[ QUOTE ]
Jeff, are you sure that you want an extremely value tilted portfolio? Yes, value has outperformed recently, but who knows the next 50 years.
[/ QUOTE ]
I'm not sure. I could adjust the value tilt by putting bigger percentages in the blended than in the value stocks.
What do you mean by recently outperforming? I know that there is no gaurantee that value stocks will continue to beat growth stocks--we may have just been in a 70-year period very favorable to Value:
<font class="small">Code:</font><hr /><pre>Figure 8: Equity Premiums from 1926 to June 30, 2003
Value Premium 1-Yr 5-Yr 10-Yr 15-Yr 20-Yr 25-Yr
Best 89.3% 127.6% 203.1% 266.1% 304.6% 394.4%
Average 4.3% 22.4% 53.4% 96.6% 146.4% 206.1%
Worst -42.8% -53.8% -49.0% -40.7% -17.1% 10.6%
Reliability 62.1% 78.3% 91.1% 94.6% 99.6% 100.0%</pre><hr />
Source (Figure 8)
The reliability number indicates how often the Value premium existed in a given time period. For example, if you took a random 1-yr sample, Value>Growth 62.1% of the time. The other numbers indicate the best, worst, and average premium sizes for the given time periods.