Search found 178 matches

by Pet Hog
Wed Oct 16, 2019 11:56 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

This might be easier: gold. Same lady, same strategy and history. She invests $100,000 in gold in taxable account, Scenario (1). She never sells for 40 years. There are no dividends. The gold goes up in value to $2,000,000. I think that, long term, gold has done almost as well as stocks, so it might...
by Pet Hog
Wed Oct 16, 2019 11:16 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

For some light relief, on to Scenario (2): Trad IRA. Same history. $100,000 invested, and a tax break. Her bank balance is $0. She earns 2% in dividends and invests it all -- no taxes along the way. The portfolio grows to $2,000,000. After 40 years, she retires. Withdraws $100,000 from her Trad IRA....
by Pet Hog
Wed Oct 16, 2019 11:05 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

OK, I'll do one more, for long-term treasuries. Same situation and history for the lady investor. But now she is investing $100,000 only in LTTs. For a coupon yield, I'm going to pick 2%, close to what it is today. The investor buys the LTTs in a taxable account, Scenario (1). Again, she reinvests a...
by Pet Hog
Wed Oct 16, 2019 10:03 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

Now, in retirement, she wants to live off $100,000. At 2%, the dividends earned this year total $20,000. That means our investor has to sell $80,000 worth of stock. That amount has a tax basis of $20,000 (25%). So the capital gain of that $80,000 is $60,000. OK, I spotted one mistake already, but i...
by Pet Hog
Wed Oct 16, 2019 9:36 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

Scenario (3) : Roth IRA. Same background as before. Our investor puts $100,000 into a Roth IRA. She gets no tax benefit for doing so. She pays 24% on that money earned before investment. We can consider her to have a bank balance of -$24,000. Over 40 years she reinvests the dividends, averaging $10,...
by Pet Hog
Wed Oct 16, 2019 9:19 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

Scenario (2): Stock investing in a Traditional IRA. Same background as before. Our investor places $100,000 over 40 years into a Trad IRA. She gets a tax break on that money. She's in the 24% tax bracket, so there is a saving of $24,000 relative to the previous example. We can consider her to have a...
by Pet Hog
Wed Oct 16, 2019 8:45 pm
Forum: Permanent Portfolio Discussion
Topic: Investment locations?
Replies: 26
Views: 5890

Re: Investment locations?

This topic is so fundamental to PP investing, I think we need to reach a definitive consensus. I need some numbers to understand the complexity, and I would love it if you all would correct me if I make a mistake below. Thanks. Let's consider a PP investor, who invests in the four assets, but let's ...
by Pet Hog
Wed Oct 09, 2019 9:41 am
Forum: Permanent Portfolio Discussion
Topic: Gold / Stock / Bonds at highs or near highs?
Replies: 65
Views: 10749

Re: Gold / Stock / Bonds at highs or near highs?

I hear ya. It's true that we don't have a lot of data for rising rates. But we do have a full decade of truly skyrocketing rates. And during that time the PP still stayed right within its normal band of returns. Personally, I don't think the PP was driven by falling rates any more than it was drive...
by Pet Hog
Wed Oct 09, 2019 9:27 am
Forum: Permanent Portfolio Discussion
Topic: The Bond Purchase Question!
Replies: 6
Views: 1444

Re: The Bond Purchase Question!

Assume I was investing $400,000 total. That would be $100,000 in each investment. Now assume that at a future date I now have $140,000 in bond value and $86,667 in each of the other three investments. I am now supposed to sell $40,000 worth of bonds and buy $13,333 of each of the other investments....
by Pet Hog
Mon Sep 30, 2019 3:00 pm
Forum: Stocks
Topic: DIY individual stock fund
Replies: 45
Views: 6123

Re: DIY individual stock fund

Pet Hog, I'm not doing any kind of quantitative analysis because I don't think that would improve results over random picks. Broadly, I'm going for what I think are solid "value" stocks that have a record of increasing dividend payouts, have a relatively low P/E (or at least not too high), and are ...
by Pet Hog
Mon Sep 30, 2019 2:49 pm
Forum: Stocks
Topic: DIY individual stock fund
Replies: 45
Views: 6123

Re: DIY individual stock fund

WHOA! Unexpected! If you equal-weight the Dow 30, and rebalance annually, it's really kick-a$$. I had to omit DOW and V because they don't go back far enough in time. You've inspired another backtest, Ochotona! The 30 components of the DJIA on January 1, 2000 were: Alcoa Inc. AlliedSignal Incorpora...
by Pet Hog
Thu Sep 26, 2019 12:42 pm
Forum: Stocks
Topic: DIY individual stock fund
Replies: 45
Views: 6123

Re: DIY individual stock fund

Kriegsspiel, I have no fixation with randomness. I'm wondering if a small equal-weighted portfolio might match or out-perform a market-cap-weighted index. I can't buy every stock in, say, the SP500 (I'm not that rich), so the challenge would be buy a subset and get similar (hopefully superior) retur...