What is your current portfolio?

General Discussion on the Permanent Portfolio Strategy

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Kbg
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Re: What is your current portfolio?

Post by Kbg » Fri Nov 01, 2019 9:05 am

jalanlong wrote:
Fri Nov 01, 2019 7:43 am
escafandro wrote:
Thu Oct 31, 2019 7:43 pm
40 Stocks
40 Long Bond
20 Gold
May I ask what drew you to that portfolio?
It’s a very good mix historically.
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Re: What is your current portfolio?

Post by escafandro » Fri Nov 01, 2019 8:57 pm

Kbg wrote:
Fri Nov 01, 2019 9:05 am
jalanlong wrote:
Fri Nov 01, 2019 7:43 am
escafandro wrote:
Thu Oct 31, 2019 7:43 pm
40 Stocks
40 Long Bond
20 Gold
May I ask what drew you to that portfolio?
It’s a very good mix historically.
Yes, that is the main reason.
As a foreigner from a peripheral country I cannot put together a local PP and I don't like the idea of ​​being overexposed to the dollar either.
Notice that I am quite improvised as an investor so my reasoning surely has some flaw, but I think that the PP has a low correlation to the dollar. Not always but in general my currency moves in positive correlation to gold.
Thereby when the dollar strengthens in my country my portfolio is probably going down and vice versa.
So I like this portfolio for its return prospects and for the correlation it has regarding the dollar and gold (a little softer in both cases than the PP and a little less reactive to exchange rate variation).
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Re: What is your current portfolio?

Post by tarentola » Wed Nov 13, 2019 8:39 am

I am in the Eurozone. Retired, so even my VP (20% of total) is pretty conservative.

1. PP 4x25%
Stocks
50% individual Euro dividend shares (Sanofi, Vinci, Red Electrica, Renault, Air Liquide etc)
25% German Dax ETF (DAX from Lyxor)
12.5% each Nasdaq and Emerging Markets ETFs (ANX and AEEM from Amundi)

Bonds
About 50-50 long and medium Euro bond ETFs (MTH and MTD from Lyxor)

Gold
ETF (GBS from ETFS)

Cash
Mostly just cash, with some in a short 3-5y bond ETF (MTB from Lyxor)

2. VP
About 30 individual dividend shares, One-third sterling and Euro, two-thirds USA.
40% defensive sectors (consumer staples, utilities), 30% cyclic (materials, consumer discretionary), 30% other (energy, industry)
Includes Shell, Unilever, Volkswagen, Macdonalds, Procter and Gamble, Realty Income and other popular shares.


The PP is a bit complicated but this is partly for historical reasons: I had the Euro shares and some bond funds already and did not want to sell everything and start again. Not much dollar exposure in the PP, as there is plenty in the VP.

The VP yields just under 4% and is something of an experiment. When the next crash comes, I would hope that the dividend stream remains relatively unchanged even if the capital value goes down.

If I had my time over again, or if I decide to simplify matters, I would probably go for a PP with 40-40-20% Euro, US and Em Mkts, one long bond fund, one gold ETF such as SGOL, and cash on deposit and in some short bonds.
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Re: What is your current portfolio?

Post by fireplan » Thu Nov 14, 2019 6:09 am

Long time lurker here, first time poster. While I started following Harry Browne's work more than 20 years, I have never held a strictly PP portfolio, but have nevertheless been strongly influenced by it. I try to diversify not just across asset classes, but also across strategies, to hopefully get a better risk adjusted return and higher perpetual withdrawal rate (PWR). I retired 3 years ago at the age of 40, so having a high theoretical PWR, but only utilizing some of it, is my goal to safeguard my (hopefully) long retirement period.

My overall portfolio is broken up into a few different buckets:

1. Core allocation in taxable account (about 45% of total assets)
- 20% VTI
- 20% VBR
- 20% GLDM
- 20% VGLT
- 20% VNQ
This is a GB inspired allocation, but with with real estate subbed info for cash. According to PortfolioCharts, this allocation has a higher PWR than all the other portfolios, and higher baseline short-term and long-term return averages. Obviously, without the cash, it will have higher volatility, but the higher return is enough to boost the PWR despite the increased volatility.

2. Tactical allocation in taxable account (about 20% of total assets).
This bucket follows Stoken’s Active Combined Asset Strategy (https://allocatesmartly.com/stokens-act ... -strategy/), which trades the same asset classes as above (except VBR), but buys and sells based on price channels. I like this tactical strategy because it reduces drawdowns (which are PWR killers) and volatility, while achieving a higher average return compared to buy-and-hold of the same assets. It is less tax efficient than buy-and-hold, but most taxable events are either LT cap gains, or ST losses.

Buckets 1 and 2 together have a backtested worst-case PWR of 6.3% and a real CAGR of 7.5%, but I'm targeting an actual withdraw rate closer to 4% for the next 10 years to reduce sequence of return risk.

3. IRA accounts (about 20% of total assets).
This bucket uses a combination of various strategies from https://allocatesmartly.com that have a low correlation to the core allocation and to each other, which hopefully reduces overall portfolio volatility. Since this happens in an IRA, there is no tax-drag from frequent (bi-monthly) allocation changes.

4. Private Real Estate investing (about 6% of total)
I'm unsure if this bucket is a useful diversifier or an unnecessary risky play.

5. Cash (current about 4% of total)
I keep about 1 year's worth of expenses (rather than a fixed % of the portfolio), mostly in VUSXX.

6. Other: HSA, 529, etc.
These small accounts are typically restricted in assets and trading, so they are mostly just balanced equity/bond funds.

If I ever get sick of the tactical stuff, or determine that it really doesn't add any value, then I have a fallback plan to just simplify as much as possible down to the Core portfolio allocation.

--FirePlan
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Re: What is your current portfolio?

Post by InsuranceGuy » Thu Nov 14, 2019 8:07 am

fireplan wrote:
Thu Nov 14, 2019 6:09 am
Long time lurker here, first time poster. While I started following Harry Browne's work more than 20 years, I have never held a strictly PP portfolio, but have nevertheless been strongly influenced by it. I try to diversify not just across asset classes, but also across strategies, to hopefully get a better risk adjusted return and higher perpetual withdrawal rate (PWR). I retired 3 years ago at the age of 40, so having a high theoretical PWR, but only utilizing some of it, is my goal to safeguard my (hopefully) long retirement period.
Welcome and congrats on retiring young! Looks like a well thought out portfolio.
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drumminj
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Re: What is your current portfolio?

Post by drumminj » Thu Nov 14, 2019 8:45 am

fireplan wrote:
Thu Nov 14, 2019 6:09 am
My overall portfolio is broken up into a few different buckets:
Welcome! I'm curious, how much effort goes into maintaining all of this? One of the nice things about the HBPP is it's incredibly low-maintenance.

How much time do you spend maintaining your allocations in a given month?
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Re: What is your current portfolio?

Post by fireplan » Thu Nov 14, 2019 10:46 am

drumminj wrote:
Thu Nov 14, 2019 8:45 am
fireplan wrote:
Thu Nov 14, 2019 6:09 am
My overall portfolio is broken up into a few different buckets:
Welcome! I'm curious, how much effort goes into maintaining all of this? One of the nice things about the HBPP is it's incredibly low-maintenance.

How much time do you spend maintaining your allocations in a given month?
Since I'm following the trade signals from AllocateSmartly for the tactical buckets, it literally only takes about 10 minutes, twice a month, to enter the trades. Everything else is passive.

However, I'm horrible at just stepping back and trusting things to run their course, and I spend way too much time thinking about, researching, and testing out asset allocations, tactical strategies, rebalancing strategies, drawdown strategies, market conditions, etc. That is a downside to not working full time anymore: too much time to think about these things! Fortunately, my usual conclusion after exploring some new idea is to just do nothing.
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Smith1776
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Re: What is your current portfolio?

Post by Smith1776 » Thu Nov 14, 2019 12:33 pm

Current allocation, which I'm HOPING is now permanent -- it is the permanent portfolio after all, right? ;D :o

Digital PP:

25% T-bills
25% Long term government bonds
15% Gold
5% Silver
5% Total world market cap weight equity
5% Global value fund
5% Canadian SCV
5% U.S. SCV
5% International SCV
5% Emerging market SCV

Physical portion:
Gold and silver coins at 5% of the value of the digital part of the PP
Early to bed and early to rise makes a man healthy, wealthy, and wise.
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InsuranceGuy
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Re: What is your current portfolio?

Post by InsuranceGuy » Thu Nov 14, 2019 7:37 pm

fireplan wrote:
Thu Nov 14, 2019 10:46 am
However, I'm horrible at just stepping back and trusting things to run their course, and I spend way too much time thinking about, researching, and testing out asset allocations, tactical strategies, rebalancing strategies, drawdown strategies, market conditions, etc. That is a downside to not working full time anymore: too much time to think about these things! Fortunately, my usual conclusion after exploring some new idea is to just do nothing.
Join the club!! Investing is just too fascinating!
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Kbg
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Re: What is your current portfolio?

Post by Kbg » Fri Nov 15, 2019 9:50 am

The very first investing book I ever read was the Intelligent Investor by Benjamin Graham, Buffet’s mentor, which has a section IIRC correctly concerning someone who just doesn’t want to get into value investing/do the work etc. For this kind of investor he recommended a 50/50 stock/bond portfolio...I can absolutely say if I would have just done this and stuck with it I’d be way better off than I am. I have pondered this fact many times.

This stuff IS fascinating which may be part of the problem...
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Re: What is your current portfolio?

Post by mathjak107 » Sat Nov 23, 2019 4:23 am

Since i am still holding all components of the pp i did a quick analysis of what my total portfolio's looks like .

the pp is the traditional 25% in each . so that is easy

the growth and income model consists of a combo of the 100% equity fidelity insight sector model coupled with the larry swedroe total bond portfolio which consists of 8 different bond etf's covering all segments of the bond market . kind of like the pp of bonds . it has 8 etf's that respond well to rising rates and rising inflation , they have others that respond to a weak dollar and some behave more conventionally . it holds everything from gov't bonds , to foreign bonds , both inflation protected and conventional .

as a whole that growth and income model model is 45% equities 52% bonds 3% cash

if i put both portfolios together they work out to 37% stock 41% bond 5% cash 18% gold

i have quite a bit of cash from some recent real estate sales so if i combine all models with the cash pile , including the cash in the pp model it looks like 27% equities 30% bonds 29% cash 13% gold .

so cash can be very variable as far as how to count it and the reason for having it and whether it is an active part of the portfolio with a specific job to do and whether or not it needs to be there . we may very well become snow birds and buy something down south so we don't count cash holdings in any portfolio except the pp since it is as active designed in component as the bonds and equities are . we can't put the pp cash in to a house as an example ..
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Re: What is your current portfolio?

Post by ochotona » Tue Dec 03, 2019 7:37 pm

Currently have:

Equity 21% and most of that is an ex-US dividend ETF, DWX... a dividend-oriented Dual Momentum portfolio
Aggregate bonds 7% in retirement plans... poor choices, can't escape, you know how that goes
One of Paul Novell's tactical bond portfolios BONDCOMP 30%
Gold and miners 12%
Cash and ST Treasuries shorter than 2 years 30%, will push it all into Roth and I-Bonds over the next 5 years

PP "influenced". When this all goes risk-off, the above is going to morph into basically a PP with a small slice of equities, because BONDCOMP and DWX will go to IEF & SPTL.
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