EU-PP is still valid?

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frugal
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EU-PP is still valid?

Post by frugal » Mon Nov 10, 2014 6:25 am

Hello,

I know that after reading the book everyone almost decrease their activity in this good forum.

As there are no reviews to the book, I would like to ask you if PP for an european citizen is still a good choice.

Please let me know.

Thank you for your kind help.

All the best.
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Re: EU-PP is still valid?

Post by barrett » Mon Nov 10, 2014 7:11 am

Frugal,

You have a European PP already, correct? I am curious how it has done so far this year. Year-to-date the US PP seems to be up about 7%. We are all slightly negative in the gold slice, but you should be up 5-6% in gold because of the falling value of the Euro relative to the dollar.

I don't know what stock index you use but I see that the DAX is flat for the year. Also, I can't find the total dividend yield on the DAX, but from glancing at the yields of the individual components, it looks like reinvested stock dividends should be helping you a bit. Here in the US, the dividend yield on the S&P 500 is around 1.8%.

How have long bonds done this year in Europe? I just saw this online:

"Spain sold 50-year bonds for the first time this week in a private placement, while Portugal sold 3.5 billion euros of new 15-year securities via banks, the longest-maturity debt sale since the nation exited a three-year bailout program."

I would be curious to know what the yield is on those 15-year bonds in your native Portugal.

Hopefully some other European PP'ers will post here as well. A few of them posted comments in the stock section recently.

Best of luck to you over there.
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Re: EU-PP is still valid?

Post by Mark Leavy » Tue Nov 11, 2014 1:22 am

frugal wrote: As there are no reviews to the book, I would like to ask you if PP for an european citizen is still a good choice.
Frugal,
PM me an email address and I will buy you a kindle copy of CraigR and MT's book.  I think you would enjoy reading it, if you can spare the time.

I am 100% certain that it will not solve all of your problems.  But then again, nothing will.
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Re: EU-PP is still valid?

Post by frugal » Tue Nov 11, 2014 2:41 am

barrett wrote: Frugal,

You have a European PP already, correct? I am curious how it has done so far this year. Year-to-date the US PP seems to be up about 7%. We are all slightly negative in the gold slice, but you should be up 5-6% in gold because of the falling value of the Euro relative to the dollar.

I don't know what stock index you use but I see that the DAX is flat for the year. Also, I can't find the total dividend yield on the DAX, but from glancing at the yields of the individual components, it looks like reinvested stock dividends should be helping you a bit. Here in the US, the dividend yield on the S&P 500 is around 1.8%.

How have long bonds done this year in Europe? I just saw this online:

"Spain sold 50-year bonds for the first time this week in a private placement, while Portugal sold 3.5 billion euros of new 15-year securities via banks, the longest-maturity debt sale since the nation exited a three-year bailout program."

I would be curious to know what the yield is on those 15-year bonds in your native Portugal.

Hopefully some other European PP'ers will post here as well. A few of them posted comments in the stock section recently.

Best of luck to you over there.
Hi,

I think it is up between 2 and 3% not more.

Maybe USPP is doing better...

Mark Leavy wrote:
frugal wrote: As there are no reviews to the book, I would like to ask you if PP for an european citizen is still a good choice.
Frugal,
PM me an email address and I will buy you a kindle copy of CraigR and MT's book.  I think you would enjoy reading it, if you can spare the time.

I am 100% certain that it will not solve all of your problems.  But then again, nothing will.
Helo Mark,

I bought in 2012 the hard copy :-) which I think is still the most updated one.

Right?
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Re: EU-PP is still valid?

Post by Mark Leavy » Tue Nov 11, 2014 2:58 am

frugal wrote: I bought in 2012 the hard copy :-) which I think is still the most updated one.
Frugal, you are a man ahead of your time.  You have the tools, you have the acquisitiveness, and you have the avarice.  Tread slowly until you gain the cynicism and wisdom that only time and humiliating market losses can deliver.

Good Luck!
Mark
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Re: EU-PP is still valid?

Post by happyspec » Tue Nov 11, 2014 5:09 am

barrett wrote: Frugal,

You have a European PP already, correct? I am curious how it has done so far this year. Year-to-date the US PP seems to be up about 7%. We are all slightly negative in the gold slice, but you should be up 5-6% in gold because of the falling value of the Euro relative to the dollar.

I don't know what stock index you use but I see that the DAX is flat for the year. Also, I can't find the total dividend yield on the DAX, but from glancing at the yields of the individual components, it looks like reinvested stock dividends should be helping you a bit. Here in the US, the dividend yield on the S&P 500 is around 1.8%.

How have long bonds done this year in Europe? I just saw this online:

"Spain sold 50-year bonds for the first time this week in a private placement, while Portugal sold 3.5 billion euros of new 15-year securities via banks, the longest-maturity debt sale since the nation exited a three-year bailout program."

I would be curious to know what the yield is on those 15-year bonds in your native Portugal.

Hopefully some other European PP'ers will post here as well. A few of them posted comments in the stock section recently.

Best of luck to you over there.
Hi everyone, the German DAX this year is a little bit in the red with minus 2 % (including dividends already), the German Long bond has made 24 % ;), gold in Euro is up 6 % now and for cash you get - well - nothing  :'(... All in all, I would say this is not a bad year for PP-followers in Germany with 7 % roundabout. European stocks are flat this year too.
We often underestimate what we can reach in the long term.
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Re: EU-PP is still valid?

Post by Thomas Hoog » Tue Nov 11, 2014 8:19 am

Strange, I have the greatest year ever:
(10% cash, 20 % Gold, 30 % Bonds, 40 % equities allocation):



ETFS Gold Trust 5,44%
iShares Euro Govt Bond 1-3yr UCITS ETF 0,74%
iShares Euro Govt Bond 15-30yr UCITS ETF 19,15%
iShares MSCI World UCITS ETF DIST 14,95%
SPDR Gold Trust 5,40%
Totaal YTD 14,00%
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Re: EU-PP is still valid?

Post by happyspec » Tue Nov 11, 2014 9:41 am

Thomas Hoog wrote: Strange, I have the greatest year ever:
(10% cash, 20 % Gold, 30 % Bonds, 40 % equities allocation):



ETFS Gold Trust 5,44%
iShares Euro Govt Bond 1-3yr UCITS ETF 0,74%
iShares Euro Govt Bond 15-30yr UCITS ETF 19,15%
iShares MSCI World UCITS ETF DIST 14,95%
SPDR Gold Trust 5,40%
Totaal YTD 14,00%



Congratulations, Gerard. Hope it keeps going for you. It's clear that your best year comes from well-performing U.S. stocks and a stronger dollar. But don't forget: There will be times when equities of good old Europe will do better than those of the U.S.
I know that this is hard to believe in these times. But my own research showed that the S&P 500 Price index lagged the DAX price index from 2004 to 2007. Dax made 79 %, S&P 32 % for Buy and Hold. Even after the crash 2008 the DAX was up 38 % at the end of 2010 whereas S&P had only climbed 13 %. From 1994 to 1999 the Euro Stoxx 50 outpaced the S&P 500 slightly - it gained 242 %, the American index was up 216 %.
So there are times when the U.S. is stronger and there were times when Europe was. I don't believe that the European or German economy will fall apart so chances are that European stocks will do better than U.S. stocks in the years ahead - especially as valuations in Europe are lower and a stronger dollar should help export driven economies.
We often underestimate what we can reach in the long term.
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Re: EU-PP is still valid?

Post by frugal » Tue Nov 11, 2014 10:38 am

Hello,

if my calculations are correct, dividends and returns since begining of 2013, Europe has:

+8,4%

Please confirm if it is right.


Thank you.
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Re: EU-PP is still valid?

Post by happyspec » Tue Nov 11, 2014 11:21 am

frugal wrote: Hello,

if my calculations are correct, dividends and returns since begining of 2013, Europe has:

+8,4%

Please confirm if it is right.


Thank you.
Hello Frugal, I calculated the numbers from the beginning of 2014 as this is year in question. For my portfolio the performance until now is around 7 % since then as I haven't still received the payout from the bonds. Therefore I cannot confirm if your numbers are correct but I think so. Honestly I don't care so much about the numbers in my own portfolio because I know that this portfolio helps to secure our life's savings come what may. This is what counts for me... Best greetings to Portugal  :)
We often underestimate what we can reach in the long term.
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Re: EU-PP is still valid?

Post by Thomas Hoog » Wed Nov 12, 2014 6:35 am

happyspec wrote:
Thomas Hoog wrote: Strange, I have the greatest year ever:
(10% cash, 20 % Gold, 30 % Bonds, 40 % equities allocation):



ETFS Gold Trust 5,44%
iShares Euro Govt Bond 1-3yr UCITS ETF 0,74%
iShares Euro Govt Bond 15-30yr UCITS ETF 19,15%
iShares MSCI World UCITS ETF DIST 14,95%
SPDR Gold Trust 5,40%
Totaal YTD 14,00%



Congratulations, Gerard. Hope it keeps going for you. It's clear that your best year comes from well-performing U.S. stocks and a stronger dollar. But don't forget: There will be times when equities of good old Europe will do better than those of the U.S.
I know that this is hard to believe in these times. But my own research showed that the S&P 500 Price index lagged the DAX price index from 2004 to 2007. Dax made 79 %, S&P 32 % for Buy and Hold. Even after the crash 2008 the DAX was up 38 % at the end of 2010 whereas S&P had only climbed 13 %. From 1994 to 1999 the Euro Stoxx 50 outpaced the S&P 500 slightly - it gained 242 %, the American index was up 216 %.
So there are times when the U.S. is stronger and there were times when Europe was. I don't believe that the European or German economy will fall apart so chances are that European stocks will do better than U.S. stocks in the years ahead - especially as valuations in Europe are lower and a stronger dollar should help export driven economies.
Of course, iShares MSCI World UCITS ETF DIST is made out 50 % US. My whole point is: I don't belive in local investements regarding equities. Germany is too small. It is best to have a simple global EFT: p.e VT, but that's in $. In that way it doesn't matter which economy shrinks or grows. And yes, I was luky with he $ /€ ratio. Next year I will lose on that point (or not). I think the FED/ECB manipulate the currency ratio's against the Asia/Yen currency. So it will stay within acceptable ranges.
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Re: EU-PP is still valid?

Post by frugal » Wed Nov 19, 2014 9:49 am

frugal wrote: Hello,

if my calculations are correct, dividends and returns since begining of 2013, Europe has:

+8,4%

Please confirm if it is right.


Thank you.

WRONG NUMBER  >:( >:( :(

The correct performance since inception begining of 2013 is:

5%

:o


2,5% per year
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Re: EU-PP is still valid?

Post by ILoveMoney » Thu Nov 20, 2014 8:03 pm

Frugal, what ETFs do you use? Can you list all 4 of them here?

It appears the European PP was down 3% in 2013. So it's up 8% this year?

http://europeanpermanentportfolio.blogs ... folio.html

Sucks to have started in a losing year. Assuming you have a PP for only 2 years.
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Re: EU-PP is still valid?

Post by tarentola » Sat Nov 22, 2014 5:36 am

Frugal

My Euro PP (IMEU, IBGL, PHGP, IBGS) is up 8.4% this calendar year.  Did well in the last few weeks: it was a lot less (5.5% for this year) last month. [Revision 24.11.14: It was down about 3% in 2013. That fits with your figure of 5% over two years.]

Year-to-date figures from Boursorama.com:
IMEU Euro shares +5.45%
IBGL Euro 15-30y bonds +22.14%
PHGP Gold +5.55%
IBGS Euro 1-3y bonds +1.67%
Average = 8.67%

I was trying to stay in Euros as much as possible, but in retrospect I should have included some US shares instead of only IMEU, or used a world stock market index like Gerard.

But to answer the original question, a Euro PP seems to still be a good choice.

Regards
tarentola
Last edited by tarentola on Mon Nov 24, 2014 11:39 am, edited 1 time in total.
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Re: EU-PP is still valid?

Post by ILoveMoney » Sat Nov 22, 2014 12:52 pm

Thanks for posting your results Tarentola!

Good to hear the PP did well even in Europe. Sorry to hear your Portfolio didn't quite match Tarentola's Frugal. Again, please post all of ETFs you picked to comprise your PP. I have a wild idea of what might have went wrong. I assume it would be the bond part.

The reason I think that... It's just a wild assumption is because I have seen a lot of people from Europe pick 50% of the bond part Euro bonds (Italy, Spain....) and the other 50% of the bond part German bonds. The German bonds have done really well. The EU ones have done pretty lousy. For the bonds you don't needs diversification. You just need the strongest. German ones. Marc De Mesel explained this in a podcast.

www.youtube.com/watch?v=i-oW4LYI6Rc

Don't remember exactly what minute but think it was somewhere around the 20 minute mark.

@ Tarentola

When choosing a fund in USD. Would you hedge the currency risk? (Buy options or futures?)

I really don't like all the currency swings. I just don't care for it.

Here's a good article on it of you are interested.
http://www.retailinvestor.org/hedge.html
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Re: EU-PP is still valid?

Post by tarentola » Sun Nov 23, 2014 12:22 pm

ILoveMoney

Thanks for the reply. I agree with you about currency swings - I have been caught in the past with a sterling drop against the Euro. To answer your question: for a US stocks fund like an SP500 fund, I would not bother hedging as it would be only part of my equity section, and I can just about persuade myself that the big companies making up the index have a lot of international exposure already.

See for example
http://money.usnews.com/money/blogs/flo ... an-anymore
http://www.businessinsider.com/foreign- ... on-2014-10

The SP500 ETF SP5 (Euros) has remained pretty close to SPY ($) over the last five years, if you compare the charts.

However if I were investing in something in US dollars only (bonds for example), I would like to hedge, if it wasn't too complicated. But for bonds, I am sticking to Euro bonds for the moment.

Regards
tarentola

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Re: EU-PP is still valid?

Post by frugal » Sun Nov 23, 2014 2:39 pm

ILoveMoney wrote: Frugal, what ETFs do you use? Can you list all 4 of them here?

It appears the European PP was down 3% in 2013. So it's up 8% this year?

http://europeanpermanentportfolio.blogs ... folio.html

Sucks to have started in a losing year. Assuming you have a PP for only 2 years.
hi

I have a mix of various ETFs for each asset type.
I already posted it on european-pp post.

It is a big difference from tarentola ...
:o

tarentola wrote: Frugal

My Euro PP (IMEU, IBGL, PHGP, IBGS) is up 8.4% this calendar year, and 14.21% since January 2013, when it was started, equivalent to a compound annual growth rate of 7.25% over almost two years.  Did well in the last few weeks: it was a lot less (5.5% for this year) last month.

Year-to-date figures from Boursorama.com:
IMEU Euro shares +5.45%
IBGL Euro 15-30y bonds +22.14%
PHGP Gold +5.55%
IBGS Euro 1-3y bonds +1.67%
Average = 8.67%

I was trying to stay in Euros as much as possible, but in retrospect I should have included some US shares instead of only IMEU, or used a world stock market index like Gerard.

But to answer the original question, a Euro PP seems to still be a good choice.

Regards
tarentola
Hello

did you have 14,21 - 8,67 = 5,54% in 2013?



regards!
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Re: EU-PP is still valid?

Post by ILoveMoney » Sun Nov 23, 2014 6:40 pm

Tarentola.

Interesting. Thanks!


Frugal

Would you please be so kind to repost the ETFs you use?

I have browsed trough 14 pages of your post history/ did a Google search and came up empty.

Not sure why you wouldn't quickly repost these here for your benefit as well as every other Euro PP investor browsing here.

Do you really expect me to go find a needle in a haystack? Or am I missing something?
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Re: EU-PP is still valid?

Post by tarentola » Mon Nov 24, 2014 12:03 pm

Frugal
My mistake. I have corrected my earlier post where I had mistakenly used my "since inception" figure instead of my 2013 figure. My PP lost about 3% in 2013, thanks to gold's losing over 25%. Your figure of +5% over two years is right, giving a CAGR of less than 2.5% over the two years.
Regards
tarentola
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