So, if Im not comfortable with a 20% drawdown, what should I do today, tomorrow, a week, year or decade from now? Become an active manager and adjust allocations based on perceived economic conditions? Seems like a recipe for disaster to me and the reason why an established allocation was so attrac...

I recently implemented a "pure" 4X25 PP in one of my accounts and I'll be happy to watch it work, but I'm hesitating to do so in a larger account.  Here's why.  After some backtesting covering a 40-year period, I find that a portfolio of 65% Vanguard Wellesley, 10% long treasuries, 10% sh...

I have never owned the zeros because of the bid/ask spread (they might still be fine I am just not an expert). However, I agree that the barbell has some significant tax advantages over the bullet because one can put the long bond in the tax deferred account (because long bonds generally have a hig...

Also, just to make it clear.... Barbells do better in a rising rate environment than a bullet portfolio of the same duration. You might want to have a bullet bond portfolio for expected return reasons, but to do so because of fear of rising rates isn't quite appropriate. http://en.wikipedia.org/wik...

Very interesting. Looks like a lot of rebalancing into cash (and gold for that matter) over the last 30 years. Competing portfolio advocates claim the increased adoption of the PP to be a case of recency bias as gold has risen quickly since the mid-2000's. But I guess that depends on your definition...

Bogle and Browne both advocate a variable portfolio for a reason - on days like today, when co-workers are watching CNBC and counting down the points to an all time DOW high and their model portfolio is underperforming. I, on the other hand am content as I maintain both a 60/40 and PP. It must be d...

Not sure but I may do some tax lost harvesting here and switch from GLD to IAU in case we're bottoming.

Mortgage + Hyperinflation = Lot's of problems, hope you have portable wealth. Hyperinflation is not pleasant. If you had very little equity in the home to begin with you're not out much. If you can protect it and ride it out and had a big mortgage wiped out then congrats you're not in bad shape, yo...

This is how I feel and I think many people in the coming days/weeks will go running into equities after having missed all or most of this insane run up.  It won't end well for these people, IMO. Well, it probably won't end much differently for these people any more than it would those that get into...

I-bonds and/or TIPS in a tax-advantaged account, that's how a Boglehead would respond.

Seems about right, TLH holds a slightly longer duration mix of bonds than a TLT/SHY barbell hence the slightly larger gain. That's a pretty simplistic way of looking at it but it's about right.

How about reconstructing the PP w/ TIPS instead of gold, using 5-yr treasuries, and SCV instead of TSM. Still have your government guaranteed inflation protection, the equivalent of a STT/LTT bond ladder, and a slightly more volatile stock proponent. 25% SCV 50% 5-year treasuries 25% TIPS 1975-2011:...

Here are the effective durations of the ishares treasury funds: TLT: 16.82 TLH: 9.97 IEF: 7.41 IEI: 4.39 SHY: 1.81 SHV: 0.39 TLT/SHY combined: 9.32 Whipped up the following scenarios w/ etfreplay.com, the numbers are %'s, PP means traditional TLT/SHY mix, the others assume holding 50% of the bond fu...

I fail to see how buying an intermediate bond fund with duration equal to a cash/LTT barbell will have any long term negative effects on the PP. If anything putting 25% in cash and 25% in LTT is the "simple" choice (mentally) because it promotes the idea that there are 2 separate economic...

I fail to see how buying an intermediate bond fund with duration equal to a cash/LTT barbell will have any long term negative effects on the PP. If anything putting 25% in cash and 25% in LTT is the "simple" choice (mentally) because it promotes the idea that there are 2 separate economic ...

Hello, I am hoping that the experienced users here at the blog will help me make sure I understand the Permanent Portfolio (PP) and provide answers to a few questions.  I read Fail-Safe Investing and have been reading this blog, threads at the Bogleheads forum, and other websites such as madmoneyma...

What if you have very limited tax advantaged space? Does a barbell make more sense in that you'd put long duration bonds into tax advantaged and shorter duration in taxable? I'm in this boat and I'm considering doing something as long as possible like EDV in my tax advantaged space and balancing it ...

That's a good point regarding 100% SCV. I've read through the Bogleheads forum at length and I think they believe there have been too many periods where bonds outperform stocks to guarantee a 100% stock portfolio will always provide a higher returns. Or maybe it's just that over time a 60/40 portfol...

Interesting that the 60/40 split is so sacrosanct that they'd recommend leverage on the bonds rather than just changing the percentage to get the balance they want. For some reason many people don't seem to understand that not all bond portfolios are created equal.  Most 60/40 bond portfolios use c...

MediumTex wrote: PP up .59% today.

Anyone see the pattern here?

Take gold out of the equation the past few days and we all have a lot less gray hair? I kid, of course.

I was wondering if anyone has any thoughts on replicating the PP using futures? PROS: You could lever-up easily if you wanted to take on more risk.  As long as one is sensible I don't see leverage as a problem per se. You could sell calls against the position to boost returns, fairly deep to avoid ...

Wellesley: 2007: 5.19% 2008: (12.58%) 2009: 14.05% 2010: 10.36% 2011: 8.94% Avg. for 2007-2011 timeframe: 5.19% *** Permanent Portfolio: 2007: 13.3% 2008: (.7%) 2009: 10.5% 2010: 14.5% 2011: 10.5% Avg. for 2007-2011 timeframe: 9.62% *** Wellesley is a great fund, but it's not built for all economic...

Vanguard Wellesley is close to 60% bonds and 40% stocks and it lost about 10% in 2008. I just don't like exposure to losses of that size.  I can't deal with them.  I get too freaked out.  I can't think clearly and I start making bad decisions. Up to this point the PP has avoided those sized losses,...

Nothing wrong with splitting your assets amongst different portfolios, one for each of your investing personalities, and I don't mean that to be insulting. I'm probably going to do the same myself. Maybe half and half with a PP and a combo of Vanguard funds like Wellington and Wellesley. They invest...

In my experience, the portfolio grinds upward for a period of time and then the gains are quickly erased in a matter of days... As long as the net result is positive, does this matter? That's how the stock market tends to behave. Long periods of low volatility upward grinding followed by short peri...