Gyroscopic Investing

Thomas Hoog wrote:I have results starting in 2002.

......

PP index PP index
2002 -2,4% -2,4%
2003 5,6% 3,2%
2004 6,4% 9,6%
2005 19,4% 29,0%
2006 7,6% 36,6%
2007 5,5% 42,1%
2008 -3,3% 38,8%
2009 13,4% 52,2%
2010 13,4% 65,6%
2011 5,1% 70,7%
2012 8,0% 78,7%
2013 -3,4% 75,3%
2014 9,6% 84,9%
2015 1,7% 86,6%
2016 8,7% 95,3%
2017 -0,5% 94,8%
Average 5,9%

Gerard, Can you share the CAGR or do you just have the average? Also, do you have reliable Dutch inflation numbers for that time? At least I think you are Dutch. I'd be really curious to know the real return of a European/Dutch PP with all the discussion on here about how the PP works outside of the US. Thanks.

Yep Dutch, Sorry. no CAGR. I used this just as an benchmark against my own portfolio (10% cash, 20 % gold, 30 % LT Bonds, 40 % Equities // average yield 6,4 % so slightly better).

I dont have inflation figures but I think you can google them. My guess is around 2% for this period. So real return will be around 4 %.

It will no make you rich but that's is the HB philosophy, you make money with almost no effort and with sleepwell nights.

I've got data going back to 2001. Most of my data are yearly index returns from MSCI and Barclays indices. I've used some data from the old Marc de Mesel website.
The indices I've used are the MSCI Emu, Barclays Euro Government 15-30 and Barclays Euro Government 1-3.

Hi

what is the difference between EU-PP and VANILLA PP ?


Regards!

It's a basic eurozone PP, with 4x25 eurozone stocks, eurozone bonds, eurozone cash and gold

Thx, the figures slightly differs but the conclusion is the same; it wont make you rich but it is the best sleep well approach.

Hi,

some years ago we could find in some countries in Eurozone, 3-4-5% for cash deposit in some banks.

This ended forever?

The high rate for cash will never come again?

Regards.

Of course it will, the government has pumped billions into the economy. That money will also go out again, so inflation and thus the cash yield rates will increase. It may be next year or over 10 years but it will happen.
And when inflation is rising it is very hard to control it so it may be quite destructive the next decade. (Just keep your Gold portion safe:) ).

"In the simplest terms, inflation occurs when there's too much money in the system. On the flip side, deflation occurs when there are too few dollars in circulation. Robert Kiyosaki".

Thomas Hoog wrote:Yep Dutch

Another Dutchie here. Thanks for your valuable posts!

These are results from my real 4x25 portfolio of Euro shares with Euro and EM share ETFs, bond ETFs, gold ETFs and cash. Not very different from the US Vanilla PP figures of -2.24, +10.10, -2.99 and +5.9% for the same four years.

2013 -3.04%
2014 +12.39%
2015 +1.42%
2016 +7.08
Average 4.30%
2017 +2.1% so far, improving since the summer.

PS (off topic): I also have a separate portfolio of US and UK blue chip dividend shares, which in spite of the present US market highs is down 3.5% in Euros since 1 Jan 2017.

tarentola wrote:These are results from my real 4x25 portfolio of Euro shares with Euro and EM share ETFs, bond ETFs, gold ETFs and cash. Not very different from the US Vanilla PP figures of -2.24, +10.10, -2.99 and +5.9% for the same four years.

2013 -3.04%
2014 +12.39%
2015 +1.42%
2016 +7.08
Average 4.30%
2017 +2.1% so far, improving since the summer.

PS (off topic): I also have a separate portfolio of US and UK blue chip dividend shares, which in spite of the present US market highs is down 3.5% in Euros since 1 Jan 2017.

hi!!!

4,3% and what about inflation?

Do you think to change to a more aggressive lazy portfolio?


Regards

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%.

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 :-)

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

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

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.

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

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.

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-?

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.

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

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.

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.

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.

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!