Search found 145 matches

by europeanwizard
Thu Jun 29, 2017 1:27 pm
Forum: Bonds
Topic: Why do bonds with low yields provide less insurance?
Replies: 11
Views: 5643

Re: Why do bonds with low yields provide less insurance?

A bond's price moves inversely to its yield. So if the yield is extremely low, there's a low ceiling to how high the value of the bond can get. So, the low-yielding bonds are a bad hedge for stocks, because the bond price can only get so high? When stock prices would crash, where would investors th...
by europeanwizard
Thu Jun 29, 2017 8:15 am
Forum: Bonds
Topic: Why do bonds with low yields provide less insurance?
Replies: 11
Views: 5643

Why do bonds with low yields provide less insurance?

So suppose I keep the usual 25% in my portfolio. I live in The Netherlands, so I buy the following, because that's the bond with the longest maturity date that my broker offers. NL0000102234 NL 4.00% 2037/01/15 From what I understand, I now run the interest rate risk. This is clear and acceptable to...
by europeanwizard
Thu Jun 29, 2017 5:46 am
Forum: Permanent Portfolio Discussion
Topic: Don't Understand Silver Bullion
Replies: 12
Views: 5873

Re: Don't Understand Silver Bullion

dualstow wrote:I loved your post!
Amen.
by europeanwizard
Sun Jun 25, 2017 9:59 am
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

LTT interest rate risk is hedged most directly by the T-BILLS portion of the PP. OK, I have to let this sink in for a bit. For some reason, to me the bonds part turns out to be the most difficult to comprehend. Did not expect this! I've decided that I just need to start playing with this. So I plac...
by europeanwizard
Sun Jun 25, 2017 9:48 am
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

Similarly for cash I would use Dutch short term bills/bonds. Rates are negative -0.6% but that is an insurance against bank failures. Apparently the market thinks this risk is high. Physical gold storage costs more than that. Thanks for this tip, and the rest of the comment. For some reason, my bro...
by europeanwizard
Sat Jun 24, 2017 10:32 am
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

Your rational, logical, legitimate fear of long-term European sovereign debt instruments isn't actually a fear about BONDS the fear that you are expressing in your posts does not strike me as the fear of someone who is merely afraid that LTT will be a losing asset (you seem to accept that this is h...
by europeanwizard
Sat Jun 24, 2017 10:21 am
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

From the context, it seems to me that Craig was concerned about interest rate risk related to the duration of the bonds, rather than about their Euro origin. Thanks for pointing that out. So I did some reading elsewhere, and re-read the topic where Craig and MachineGhost were commenting. And it see...
by europeanwizard
Fri Jun 23, 2017 2:28 pm
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

Just a quick note; reading through the comments, I realized I'm missing some fundamentals here. I'm going to do some reading before replying, but just wanted to pop in and say I'm very grateful for the responses! :)
by europeanwizard
Wed Jun 21, 2017 1:01 pm
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

If it wasn't LTT that you were worrying about, it would be one of the other core PP asset classes. I have no problem buying gold when its price is going down. After all, it's part of the plan. I do have severe doubts when Craig says that he wouldn't buy European bonds. Now you may simply say: no ma...
by europeanwizard
Wed Jun 21, 2017 12:56 pm
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

tarentola wrote:For comparison, my own Euro PP results over the last four years:
So what do you use for the bonds part?
by europeanwizard
Tue Jun 20, 2017 4:55 am
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

I'd just go with something simple like 40% IEGA But how does that fix my (and other people's) worries about the low yield of long-bonds and its associated risks? What happens to this allocation if the euro appreciates for example a 20% to the level where it was just 3 years ago? 3 of the 4 assets h...
by europeanwizard
Fri Jun 16, 2017 2:01 pm
Forum: Permanent Portfolio Discussion
Topic: Starting EU PP, doubts about the bonds part
Replies: 60
Views: 26904

Re: Starting EU PP, doubts about the bonds part

Some good points about the Euro PP history -- however the question remains: should I get into bonds at this point. The topic from October 2016 had a general consensus that I shoudn't, and that sentiment is repeated here. So, I've been re-reading that older topic, and here is a possible alternative: ...