Search found 36 matches
- Sat Feb 02, 2019 5:06 am
- Forum: Bonds
- Topic: is dividend adjusted into the price of a bond or not ?
- Replies: 7
- Views: 5921
Re: is dividend adjusted into the price of a bond or not ?
Price function is a bit confusing, moreover we have to make some assumptions for the calculations: I assume initial bond price is allways 100 with a coupon (rate) equal to last year ending price, then with Price function I calculate the ending price of a hypothetical 30 year bond (which equals price...
- Sat Jan 26, 2019 2:49 am
- Forum: Bonds
- Topic: is dividend adjusted into the price of a bond or not ?
- Replies: 7
- Views: 5921
Re: is dividend adjusted into the price of a bond or not ?
That's great, you shouldn't invest in anything you don't understand, checking the sorces and making your own calculation is part of the understanding process! About using real bonds and prices for calculations I agree is a better option to find real results. However, my aim in the blog was to show a...
- Fri Jan 25, 2019 6:18 am
- Forum: Permanent Portfolio Discussion
- Topic: PP Europe (Germany)
- Replies: 15
- Views: 12911
Re: PP Europe (Germany)
The differences you've found with different bond maturities (including the EXX6) are expected: longer bonds are more volatile so you can expect bigger ups and downs with perfect correlation. However, with the e20y ETF you can expect some different behavior, as it includes less quality bonds, and my ...
- Fri Jan 25, 2019 5:36 am
- Forum: Bonds
- Topic: is dividend adjusted into the price of a bond or not ?
- Replies: 7
- Views: 5921
Re: is dividend adjusted into the price of a bond or not ?
On your website I see that you also use 30yr german bonds with a return of 10.68%. I am curious which bond you used in 2018, so I can check my calculations. I use the information published by the Bundesbank about 30 year bond yields, which are estimated from the yield curve of listed German bonds: ...
- Thu Jan 24, 2019 3:09 am
- Forum: Bonds
- Topic: is dividend adjusted into the price of a bond or not ?
- Replies: 7
- Views: 5921
Re: is dividend adjusted into the price of a bond or not ?
Bond prices never include interest payments, therefore you have to consider them to calculate historical returns. However, you must consider also the price paid for the bond to calculate the real interest (dividend) received with the coupons: In your examples, if you bought the first bund (2048) on ...
- Wed Jan 23, 2019 12:52 pm
- Forum: Permanent Portfolio Discussion
- Topic: PP Europe (Germany)
- Replies: 15
- Views: 12911
Re: PP Europe (Germany)
That's the "current yield", what is usually used as "yield" is the "yield to maturity":
https://www.investopedia.com/terms/y/yi ... turity.asp
https://www.investopedia.com/terms/y/yi ... turity.asp
- Mon Sep 15, 2014 9:35 am
- Forum: Permanent Portfolio Discussion
- Topic: Why I Invest in the PP, in Pictures
- Replies: 13
- Views: 11466
Re: Why I Invest in the PP, in Pictures
Hi Tyler,
I hope you don't mind, but I used your pictures for a spanish post about the PP here:
http://www.rankia.com/blog/cartera-perm ... o-graficos
I hope you don't mind, but I used your pictures for a spanish post about the PP here:
http://www.rankia.com/blog/cartera-perm ... o-graficos
- Mon Sep 08, 2014 9:12 am
- Forum: Permanent Portfolio Discussion
- Topic: Tax Tail Wagging My PP Dog
- Replies: 17
- Views: 11491
Re: Tax Tail Wagging My PP Dog
Some simple options:
-Sell only from the stocks found with less gains.
-Sell something now and something more in january
-Rebalance stocks to 30% or so, instead of 25% (we don't really know if stocks will be up or down next years, but we know for sure that you are going to pay taxes on the sellings).
-Sell only from the stocks found with less gains.
-Sell something now and something more in january
-Rebalance stocks to 30% or so, instead of 25% (we don't really know if stocks will be up or down next years, but we know for sure that you are going to pay taxes on the sellings).
- Mon Feb 17, 2014 8:50 am
- Forum: Gold
- Topic: Gold and Inflation
- Replies: 18
- Views: 11835
Re: Gold and Inflation
The PP theory says gold should do well when inflation is high but the run up since 2002 seems to have very little to do with inflation and much more to do with the global increase in all commodity prices – steel, oil, etc. etc. based on the global (read Chinese) surge in consumption. Inflation was ...
- Sun Feb 16, 2014 4:17 pm
- Forum: Permanent Portfolio Discussion
- Topic: Rebalancing idea: What if...
- Replies: 6
- Views: 3458
Re: Rebalancing idea: What if...
It's a problem of reversion to the mean VS momentum, sometimes you will earn more with that rebalancing, sometimes you won't. However if you pay taxes the less rebalancing the better.
- Thu Jan 02, 2014 1:58 pm
- Forum: Permanent Portfolio Discussion
- Topic: Permanent Portfolio 2013 Results.
- Replies: 39
- Views: 20518
Re: Permanent Portfolio 2013 Results.
I posted a summary of this year's results. Looks like around -2.4% for the year: https://web.archive.org/web/20160324133409/http://www.crawlingroad.com/blog/2013/12/31/permanent-portfolio-2013-results/ As I said in the blog, if you check again 2013 returns in morningstar the results are a bit better
- Wed Sep 18, 2013 3:56 pm
- Forum: Permanent Portfolio Discussion
- Topic: 5th Economic Climate? Financial repression
- Replies: 3
- Views: 3713
Re: 5th Economic Climate? Financial repression
HB said that lots of things can happen, but whatever it is it will always lead to one of the 4 economic conditions. So financial repression is no exception, it's just a policy that can be consequence or cause of one of the 4 economic climates.
- Thu Sep 05, 2013 5:52 pm
- Forum: Permanent Portfolio Discussion
- Topic: Market Manipulation
- Replies: 13
- Views: 9469
Re: Market Manipulation
Big players (and the government is one of the biggest) allways try to manipulate markets, but markets have their own forces. You talk about bond market for example, of course government can try to lower rates and can get it for some time, but if people really think higher inflation is comming they w...
- Thu Sep 05, 2013 5:33 pm
- Forum: Permanent Portfolio Discussion
- Topic: New book from Bill Bernstein - Deep Risk
- Replies: 32
- Views: 13143
Re: New book from Bill Bernstein - Deep Risk
As I understood it, Mr. Bernstein's main criticism of the permanent portfolio is that 25% in long term bonds is a very expensive way to insure against what he considers to be a very low probability event. He believes that the biggest risk facing investors is, by a long shot, inflation. As an altern...
- Thu Sep 05, 2013 5:19 pm
- Forum: Permanent Portfolio Discussion
- Topic: Why "should" the PP system work?
- Replies: 49
- Views: 17903
Re: Why "should" the PP system work?
rickb gave a very good explanation and MediumTex's is intuitive too. However, there is still the question about how the hell Harry Browne made his calcs for the estimated long term Permanent Portfolio real returns. In fact, I think in his first books (3 decades ago) he estimated 5% real return, and ...
- Fri Aug 30, 2013 11:12 am
- Forum: Permanent Portfolio Discussion
- Topic: New book from Bill Bernstein - Deep Risk
- Replies: 32
- Views: 13143
Re: New book from Bill Bernstein - Deep Risk
I think Bernstein is one of the few respected academics who understand and value Harry Browne's work. I allways enjoyed his books, the four pillars is one of my favourite investments books ever, but I haven't read his "investment for adults" series and it seems very interesting.
- Tue Aug 20, 2013 5:45 pm
- Forum: Permanent Portfolio Discussion
- Topic: PP compared to 8 other asset allocation strategies by Mebane Faber
- Replies: 31
- Views: 18405
Re: PP compared to 8 other asset allocation strategies by Mebane Faber
You can backtest a lot of things here:frommi wrote:Give me numbers!brownehead wrote: A PP without cash is far less stable, if you backtest it of course the CAGR is higher because the growing assets are the other 3, but DDs and volatility are much higher too!
http://www.peaktotrough.com/hbpp.cgi
- Mon Aug 19, 2013 6:00 pm
- Forum: Permanent Portfolio Discussion
- Topic: PP compared to 8 other asset allocation strategies by Mebane Faber
- Replies: 31
- Views: 18405
Re: PP compared to 8 other asset allocation strategies by Mebane Faber
A PP without cash is far less stable, if you backtest it of course the CAGR is higher because the growing assets are the other 3, but DDs and volatility are much higher too!
- Fri Aug 09, 2013 2:34 pm
- Forum: Permanent Portfolio Discussion
- Topic: Stay the course...How long is too long?
- Replies: 12
- Views: 6159
Re: Stay the course...How long is too long?
The theory behind the PP is that it is a long term investment strategy. Makes a lot of sense. But when you get to near retirement age "long term" is relative. I recently spent a few days making calculations and found that during my pre-PP 30-year investment history I averaged 6% annual r...
- Fri Aug 09, 2013 11:12 am
- Forum: Permanent Portfolio Discussion
- Topic: Suggestions for 5x20?
- Replies: 23
- Views: 13272
Re: Suggestions for 5x20?
Harry Browne did the same. Cash doesn't cover recessions but he added it anyway, probably more for stability than anything else. Stocks, bonds and gold are the necessary ingredients for a PP. Beyond that it's personal preference. Harry himself suggested in his book 'why the best-laid...' that you c...
- Thu Aug 08, 2013 3:01 pm
- Forum: Permanent Portfolio Discussion
- Topic: Suggestions for 5x20?
- Replies: 23
- Views: 13272
Re: Suggestions for 5x20?
It has no sense to look for a new asset without a new economic scenario to cover. If you add new assets just for more "asset diversification" you have to find in which scenarios they work better and reduce the corresponding part from the standar PP. For example, if you add REIT and think t...
- Tue Aug 06, 2013 3:05 pm
- Forum: Permanent Portfolio Discussion
- Topic: Tempted to rebalance at 30
- Replies: 20
- Views: 12264
Re: Tempted to rebalance at 30
As far as 0% on the downside: I'm assuming there was never a point at which any asset was worth zero. brownehead, can you tell us what the lowest point actually was for any asset in this simulation? Of course no asset went to zero, but gold almost did: minumum for stocks was 9.63% in 1979 (gold 71...
- Tue Aug 06, 2013 2:49 pm
- Forum: Permanent Portfolio Discussion
- Topic: Tempted to rebalance at 30
- Replies: 20
- Views: 12264
Re: Tempted to rebalance at 30
Btw, other "interesting" bands for a possible VP based on the PP assets: 0/50 -> CAGR: 10.40% stdev: 8.61 (best risk adjusted return, for that historical period) 0/62.5 -> CAGR: 11.72% stdev: 13.07 (best return, for that historical period) Thanks brownehead. Very interesting. In sum...
- Tue Aug 06, 2013 12:43 pm
- Forum: Permanent Portfolio Discussion
- Topic: Tempted to rebalance at 30
- Replies: 20
- Views: 12264
Re: Tempted to rebalance at 30
I think the results aren't that much different for 20/30 rebalancing vs. 15/35.. I personally make rebalancing optional at 20/30 (based on my own discretion) and mandatory at 15/35. According to my backtests for a strict PP portfolio (with t-bills) there were some differences in CAGR and volatilit...
- Tue Aug 06, 2013 9:46 am
- Forum: Permanent Portfolio Discussion
- Topic: Tempted to rebalance at 30
- Replies: 20
- Views: 12264
Re: Tempted to rebalance at 30
The key is the "strong urge", if it is because you dont't feel your portfolio safe enough with so many stocks, go ahead and get your pace of mind! The worst sceneario would be to lose some stock earnings... but chances of losing and winning are equal (I mean nobody know) so the pace of min...