Drank the Koolaid...

[doug6zj9]

...Or maybe just sipped it.  I read the entire thread at bogleheads.  I read the "best-laid" and "fail-safe" books.  I have begun listening  to the radio shows.

Friday I set up my daughters college fund as a 4X25 PP.  I bought SGOL, TLT, VTI and T-bills.  As an aside, I haven't yet noted HB commenting specifically about "short-term" savings.  It seems the implication is always "retirement" portfolios.

It will take me a while to ease the wife and mines portfolio into this configuration.  We are presently WAY short on the T-bonds portion.

[craigr]

Short term savings can be the cash allocation. Probably should be anyway simply for stability reasons. You can have some split between inside tax-deferred and outside to help with tax efficiency but still have quick access for emergencies.

I think you'll find over time, the way I did when I started the portfolio for myself, that the nagging pain in the back of your head about your money will start to fade away. The stories in the news just won't matter and you can ignore the portfolio for long stretches of time and still be happy with the results.

It's funny because I run this blog and forum now but the truth is I really don't track the markets that closely. I can't tell you the latest market happenings other than really in-your-face news you can't avoid. Sometimes people write me and want to know the daily, weekly, monthly returns data and I just can't tell them. I really don't know and don't care.

To me, that's the great thing about the portfolio. It allows investors to stop caring about the markets.

[Pkg Man]

I read the entire thread at bogleheads.  I read the "best-laid" and "fail-safe" books.  I have begun listening  to the radio shows

I did the same thing, sans the books, which were ordered today.  I just wish I had discovered this 10 years ago (not sure why I didn't, having voted for HB twice).  Even though I didn't panic during the recent crash, the thought of having another 40% drop in my wealth with 12 years to retirement was nagging at me.  And I was WAY too long on stocks. The PP approach seems the most reasonable thing to do given an uncertain world.  Certainly much better than my prior strategy, which was a combination of "hope for the best" and "I never wanted to be 'rich' anyway".   

[doug6zj9]

  I just wish I had discovered this 10 years ago (not sure why I didn't, having voted for HB twice).  Even though I didn't panic during the recent crash, the thought of having another 40% drop in my wealth with 12 years to retirement was nagging at me. 

You are a better man than I.  I DID crack during the recent crash.  I didn't sell at the bottom, but I did sell out of stocks when my losses made it back to "only 40%".    I have been sitting on 90 % cash equivalents and 10% gold ever since and have sat out the biggest stock rally (rebound) in history.  I am hoping that the PP will be a plan I can stick to through thick and thin.

[Pkg Man]

I think the temptation will be to abandon the PP when stocks are posting returns in the high teens while the PP may be in the single digits. IMHO, I think that the mentality going in has to be that the PP has shown itself to be a durable strategy that will work out fine in the long run and with much lower risk than a stock-heavy investment, but only if you stick to it.

I plan to deal with my own temptations through the variable portfolio. But I intend to stick with the PP for my 401K, knowing that whatever return I might be missing out on is available only with significantly higher risk.  I really don't want to worry about the possibility that as I get close to retirement I could be watching the DOW break 10,000 for the umpteenth time.