Search found 12 matches

by volcker
Fri Jul 03, 2020 1:53 pm
Forum: Permanent Portfolio Discussion
Topic: Stock Indexes Seem Busted. 20% in 4 stocks
Replies: 19
Views: 1718

Re: Stock Indexes Seem Busted. 20% in 4 stocks

William Bernstein, a respected financial author, in his book Rational Expectations, recommends for US residents (or investors who plan to have retirement liabilities in USD) that least 50% of your stocks be in the US market, despite the high CAPE. That's probably standard advice.
by volcker
Fri Jul 03, 2020 1:45 pm
Forum: Permanent Portfolio Discussion
Topic: Stock Indexes Seem Busted. 20% in 4 stocks
Replies: 19
Views: 1718

Re: Stock Indexes Seem Busted. 20% in 4 stocks

I think it is risky, but not necessarily because of the concentration in crazy growth stocks. The Shiller CAPE of US stocks is historically high, substantially more so than the CAPE of developed ex-US stocks. There's a (not strong) statistical relationship between the CAPE and the next 10 year stock...
by volcker
Wed Jul 01, 2020 7:29 pm
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Re: Should I include cash and bonds?

Someone else pointed out that this guy did an analysis and found that adding bonds to a stock/gold mix reduced your overall risk very little, but at the expense of massive performance: https://www.youtube.com/watch?v=LA2Yr6NoZyA (around 5:05 is where he gives his opinion). His ideal allocation is 6...
by volcker
Wed Jul 01, 2020 2:38 pm
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Re: Should I include cash and bonds?

Expected return is a guessing game. People have been guessing against bonds for many years now, very incorrectly. When bonds actually start to underperform, then we can talk about lowering their expected return. In the meantime, there is no evidence that this will happen, it's simply a guess. I'd s...
by volcker
Tue Jun 30, 2020 6:27 pm
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Re: Should I include cash and bonds?

All stock markets end up falling ..when America sneezes the world catches cold ..owning foreign stocks will offer no protection if we tank here Often true in the short term, but not in the long term. I was referring to pmward's comment that the US stock market has been on fire since 2009. Developed...
by volcker
Tue Jun 30, 2020 4:47 pm
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Re: Should I include cash and bonds?

Sure you will be rebalancing between stocks and gold. But that is only 2 uncorrelated assets. The more uncorrelated assets the better when it comes to rebalancing. It depends on the expected return of the assets. I have not ran the correlations, but in the hypothetical case that the Argentinean pes...
by volcker
Tue Jun 30, 2020 1:30 pm
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Re: Should I include cash and bonds?

Well, we have had deflation... for 12 years now and going. I do think that bonds have unique diversification benefits, as there are times when bonds will perform well while stocks and gold do not. That being said, if you're ok taking that risk, and have a strong enough stomach for the volatility, t...
by volcker
Tue Jun 30, 2020 12:20 pm
Forum: Bonds
Topic: FED Yield Curve Control
Replies: 7
Views: 1264

Re: FED Yield Curve Control

pmward wrote:
Tue Jun 30, 2020 12:07 pm
Part of me kind of wants to create an alter-ego user called "Bernanke" and then Volcker and Bernanke can have an epic thread duking it out ;)
Would Paul even talk to Ben? ;D
by volcker
Tue Jun 30, 2020 11:51 am
Forum: Permanent Portfolio Discussion
Topic: Should I include cash and bonds?
Replies: 15
Views: 1456

Should I include cash and bonds?

Hi everyone, I'm targetting a portfolio 50/50 stocks/precious metals, plus 2 years worth of living expenses in cash (I'm currently selling some gold to buy stocks to reach the target). While my portfolio excludes half the assets in the PP, I'm posting here since I think this community could provide ...
by volcker
Tue Jun 30, 2020 11:47 am
Forum: Bonds
Topic: FED Yield Curve Control
Replies: 7
Views: 1264

Re: FED Yield Curve Control

pmward wrote:
Mon Jun 29, 2020 5:45 pm
Nice username :)
I'm a fan of the late great chairman.
by volcker
Mon Jun 29, 2020 5:45 pm
Forum: Bonds
Topic: Bond FAQ
Replies: 5
Views: 22975

Re: Bond FAQ

The Permanent Portfolio holds 25% of its allocation in long term US Treasury bonds. There is an extensive FAQ on the subject here: https://web.archive.org/web/20160324133409/http://crawlingroad.com/blog/2009/02/09/permanent-portfolio-25-bond-allocation-faq/ Are these FAQs up somewhere? The link is ...
by volcker
Mon Jun 29, 2020 5:37 pm
Forum: Bonds
Topic: FED Yield Curve Control
Replies: 7
Views: 1264

Re: FED Yield Curve Control

They did the same thing in the WWII era by capping rates on all bonds. This is nothing new, even for us, it's just a new fancy name. With the amount of debt we have the Fed has no choice but to put a ceiling on rates. At the moment, rates are staying down on their own so they have no need of yield ...