Yes, I watched that one too That video is what originally sent me down the rabbit hole.Hal wrote: ↑Wed Jul 01, 2020 5:13 pmHave a look at Belangp's video on taxation and rebalancing....ahhrunforthehills wrote: ↑Wed Jul 01, 2020 3:08 pm@ volcker
I have been wondering this recently as well (in fact, I had a very similar post the same day as you in a different thread).
Someone else pointed out that this guy did an analysis and found that adding bonds to a stock/gold mix reduced your overall risk very little, but at the expense of massive performance: https://www.youtube.com/watch?v=LA2Yr6NoZyA (around 5:05 is where he gives his opinion).
His ideal allocation is 65% stock and 35% gold. In other videos he commented that anything more than 35% and your risk adjusted reward starts to really go down the crapper.
People may say "... but treasuries can go negative!" This MIGHT be true, but in that environment many investors will begin pouring into gold as an alternative store of wealth.
Also, are we talking about taxable accounts or non-taxable accounts? It might be true that the magic of the PP is rebalancing, but I recently started thinking that magic becomes a curse in a taxable account.
I ran the comparisons through portfoliocharts, the simba spreadsheet, portfoliovisualizer, etc. 62.% stock, 32.5% gold, and 5% t-bills seems to be pretty hard to argue against (especially if you are talking about After Tax/After Inflation returns).
If we are talking about Physical Gold, your tax rate will be fully dependent on your income. Your income will be determined by how many fixed income investments you have (i.e. Bonds). If you only owned stocks and gold, you would not have any income. Therefore, your tax rate for selling gold would be insanely low.
Edit: Your previous post (saying that you were not from the US) came as I was typing mine, so the tax benefit I mentioned might not apply to you. However, depending on your country, holding gold would obviously come with other benefits that paper assets do not have.
@ 10:45: "All of this is the benefit of the negative correlation between stock and gold becoming more strongly negative over longer holding times [based on the last 5 decades worth of data]"
This is what I noticed on portfoliocharts as well. It seems to even outperform the PP in a Japan environment with just a little more volatility in the earlier years.
For those looking for a Perpetual Withdrawal Rate it seems like a really good allocation.