It seems to me that with any long-term investment strategy, following short-term trends too closely makes it harder to stay with your strategy. If you understand the volatility of the portfolio you've chosen, and are ok with that, then under a wide range of "normal" conditions, you should ...

That makes sense, Fred.

Is this really a PP though?  The even split between the asset classes seems to be a major feature of the idea.

It seems extremely counter-intuitive that a very cash heavy portfolio would be the best way to beat inflation.

Ok, so it looks like it started with high oil prices.  But, again, when prices go up, if people don't have a lot of money, they'll adjust their spending habits (although lots of stuff uses/needs energy).  So maybe people bought a lot less, and that pushed the economy downwards, And, then, because we...

Right, that's what I'm trying to understand - why that didn't happen, when it seems like the most likely/common sense outcome. And I wasn't arguing that the government should be able to fix the problem, in fact given the limited tools the Fed uses, it seems like a hard problem for them to deal with ...

Well, that's where I started. Individually, people will generally have less income to spend (and be worried about the economy and their job), and so they won't be able to afford higher prices (or just tighten up spending due to fear).  Then businesses will either lower their prices, reducing inflati...

I'm still not quite understanding it.

Maybe it's just too complex for me to wrap my head around.

Right, that's why I'm asking, sophie. I'm trying to figure what sort of risk is involved from this point on with a stock/bond portfolio, in a general sort of way. Not sure that government policies created stagflation, but I do think that they (especially the Fed) aren't particularly effective at dea...

Also, there was a law passed during the Bush II administration that prohibited the government from negotiating with drug companies.

So, whereas before, as a large buyer (Medicare), it could have negotiated prices downward, since then it can't do that.

Sure, that makes sense. But, government policy wouldn't be aimed at producing/extending stagflation, since it sucks.  Fed policy has the dual mandate of unemployment/inflation - it wants to create conditions for higher employment and also control inflation. Stagflation would sort of be the opposite ...

Well, that's only feasible for a small minority of the population. One can live in this country and question the cultural biases/pressures.  It takes being mindful and aware of them and how they affect us, and talking about it with children. Analyzing and understanding how advertising works and why ...

I understand hyperinflation as another extreme economic condition.  But it doesn't explain why normal market forces wouldn't affect stagflation. And, that's sort of what I thought, that it would be very unusual, because of market forces.  And also that we might have learned from past mistakes about ...

I wonder if you can help me understand something.  It seems that when stocks and bonds (especially ltg bonds) both do badly the culprit is "stagflation", which I take to mean a combination of a poor economy with high inflation. What I don't get is how that can persist for very long - infla...

There was a study by some brokerage house showing that their clients had done best who had forgotten about their portfolio (some had even died). I'm very aware of the ways in which it's hard for people to stick to a strategy, given fluctuations in the markets and understandable psychological tendenc...

Well, the kld index etf performs virtually identically to vstmx in my idea.

The portfolio loses a little less in 2008, and has a slightly smaller max DD, and gets a very slightly lower cagr.

But it's probably a bit less risky as well.

Definitely worth considering - I appreciate your input.

Those are interesting - thanks for that. I'll definitely look into them, especially the KLD400 index fund.  But, it's been around for an even shorter time than PARWX, and PARWX has beaten it every year except one.  I already checked the tax stuff, and it's a non issue for us. I've done a fair amount...

That's interesting - I'm not sure I'd agree that it's just human nature to be greedy. It does seem to be a major factor in this country, and it's sort of supported/promoted by our culture.  As far as systemic changes, the Taft-Hartley Act seems to have been a strong cause of the decline of unions, w...

I'd say greed and the diversion of gains to those at the top are a major factor. The average CEO in the 50's made about 30-50x an average employee, and today they make about 200x as much. If there were an index fund with lower costs that tracked the best companies to work for, that would be interest...

I'm sure that's true, and it would definitely be a concern. And, yes, you're right about the secondary market in that way - the thing I like about PARWX is that I'd be benefiting from companies that offer "outstanding workplaces", rather than ones that s***w their employees to do well.  I'...

Thanks for looking at it sophie. You could be right that the tech sector has done well for the reasons you give, of course.  I'm not good at analyzing things like that.  But if you look at the annual returns, they follow the general trend of the total market, just a bit better here and there, and th...

Thanks - I appreciate that. Being risk/loss averse as I am, any investment strategy makes me a bit nervous.  That's why I wouldn't use it for meeting any financial needs, just for fun.  One idea I've had is to donate gains in the portfolio to charities - the easy way to do that would be to take any ...

Maybe I should make that my forum name  :D Thanks - it's not a big deal for me, since I'm not even invested in my idea yet.  We just got an IRA out of all markets and into a money market, and will do the same with our other smaller one, as we're about a year out from retirement. It's been fun resear...

Maybe that's it.

I also found his comments odd, and generally missing the point of the PP.

I understand that - I was just saying that PARWX looks like a good substitute for VTSAX to me, and matches HB's original idea for the stock part of the PP.  In my earlier posts, I called my idea a "boglehead/PP" hybrid - it uses the simple two fund approach of bogleheads, with the PP idea ...