I hope everyone stayed cool and rode things out with some smart re-balancing. It's nice to have a portfolio that doesn't make you panic and do dumb things in a market crash.
YTD and 3yr. charts show the PP is smashing a 60/40 index. Low volatility allows re-balancing into the storm without sweating at night. Solid investing is often more about managing emotions rather than high returns. An investor that can keep their cool will come out on top in the long-run. Low volatility investing like the PP proves its mettle once again.
This month has been incredible for PP owners. But even before this, it was remarkably easy to be a PP investor. During all the market panics this spring & summer, I've been completely unconcerned with how the markets were doing, except that I wanted to make sure I didn't miss a rebalance opportunity.
Thank you Craig and everyone else who introduced us to this wonderful portfolio!
Hi Craig! Thank you again for your site and book.
YTD results are even better than shown on ETF Replay due to an opportunistic rebalance during the crash . PP is feeling pretty bulletproof.
mukramesh wrote: ↑Fri Jul 31, 2020 12:46 pm
Hi Craig! Thank you again for your site and book.
YTD results are even better than shown on ETF Replay due to an opportunistic rebalance during the crash . PP is feeling pretty bulletproof.
Interesting point both you and Sophie make about "opportunistic rebalancing". I've heard Craig speak of "mechanical rebalancing" which I took to mean sticking closely to the bands and only rebalancing when they are triggered. I think HB even went so far as to suggest only doing it once per year.
I'm actually tempted to sell off some Gold and Bonds right now since both are at all high times but isn't this just another form of "timing the market".
I didn't "opportunistically" rebalance. I did it when I crossed a band. I was watching for when that happened using a google sheet I designed to give the indication, without my having to actually check my portfolio. I remember being a little disappointed though, that I didn't rebalance when stocks hit their low point, as some people here did. However, I would have been rebalancing out of cash into stocks, whereas my rebalance involved moving money from cash and bonds (primarily) and a bit out of gold. In the end I don't think it made a lot of difference.
I'm nowhere near crossing any band right now, so sitting tight as per plan.
By opportunistic rebalancing, I meant I hit a rebalancing band (15/35) during the crash for stocks on the low side since they crashed so harshly (almost -35%). Completely mechanical but it requires paying attention to your portfolio balances, especially during times of high volatility. No market timing here but I definitely got lucky
I would not sell any Gold or Bonds unless it is part of your mechanical rebalancing plan.
@Sophie: That is exactly what I did, Re: watching my Google sheet daily.
I've been in the PP for about 12 years now and I have never hit a re-balancing band. Not even close as far I can remember. I have both re-balanced and let things ride during my yearly checkup however and it would take too much effort on my part to figure out which was the best strategy. And if I did what would be the point? There are no constraints in place requiring the future to behave the same way it has in the past as far as I know.
I hope everyone stayed cool and rode things out with some smart re-balancing. It's nice to have a portfolio that doesn't make you panic and do dumb things in a market crash.
YTD and 3yr. charts show the PP is smashing a 60/40 index. Low volatility allows re-balancing into the storm without sweating at night. Solid investing is often more about managing emotions rather than high returns. An investor that can keep their cool will come out on top in the long-run. Low volatility investing like the PP proves its mettle once again.
Hope all are well!
Craig, I hope you're doing well and that your business is flourishing.
I'm holding steady with the PP thanks to the work of you and Tex!
sophie wrote: ↑Fri Jul 31, 2020 2:10 pm
I didn't "opportunistically" rebalance. I did it when I crossed a band. I was watching for when that happened using a google sheet I designed to give the indication, without my having to actually check my portfolio. I remember being a little disappointed though, that I didn't rebalance when stocks hit their low point, as some people here did. However, I would have been rebalancing out of cash into stocks, whereas my rebalance involved moving money from cash and bonds (primarily) and a bit out of gold. In the end I don't think it made a lot of difference.
I'm nowhere near crossing any band right now, so sitting tight as per plan.
What bands do you use?
STAT PERPETUS PORTFOLIO DUM VOLVITUR ORBIS
Amazon: Investing Equanimity: The Logic & Wisdom of the Permanent Portfolio
I'm a hair's breadth away from hitting 35% gold, I am leaning towards cutting back on luxury purchases so that I can contribute more to the lagging assets until my current contract expires in a few months. But it's not a bad problem to have.
Kriegsspiel wrote: ↑Sat Aug 01, 2020 11:36 am
I'm a hair's breadth away from hitting 35% gold, I am leaning towards cutting back on luxury purchases so that I can contribute more to the lagging assets until my current contract expires in a few months. But it's not a bad problem to have.
Taxable or tax-deferred accounts?
Selling Gold in taxable is a tough pill to swallow.
Kriegsspiel wrote: ↑Sat Aug 01, 2020 11:36 am
I'm a hair's breadth away from hitting 35% gold, I am leaning towards cutting back on luxury purchases so that I can contribute more to the lagging assets until my current contract expires in a few months. But it's not a bad problem to have.
Taxable or tax-deferred accounts?
Selling Gold in taxable is a tough pill to swallow.
Taxable. Now, in my case it isn't that big of a deal because I can sell some high cost-basis coins, so the tax bill isn't that bad at all. That's before any IRA or HSA contributions, too.
. PP is feeling pretty bulletproof.
