Permanent Portfolio in Europe (follow-up)

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frugal
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Wed Oct 18, 2017 1:01 pm

tarentola wrote:
4,3% and what about inflation?
It does not beat official inflation by much, and perhaps does not beat real inflation at all. But multiple-year periods of underperformance are not unusual.
Do you think to change to a more aggressive lazy portfolio?
Such as...? If you have a concrete suggestion and some evidence that it works or has worked, I would be delighted to know about it. I have backtested or consulted portfoliocharts.com for quite a few variants but cannot find anything that beats the PP for reasonable returns and limited drawdowns.

The poor 2017 Euro performance of the US and UK dividend share portfolio is largely due (I hope) to the dollar's having lost 12% of its value relative to the Euro since 1 Jan, while the pound lost 4%.
Hi

are you going to ER?

MMM has 100% on stocks :-)
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Re: Permanent Portfolio in Europe (follow-up)

Post by WhiteElephant » Tue Feb 13, 2018 3:34 am

Small update on my EU-PP. Been invested in the PP for almost a year now and still very happy with it.

Made two small changes:
I've replaced Lyxor EuroMTS 15y+ (LYXF) with iShares € Govt Bond 20yr Target Duration (E20Y).
E20Y uses higher quality bonds (No bonds from Spain/Italy) and has a higher duration of 19 years.
I expect this to bring the volatility of my bonds closer to stocks and gold.

Another small change I've made is adding a small allocation to the MSCI World Index within my stock allocation.
I like the extra diversification but I'm hesitant to add too much currency risk to my portfolio.

Updated portfolio:
20% SPDR® MSCI EMU
5% iShares Core MSCI World
25% ETFS Physical Swiss Gold
25% iShares € Govt Bond 20yr Target Duration
25% Savings account
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Tue Feb 13, 2018 1:02 pm

WhiteElephant wrote:Small update on my EU-PP. Been invested in the PP for almost a year now and still very happy with it.

Made two small changes:
I've replaced Lyxor EuroMTS 15y+ (LYXF) with iShares € Govt Bond 20yr Target Duration (E20Y).
E20Y uses higher quality bonds (No bonds from Spain/Italy) and has a higher duration of 19 years.
I expect this to bring the volatility of my bonds closer to stocks and gold.

Another small change I've made is adding a small allocation to the MSCI World Index within my stock allocation.
I like the extra diversification but I'm hesitant to add too much currency risk to my portfolio.

Updated portfolio:
20% SPDR® MSCI EMU
5% iShares Core MSCI World
25% ETFS Physical Swiss Gold
25% iShares € Govt Bond 20yr Target Duration
25% Savings account
Nice!

Why savings account and not short term bonds?

regards
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Re: Permanent Portfolio in Europe (follow-up)

Post by WhiteElephant » Tue Feb 13, 2018 2:43 pm

My online savings account still has a positive yield: 0.35%.
All short-term euro treasuries have negative yields. The iShares 0-1y euro etf for example has a YTM of -0.5%.

So that’s a difference of almost 1 percent.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Wed Feb 14, 2018 4:35 pm

WhiteElephant wrote:My online savings account still has a positive yield: 0.35%.
All short-term euro treasuries have negative yields. The iShares 0-1y euro etf for example has a YTM of -0.5%.

So that’s a difference of almost 1 percent.
hi

is that theortically correct?

Can we use CD's instead without more RISK?

Thanks
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Re: Permanent Portfolio in Europe (follow-up)

Post by Ugly_Bird » Wed Feb 14, 2018 5:36 pm

frugal wrote:
WhiteElephant wrote:My online savings account still has a positive yield: 0.35%.
All short-term euro treasuries have negative yields. The iShares 0-1y euro etf for example has a YTM of -0.5%.

So that’s a difference of almost 1 percent.
hi

is that theortically correct?

Can we use CD's instead without more RISK?

Thanks
I think savings account is OK, especially in his situation.
CDs are definitely not, though could be dealt with with some fraction of all cash.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sat Feb 17, 2018 12:52 am

Ugly_Bird wrote:
frugal wrote:
WhiteElephant wrote:My online savings account still has a positive yield: 0.35%.
All short-term euro treasuries have negative yields. The iShares 0-1y euro etf for example has a YTM of -0.5%.

So that’s a difference of almost 1 percent.
hi

is that theortically correct?

Can we use CD's instead without more RISK?

Thanks
I think savings account is OK, especially in his situation.
CDs are definitely not, though could be dealt with with some fraction of all cash.
Hi

I thought CD was the same

Cash deposit is not an savings account-?
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Re: Permanent Portfolio in Europe (follow-up)

Post by Ugly_Bird » Sat Feb 17, 2018 8:52 am

frugal wrote:
Ugly_Bird wrote:
frugal wrote: I thought CD was the same
Cash deposit is not an savings account-?
CD - fixed rate, money locked up for certain period of time.
Savings - rate can change, can add and withdraw any time.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sat Feb 17, 2018 11:55 am

Ugly_Bird wrote:
frugal wrote:
Ugly_Bird wrote:
CD - fixed rate, money locked up for certain period of time.
Savings - rate can change, can add and withdraw any time.

hi nice-bird,

can you post your portfolio choice?

Regards
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Re: Permanent Portfolio in Europe (follow-up)

Post by Ugly_Bird » Sat Feb 17, 2018 7:02 pm

frugal wrote:
Ugly_Bird wrote:
frugal wrote:
CD - fixed rate, money locked up for certain period of time.
Savings - rate can change, can add and withdraw any time.

hi nice-bird,

can you post your portfolio choice?

Regards
4x25 PP.
Stocks: ETF
Bonds: ETF
Gold: ETF
Cash: ETF (Short term bonds)+Checking+Savings.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sun Feb 18, 2018 1:40 am

Ugly_Bird wrote:
frugal wrote:
Ugly_Bird wrote:
CD - fixed rate, money locked up for certain period of time.
Savings - rate can change, can add and withdraw any time.

hi nice-bird,

can you post your portfolio choice?

Regards
4x25 PP.
Stocks: ETF
Bonds: ETF
Gold: ETF
Cash: ETF (Short term bonds)+Checking+Savings.
hi!!!

Which ETFs?

Can you name them please.
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Re: Permanent Portfolio in Europe (follow-up)

Post by Ugly_Bird » Sun Feb 18, 2018 10:21 am

frugal wrote:
Ugly_Bird wrote:
frugal wrote:

hi nice-bird,

can you post your portfolio choice?

Regards
4x25 PP.
Stocks: ETF
Bonds: ETF
Gold: ETF
Cash: ETF (Short term bonds)+Checking+Savings.
hi!!!

Which ETFs?

Can you name them please.
They are spread through out several brokerage and IRA accounts

Stocks: IVV, VFIAX
Bonds: TLT, VLGSX
Gold: IAU
Cash: SHY, VFSIX , +Checking+Savings.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sun Feb 18, 2018 11:33 am

Ugly_Bird wrote:
frugal wrote:
Ugly_Bird wrote:
4x25 PP.
Stocks: ETF
Bonds: ETF
Gold: ETF
Cash: ETF (Short term bonds)+Checking+Savings.
hi!!!

Which ETFs?

Can you name them please.
They are spread through out several brokerage and IRA accounts

Stocks: IVV, VFIAX
Bonds: TLT, VLGSX
Gold: IAU
Cash: SHY, VFSIX , +Checking+Savings.
ahhhh

is USPP!
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Re: Permanent Portfolio in Europe (follow-up)

Post by Ugly_Bird » Sun Feb 18, 2018 2:42 pm

frugal wrote:
Ugly_Bird wrote:
frugal wrote: ahhhh
is USPP!
Yep!
My apology if anything I wrote misled you.
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Re: Permanent Portfolio in Europe (follow-up)

Post by D.J. » Sat Mar 03, 2018 7:06 am

Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- iShares Treasury 20+, USD (TLT) - 5% [Changed from Vanguard LT Bonds]

Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- Amundi ETF 3m, EUR (C3M) - 20%
- iShares Short Treasury, USD (SHV) - 5%
+ cash for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options. :(
Last edited by D.J. on Sat Mar 03, 2018 2:24 pm, edited 4 times in total.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sat Mar 03, 2018 10:21 am

D.J. wrote:Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- Vanguard LT Bonds, USD (BLV) - 5%
5
Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- for now in two bank accounts for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options. :(
hi

why 20% in US?

Isnt is a Variable portfolio?
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sat Mar 03, 2018 10:22 am

frugal wrote:
D.J. wrote:Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- Vanguard LT Bonds, USD (BLV) - 5%
5
Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- for now in two bank accounts for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options. :(
hi

why 20% in US?

Isn't it a Variable portfolio?

Currency risk is not good...
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Re: Permanent Portfolio in Europe (follow-up)

Post by WhiteElephant » Sat Mar 03, 2018 10:38 am

That seems like a very reasonable portfolio to me. Certainly ‘good enough’.
One thing you have to keep in mind is that taxation of US-based etf’s can be very different from EU-based ETF’s, especially regarding withholding taxes and estate taxes.
I didn’t want to worry about stuff like that so I decided to just use euro-based etf’s
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Re: Permanent Portfolio in Europe (follow-up)

Post by stuper1 » Sat Mar 03, 2018 11:25 am

Vanguard LT Bonds (BLV) has a lot of non-US Treasury bonds such as corporate bonds. If you are trying to use the PP philosophy, those don't fit. For safety, a US PP only uses US Treasury bonds.
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Re: Permanent Portfolio in Europe (follow-up)

Post by D.J. » Sat Mar 03, 2018 2:02 pm

@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.
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Re: Permanent Portfolio in Europe (follow-up)

Post by WhiteElephant » Sat Mar 03, 2018 3:02 pm

I believe the US withholding tax is 30% of the dividend yield. This happens before you pay your local taxes. Depending on the treaties between your country and the US you might be able to get some of the 30% back.
Irish domiciled ETF’s only pay 15% withholding tax on US assets so that could be a better deal.

This article contains more information about US withholding taxes en estate taxes for non-US investors, see section ‘Domicile of funds’:
https://www.bogleheads.org/wiki/Investi ... etherlands
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Re: Permanent Portfolio in Europe (follow-up)

Post by D.J. » Sat Mar 03, 2018 3:14 pm

Great info, I'll read that in detail. Thanks!
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sun Mar 04, 2018 12:05 am

D.J. wrote:@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.
hi

what if one day 1 USD = 3 EUR ?

Do you think USPP will do better than EUPP ? Why?

Regards
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Re: Permanent Portfolio in Europe (follow-up)

Post by D.J. » Sun Mar 04, 2018 2:55 am

This is exactly done for the case if one day $1=3€. :)

As far as I saw, the long-term gains are a lot higher on USPP than on EUPP.
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Re: Permanent Portfolio in Europe (follow-up)

Post by frugal » Sun Mar 04, 2018 5:20 am

frugal wrote:
D.J. wrote:@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.
hi

what if one day 3 USD = 1 EUR ? (changed)

Do you think USPP will do better than EUPP ? Why?

Regards
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