Rebalancing advice needed

General Discussion on the Permanent Portfolio Strategy

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dockinGA
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Re: Rebalancing advice needed

Post by dockinGA » Sun May 15, 2022 11:49 am

ahhrunforthehills wrote:
Sun May 15, 2022 10:41 am
Kevin K. wrote:
Sun May 15, 2022 10:08 am
I agree it's never going to be the worst option but I think it's wise to look at how to build a better bunker.
Lots of great input Kevin. I appreciate seeing your well thought-out posts.
dockinGA wrote:
Sun May 15, 2022 5:42 am

We consider it a decent investment philosophy/allocation that will never be the best performing, or the worst performing, and that once we've made the decision to invest in the PP (no matter the reason)

As you mention above, it is a philosophy. Enjoy life. Don't stress about investments and don't waste time in your life thinking about it. It is a passive lazy portfolio.

When looked at through that lens, it is a pretty good methodology.

dockinGA wrote:
Sun May 15, 2022 5:42 am

making changes is only performance chasing and is likely to end up worse than just riding it out with the PP.

100% Disagree. This idea that if you are NOT in a PP that you are “performance chasing” is nonsense. There is no way that factors like taxation, macro-economic, estate size, etc. can possibly allow a general cookie-cutter approach that is supposedly applicable to everybody would be the most effective from a risk/reward approach.

Here is a really bad example. Let's say your kids in NY sometime stay home because of snow days. Let's say you need to call off work because of that. It is stressful for you. You need to hedge your loss of income so you pay to have a babysitter on standby. Don't stress, The old lady down the street agrees to be on standby for $5/day. Done. You now have stability. You now won't have the stress... unless you start overthinking it.

This is the problem with the PP. Overthinking it.

The PP is designed for you to stop thinking about it. Looking at it too closely makes you realize the protection it offers is subpar.

The reality is that the probabilities of a snow day occurring in specific months is different. Frankly, someone in a PP is much more likely to do more worse than me. But again, I am incorporating investing into my life (where a PP follower is supposed to forget about their investments). I am taking into consideration my own personal needs of tax, estate, interest rates, geopolitics, etc. which the PP completely ignores.

None of this is meant to bash the PP. However, the OP seems to have his butt on 2 different chairs. IMHO, he first needs to pick which one he wants since his problems would not be sufficiently addressed by a simple VP addon.
My comment regarding making changes being performance chasing was meant as a comment on someone who jumps into the PP after a market crash, then jumps out and/or heavily modifies it at some point in the future. Sorry for the confusion. I'm not saying the PP is the standard bearer and all other portfolios are just performance chasing. ALL portfolios will go through ups and downs, and if you jump in at the relative top and jump out at the relative bottom (which is very easy to do with contrarian portfolios), that's performance chasing.
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