Hi All,
Thanks for the replies.
Wisdom Tree does offer a US Small Value ETF based on the S&P pure value index, and yes, it should work as well as DFA US Small Value. You do have to buy DFA through an advisor, so yes, unless you hold enough in your portfolio to warrant something like $2,000 a year advisor fees, whether or not you would want to go with a portfolio like this is questionable.
Vanguard's VBR is different than it used to be, as it is now based on the MSCI index which is actually more valuey than DFA's small value. You get the value premium, which to me is less risky, without the small premium, and the small risk.
Also, as has been mentioned, it does depend on the small value premium continuing.
Larry only holds 20% to 25% equities in his portfolio, and if I understand him correctly, he would allow his equities to drop to 15% before adjusting them back up to 20%, if that were to happen. He figures 20% Small Value might equal a 50% less value tilted allocation, and maybe 60% S&P 500, with the historic small value premium, and this historic low small value correlations to commodities. These are not Larry's words, but my speculation from CRS memory of our earlier conversations when he still posted here.
My old friend raddr came up with something like the Yale/Harvard suggested portfolio using Small Value instead of REITs prior to the attention paid these Endowments;
http://raddr-pages.com/research/CommodityFutures.htm The simple Yale/Harvard Endowment Portfolio, without using hedge Funds and Private Equity would be something like equal percentages of US/Intl./REITs/bonds/commodities.
The Yale/Harvard, or raddr's might fit most folks better than Larry's, for the reasons Y'all mention. In fact, I generally suggest the 4Pillars or one of the more conservative portfolios from Larry's book, or even Taylor's 4Fund for most. One of the reasons is as Petro mentioned, the valuations are not as wide as they once were between large blend and small, value, REITs, EM, &c. now.
I was just wondering if anyone might consider using a portfolio like this that was trying to beat the market, and wondered if folks felt it stood as good a chance of doing _beat the market_ as any other portfolio we might come up with?
Chin
