VIOV
Vanguard S&P Small-Cap 600 Value ETF
stock NYSE ETF

They are just a few different terms for something that's helpful during our accumulation phase & substantially more important during our decumulation phase.
Volatility harvesting, the volatility principle, Shannon's demon effect, capitalizing on volatility are all saying the same thing.
[Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts](https://portfoliocharts.com/2022/04/12/unexpected-returns-shannons-demon-the-rebalancing-bonus/)
If you're sticking to a defined asset allocation, just by adding cashflows or at least rebalancing, you are volatility harvesting. You'll buy more SCV when growth is on a tear, or more long bonds (for instance) when the market is down. By maintaining your chosen asset allocation, you're just buying what is cheapest, essentially. The effects from the SCV risk premium seem to be stronger than Shannon's demon, but it's still worth noting. Volatility harvesting only works if you hold at least two assets of low correlation. But as far as I can tell, if you held 100% SCV from the early 70's, you'd have outperformed literally everything else.
Yes, I recall many folks mentioning that SCV tends to be a bumpier ride, which seems true, but I don't see it underperforming for decades. VIOV never traded sideways for more than 4 years. You'd still come out ahead so long as you kept buying regularly. So I totally get your point. More than ballsy, it just seems smart so long as you can stick to that strategy long-term. I've only been investing for 4 years, so haven't really invested through a bear market. There are frankly some situations I haven't been in to be able to assess my own behavior.
Risk Parity Radio is a cool podcast I listen to sometimes and the guy advises 50/50 SCV/LCG for accumulation portfolios, which has worked great in the past. The problem with that for me is valuations. I think there's value to having a flexible approach to asset allocation. Everyone making good returns with SPY or growth stocks seem to think that valuations don't matter, but they always seem to matter eventually.
Right now, I'm comfortable with:
25% AVUV
20% SCHG
20% VTV
20% VXUS
5% EDV
5% AVDV
5% AVES
Maybe I need to build more conviction to increase small caps beyond this. Some people argue that the SCV premium no longer exists, but the higher expected returns seem to go along with periods of underperformance.

They are just a few different terms for something that's helpful during our accumulation phase & substantially more important during our decumulation phase.
Volatility harvesting, the volatility principle, Shannon's demon effect, capitalizing on volatility are all saying the same thing.
[Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts](https://portfoliocharts.com/2022/04/12/unexpected-returns-shannons-demon-the-rebalancing-bonus/)
If you're sticking to a defined asset allocation, just by adding cashflows or at least rebalancing, you are volatility harvesting. You'll buy more SCV when growth is on a tear, or more long bonds (for instance) when the market is down. By maintaining your chosen asset allocation, you're just buying what is cheapest, essentially. The effects from the SCV risk premium seem to be stronger than Shannon's demon, but it's still worth noting. Volatility harvesting only works if you hold at least two assets of low correlation. But as far as I can tell, if you held 100% SCV from the early 70's, you'd have outperformed literally everything else.
Yes, I recall many folks mentioning that SCV tends to be a bumpier ride, which seems true, but I don't see it underperforming for decades. VIOV never traded sideways for more than 4 years. You'd still come out ahead so long as you kept buying regularly. So I totally get your point. More than ballsy, it just seems smart so long as you can stick to that strategy long-term. I've only been investing for 4 years, so haven't really invested through a bear market. There are frankly some situations I haven't been in to be able to assess my own behavior.
Risk Parity Radio is a cool podcast I listen to sometimes and the guy advises 50/50 SCV/LCG for accumulation portfolios, which has worked great in the past. The problem with that for me is valuations. I think there's value to having a flexible approach to asset allocation. Everyone making good returns with SPY or growth stocks seem to think that valuations don't matter, but they always seem to matter eventually.
Right now, I'm comfortable with:
25% AVUV
20% SCHG
20% VTV
20% VXUS
5% EDV
5% AVDV
5% AVES
Maybe I need to build more conviction to increase small caps beyond this. Some people argue that the SCV premium no longer exists, but the higher expected returns seem to go along with periods of underperformance.