Great topic. Food and data are not far behind home and auto for many people. I am shocked at how many people living on modest incomes carry smart phones with data plans and spend >$10/day on unhealthy lunches that they have to drive to purchase every day. I live in a home that is worth less than my ...

If you are a person who worries about an abrupt dollar collapse, a mortgage about the size of the long term bond and the cash portion of your PP could act as a kind of hedge, since the nominal value of the LB and cash parts could be used to convert nominal mortgage debt into real home equity. How i...

Love the logic! I put a high premium on paying off debt, since this is essentially a risk-free, tax-free, guaranteed return. Even the PP cannot boast those characteristics. Furthermore, even a year's supply of cash will not help much if you lose your job for an extended period of time and the bank o...

Interesting idea.  What country would you use? Like Clive, I would use index. But, in doing so, I bet that it would be impossible to construct something as safe and non-correlated at the single-country HB PP. For example, couldn't emerging market equities, bonds and currency tank at the same time? ...

This inflation vs deflation argument has been argued on this forum before. Could it be that both sides are right? For that which is financed through debt, particularly non-necessities such as mortgages and autos, there could be deflation because slack was taken out in the last decade of low interest...

That might have been the case in the past, but there is increasingly an argument that international emerging markets are decoupling from western markets. I am not 100 percent committed to my international exposure as I said earlier because i still don't know if I would have the guts to double down ...

Just have it sent to me, and I will "fabricate" the coins at a fraction of any price you are quoted!

In terms of the zigging and zagging I view international exposure as another class that zigs and zags independently of the other traditional 4 assets. I would imagine that it should smooth out the line more and potentially increase returns....especially if we were to get into the issue of economic ...

I am trying to add about 20 percent Intl exposure to the traditional 4 way PP... I tried to hedge against that with some international stocks, and zero coupon treasuries. I think 20-50% each from the stocks and bonds in the PP. By including international stocks and bonds in the PP, aren't you degra...

All lawns are an environmental negative. But hard to have good neighbors in suburbia if you are going to let your lawn follow its natural succession back into a prairie. So, to minimize herbicides, I use a spot sprayer only. Most hardware sprayers are inexpensive and fall apart within a year, but I ...

Depends on where you live and what banks are around, I suppose. Ideally, it would be nice to have the account in the other country. So, if anywhere close to Canada, I'd second MTs idea. Canada has an abundance of natural resources and a very sound banking system. If you had <$10K, it would not have ...

All wise words, MT. I have enjoyed this discussion. Thanks to all that have participated.

So... if you take 50% GDX and 50% EDV, starting on Jan 29, 2008, and you rebalance whenever one of the assets becomes twice the value of the other asset....these are the results (including dividends and rebalancing in Nov 2008, May 2009 and Dec 2010): Thanks! Amazing how you whipped this up. But......

As the volatility of GDXJ appears to be substantially greater than EDV, why would you prefer it to GDX in this intriguing variable portfolio idea? Good question for which I do not have an intelligent answer.  I was initially attracted to the junior miners because of their higher upside potential. H...

MT, I really enjoyed your last 2 postings, and I agree entirely. A lot of quotable material there, such as the "6,000 year secular bull market." Three questions: 1.  You have basically described a phenomenon of overshoot. Is this from the book you mentioned by William Catton? 2.  You menti...

You can't just choose random assets because some of them have shown negative correlation over one or two decades. Gold and Gold Mining Stocks do extremely well during inflationary conditions and Long Term Treasuries do extremely well during deflationary conditions. It would be difficult to find two...

In order to learn, Why choose specifically GDXJ and EDV? What other assets class are highly volatile and uncorrelated? regards Nothing particularly special about these 2 except that they are volatile, rather uncorrelated, and I was interested in GDXJ. In term of asset classes there are primarily th...

So you would basically treat it with the same respect as your PP.  ie, you believe in the underlying principles and are willing to hold it for a long time (even decades) to see it perform.  Yes. That's what I am planning. Do you think you'll put a fixed dollar amount in all at once, or do you plan ...

Debatable, I suppose, if looking exclusively at taxes and there is no tax-deferred option for any of the assets. However, if some of the 4 could be held in a tax-deferred account (e.g. TLT, SHY) and if some of the gold used for rebalancing were held in GTU or PHYS, then things could tip toward holdi...

Not to mention the benefits of holding assets more directly. Not a tax benefit, per se, but a benefit that should not be neglected. There could come a time in which "gold in the hand is worth two in the bush."

Please, what am I missing?  After a year all three end up at the same place.  How has the volatility helped? To add to Adams comment, in picking relatively non-corellated assets, it would be the exception rather than the rule that all are up or down at the same time. So EDV and GDXJ are picked beca...

You are way ahead of me, Adam. Thanks for the questions. In theory, I would stay in unless one of the asset classes did not look like it was a good long term bet or a good diversifier. In reality, this would be difficult to predict. I would probably get out of EDV if it looked imminent that the doll...

When all of the money is gone. It would be a long term bet on the days of economic prosperity being largely behind us (see discussion on population growth and peak oil).

The germ theory of medicine, the discovery of antibiotics, the discovery of fossil fuels and the green revolution in agriculture explains a lot of the population growth. Agree, but I'm guessing that most of the population growth has occurred in areas without access to good medicine. And the "g...

Thanks MT and Gumby. Your chart shows the wild ride with 2 volatile asset classes. My gut tells me that it might be best to have a cash reserve too, perhaps 20-25%, since there could be times when both primary asset classes drop, leaving me with little money to buy at the lows. So something like 40%...