Kbg wrote: ↑Tue May 31, 2022 5:13 pm
Rhetorical Question; As regards the current performance given the economic climate, what asset is not true to expected form? Answer: None
You can claim you are finding out the PP doesn't suit you, but you cannot claim the PP isn't doing what it normally does. It just ain't so.
The asset that I would have expected to have performed better than it has YTD would be gold. The thesis is that in times of inflation, gold will perform enough to pull the load. In previous times of inflation that's exactly what it did. This time at best it has blunted losses. Better than nothing, but not as good as pulling the load and replacing or mostly replacing the gains lost from the other buckets.
As for the rest, we're into semantics. Yes, I will say the PP may not suit me, more than I would say it's broken in some way.
I can now definitively claim that from 2013-2021 the PP CAGR was 7.38% (lower than it's historical average BTW); and the same period return from the Total Stock Market index VTI was 16.27%.
The differential reflects the opportunity cost of the lower max drawdown of the PP (-11.98% vs -20.84%).
In my particular case I can say this is way too high an opportunity cost for that benefit. On a compounded basis, the performance differential is staggering.
EDIT: I appreciate the discussion, because I'm coming up on the 10 year anniversary of this portfolio at which time I need to make some decisions on what if anything to change.
BTW, being a believer in tech, my favorite index fund QQQ for 2013-2021 would have delivered a CAGR of 23.42% and a max drawdown of 16.96%. This year drops the max drawdown no doubt, but still to keep it comparable to the above stats, the difference is life changing versus the PP with not a whole lot more downward volatility.
Bottom line, I've learned what you already know, which is the conservatism of the Permanent Portfolio comes at a price.