliable returns really bothers me, though I do agree the backtests look pretty. Do I need gold to increase CAGR, or does it just smooth out the ride?
* **I am not sure how many other hedges I need or what I believe will work**. I've struggled with two approaches:
* Approach 1, take a concentrated bet on the things you believe in, and lever it up. UPRO/EDV and done? Could be great, could fail miserably. 100% GDE? Could be great, could fail miserably.
* Approach 2, throw as many diversifiers as possible into the ring to get a portfolio with the highest SHARPE ratio, then lever that as up as best I can (retail without margin seems to top out around 220% notional unless I use daily reset LETFS, which I'm not sure of). Think domestic equity, international equity, gold, duration, trend, carry, maybe factors... I do have access to margin rates around 4.25%, but much of my portfolio is in tax-advantaged space where margin access is limited. I am open to considering box spreads, though I'd rather not. But where do you draw the line on how many "more things" you add?
I ***think*** I have my starting point. It looks like RSIT + NTSD + ZROZ. Actual allocations? I have no idea. Some research suggests a lot of trend and less static equity, others suggest 20% max in trend, but I was never able to figure out if that trend research includes equity trend or not.
But from here, I'm stuck. Do I just add more equity and hope I'll hit a higher CAGR with lower drawdowns? Do I want other alternative sources of return, like carry (RSSY)? And finally, do I use the remaining space to instead diversity into other trend managers, like MATE / DBMF / KMLM?
Obviously, if I could have a reasonable chance of higher CAGR with lower drawdowns than 100% VT, that's a bet I'm willing to take. However, I'd be even more inclined to ***match*** the drawdowns of 100% SPY but with higher expected CAGR.
Really appreciate any insight/guidance on where to go from here.