2014 PP performance

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Tom
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Re: 2014 PP performance

Post by Tom » Thu Jan 01, 2015 9:24 pm

Ok, I back tested my funds on Yahoo Finance - my original numbers were not starting at the beginning of the year so I did a little better than I thought - 7.98% return.  Still curious where the discrepancy is coming from though.  Did my individual funds really under perform by that much?  My funds again:

Stocks - FSTVX
Bonds - TLT
Cash - SHY
Gold - PHYS
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Re: 2014 PP performance

Post by Tom » Thu Jan 01, 2015 9:30 pm

Also, when calculating the YTD, are people here using the prices from the close of Dec 31 2013 to close Dec 31 2014 or the open Jan 2nd 2013 to close Dec 31 2014?
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Re: 2014 PP performance

Post by sophie » Thu Jan 01, 2015 9:36 pm

Holy Mathilda.  PRPFX is really having a hard time of it.  Doesn't even look like the PP's first cousin anymore.  Are the light long bonds, silver, Swiss francs, and natural resource stocks really that much of a drag, or there some serious management issues going on?
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Re: 2014 PP performance

Post by Ad Orientem » Thu Jan 01, 2015 9:40 pm

Tom,
Generally it's the first business day of the year to the last. I haven't looked at the numbers but you need to remember that PHYS is a closed ended fund and as such it doesn't track the price of bullion. I have beat this horse to death on a lot of threads so what's one more? Closed ended gold funds almost always trade at some sort of premium or discount depending on market sentiment. That makes them wonderful for speculative investing, but they can seriously skew the returns on a PP. IMHO they are strictly VP material.
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Re: 2014 PP performance

Post by Ad Orientem » Thu Jan 01, 2015 9:42 pm

sophie wrote: Holy Mathilda.  PRPFX is really having a hard time of it.  Doesn't even look like the PP's first cousin anymore.  Are the light long bonds, silver, Swiss francs, and natural resource stocks really that much of a drag, or there some serious management issues going on?
When you are overweighted for inflation, and much of the world is mired in a near deflationary depression, you are not going to do well.
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Re: 2014 PP performance

Post by Ad Orientem » Thu Jan 01, 2015 9:54 pm

On a side note; PERM also underperformed the HBPP, though not horribly so. It posted a gain of slightly over 6%.
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Re: 2014 PP performance

Post by Tom » Thu Jan 01, 2015 10:16 pm

Ad Orientum - turns out I'm dumb and had an error in my spreadsheet for calculating the percentage.  The truth is that my margin of error isn't nearly as bad as I thought.  From open Jan 2, 2014 to close Dec 31, 2014 is a gain of 8.53% - much more believable difference in performance.

So PHYS doesn't track the price of bullion AT ALL?  Even though you can actually redeem it for bullion?  Is it worth completely selling out of and switching to GLD?
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Re: 2014 PP performance

Post by Gosso » Thu Jan 01, 2015 10:21 pm

Tom wrote: Ok, I back tested my funds on Yahoo Finance - my original numbers were not starting at the beginning of the year so I did a little better than I thought - 7.98% return.  Still curious where the discrepancy is coming from though.  Did my individual funds really under perform by that much?  My funds again:

Stocks - FSTVX
Bonds - TLT
Cash - SHY
Gold - PHYS
It seems Yahoo! hasn't recorded the December dividend of 1.3% for FSTVX, but once that is included then FSTVX had a total return of 12.3%, which is close to the total return of SPY at 13.5%.  PHYS also closely matched GLD, where the returns where -1.9% and -2.2%, respectively.

Using the historical close adjusted prices from Yahoo! I get the following for the PP:
SPY = 13.5%
GLD = -2.2%
TLT = 27.3%
SHY = 0.45%
PP = 9.8% total return for 2014 (from Dec 31, 2013 to Dec 31, 2014)
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Re: 2014 PP performance

Post by Tom » Thu Jan 01, 2015 10:33 pm

Gosso - I must just be really really bad at math?  I'm calculating by subtracting my overall portfolio's ending value from teh starting value - dividing the difference by the starting value and multiplying by 100.  I'm getting 8.53% for my return.  I know there's differences between FSTVX vs SPY and PHYS vs GLD, but not that big of a difference for me to get 8.53% and you 9.8%
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Re: 2014 PP performance

Post by Ad Orientem » Thu Jan 01, 2015 10:47 pm

Tom wrote: Ad Orientum - turns out I'm dumb and had an error in my spreadsheet for calculating the percentage.  The truth is that my margin of error isn't nearly as bad as I thought.  From open Jan 2, 2014 to close Dec 31, 2014 is a gain of 8.53% - much more believable difference in performance.

So PHYS doesn't track the price of bullion AT ALL?  Even though you can actually redeem it for bullion?  Is it worth completely selling out of and switching to GLD?
8.5% is ball park for the PP's performance for this year. There will always be minor differences here and there. Regarding closed ended funds, I'm not saying they won't ever track the price of gold. I am saying that they frequently deviate based on market sentiment. If gold is hot, closed ended funds are likely to be smoking hot. If gold is cold, then these kinds of funds can smell like last weeks trash left to ferment in the furnace room. I'd stick to physical gold if at all possible. If you need or want a fund for ease of rebalancing then I'd probably just go with IAU.
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Re: 2014 PP performance

Post by Gosso » Thu Jan 01, 2015 10:55 pm

Tom wrote: Gosso - I must just be really really bad at math?  I'm calculating by subtracting my overall portfolio's ending value from teh starting value - dividing the difference by the starting value and multiplying by 100.  I'm getting 8.53% for my return.  I know there's differences between FSTVX vs SPY and PHYS vs GLD, but not that big of a difference for me to get 8.53% and you 9.8%
Well when I use fstvx and phys for your PP I get 9.2%, and once you add in the missing dividend of 1.3% from fstvx then your PP has a return of 9.5%.  The difference between our numbers could be from start dates, dividends/interest, or the data might not be fully up-to-date.
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Re: 2014 PP performance

Post by Tom » Thu Jan 01, 2015 11:25 pm

Thanks Gosso!  I should clarify - I have two PPs.  One for my regular savings and one for retirement.  In my retirement I hold long term bonds directly and physical gold.

I hold funds for my regular savings b/c it's just easier and more liquid (particularly the gold portion) that way if I ever needed the cash in a hurry.  I went with PHYS since I'm likely to sell in the mid-term future and the tax treatment is better. Do I risk losing way more in gold beyond what bullion is losing by staying in PHYS?  If that's the case, I'm concerned, but this year and last weren't hot years for gold and it tracked fairly close to bullion both years. What is IAU about?

Thanks again!
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Re: 2014 PP performance

Post by Stunt » Fri Jan 02, 2015 8:28 am

Since I hold the Canadian PP, I thought I'd share how our results differ from what you guys had in 2014.

Stocks: +8.1%
Bonds: +11.5%
Gold: +4.4%
Cash: +0.1%
Total: +6.0%

As you can see the resource heavy Canadian stock market got hit hard by the pull back in oil price. However that exit of foreign investment and reduced economic activity resulted in lower currency value making gold positive relative to slight negative for US PP. Long bonds did not perform as good as the US I assume because of higher inflation since Canada imports a lot with a lower currency value.

Now one thing I've done with my PP that has helped this year is owning half Canadian, half US stock - helped with a 10-15% rise in currency and rise in US stock market. I just don't like how resource heavy the Canadian market is. In times of prosperity, the market won't necessarily go up since commodities are cyclical.  63% of the Canadian index is financials, mining and oil/gas - the S&P500 by comparison is 29%...
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Re: 2014 PP performance

Post by Gosso » Fri Jan 02, 2015 12:26 pm

Stunt wrote: Since I hold the Canadian PP, I thought I'd share how our results differ from what you guys had in 2014.

Stocks: +8.1%
Bonds: +11.5%
Gold: +4.4%
Cash: +0.1%
Total: +6.0%

As you can see the resource heavy Canadian stock market got hit hard by the pull back in oil price. However that exit of foreign investment and reduced economic activity resulted in lower currency value making gold positive relative to slight negative for US PP. Long bonds did not perform as good as the US I assume because of higher inflation since Canada imports a lot with a lower currency value.

Now one thing I've done with my PP that has helped this year is owning half Canadian, half US stock - helped with a 10-15% rise in currency and rise in US stock market. I just don't like how resource heavy the Canadian market is. In times of prosperity, the market won't necessarily go up since commodities are cyclical.  63% of the Canadian index is financials, mining and oil/gas - the S&P500 by comparison is 29%...
Hmmm, my numbers are quite different.  Using the adjusted closing prices (includes dividends) from Yahoo! Finance I get the following:

Stocks (XIU) +11.9%    ((21.47 / 19.18) - 1)
Gold (IGT)    +7.8%
Bonds (ZFL) +17.4%
Cash (ZFS)  +2.3%

Canadian 4x25 PP +9.85% (includes dividends and interest)

Unhedged US stocks (SPY) priced in Canadian Dollars increased 24.2% (CAD weakened 9.3% against USD), so this would boost the returns for a Canadian PP depending on allocation to US stocks.
Last edited by Gosso on Fri Jan 02, 2015 2:20 pm, edited 1 time in total.
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Re: 2014 PP performance

Post by Stunt » Fri Jan 02, 2015 12:50 pm

Gosso wrote: Hmmm, my numbers are quite different.  Using the adjusted closing prices (includes dividends) from Yahoo! Finance I get the following:

Stocks (XIU) +11.9%    ((21.47 / 19.18) - 1)
Gold (IGT)    +7.8%
Bonds (ZFL) +17.4%
Cash (ZFS)  +2.3%

Canadian 4x25 PP +9.85% (includes dividends and interest)

Unhedged US stocks priced in Canadian Dollars increased 22.8% (CAD weakened 9.3%), so this would obviously boost the returns for a Canadian PP depending on allocation to US stocks.
I used XIU but I see the ETF starting 2014 at 19.6 and not 19.18.
Gold I used the raw value of the metal and not an ETF - most people (myself included) seem to buy physical.
Bonds I used XLB, not sure how that compares to ZFL and similarly for cash I used XSB.

I might have forgotten dividends...
Last edited by Stunt on Fri Jan 02, 2015 12:57 pm, edited 1 time in total.
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Re: 2014 PP performance

Post by Gosso » Fri Jan 02, 2015 1:47 pm

Stunt wrote:
Gosso wrote: Hmmm, my numbers are quite different.  Using the adjusted closing prices (includes dividends) from Yahoo! Finance I get the following:

Stocks (XIU) +11.9%    ((21.47 / 19.18) - 1)
Gold (IGT)    +7.8%
Bonds (ZFL) +17.4%
Cash (ZFS)  +2.3%

Canadian 4x25 PP +9.85% (includes dividends and interest)

Unhedged US stocks priced in Canadian Dollars increased 22.8% (CAD weakened 9.3%), so this would obviously boost the returns for a Canadian PP depending on allocation to US stocks.
I used XIU but I see the ETF starting 2014 at 19.6 and not 19.18.
Gold I used the raw value of the metal and not an ETF - most people (myself included) seem to buy physical.
Bonds I used XLB, not sure how that compares to ZFL and similarly for cash I used XSB.

I might have forgotten dividends...
For XLB I got 16.5% ((23.62/20.27)-1).  So I'm pretty sure the only thing you're missing are the dividends, which are accounted for in the adjusted close at Yahoo! Finance.  The default for calculating past returns should be the adjusted close, the only time the pure closing price is needed is for technical analysis.
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Re: 2014 PP performance

Post by tarentola » Mon Jan 05, 2015 4:20 am

Some Euro figures:

IMEU Euro shares +8.3%
IBGL Euro 15-30y bonds +26.6%
GBS Gold +1.5%
IBGS Euro 1-3y bonds +1.8%

Average = 9.6%, very close to USA figure.
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Re: 2014 PP performance

Post by MachineGhost » Mon Jan 05, 2015 5:09 am

"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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Re: 2014 PP performance

Post by sophie » Tue Jan 06, 2015 12:04 am

Thanks for that chart!

My PP return for 2014 was 9.58%.  Surprised me, as my PP started out a bit off balance. 

It's interesting how we so easily focus on the bad times, and forget to notice as the portfolio is forging steadily upward.  Like the tortoise that beats the hare to the finish line!
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Re: 2014 PP performance

Post by Thomas Hoog » Tue Jan 06, 2015 2:32 am

tarentola wrote: Some Euro figures:

IMEU Euro shares +8.3%
IBGL Euro 15-30y bonds +26.6%
GBS Gold +1.5%
IBGS Euro 1-3y bonds +1.8%

Average = 9.6%, very close to USA figure.
I have got slightly different € figures:

IBGS Euro 1-3y bonds: +3,1%
iShares MSCI World UCITS ETF DIST (ok, its global): 13,6%
Gold ($) : 5,3%

Total return (10 %, cash, 20 % Gold, 30 % Bonds, 40 % equities): 17%.
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Re: 2014 PP performance

Post by Stunt » Tue Jan 06, 2015 4:51 am

sophie wrote: Thanks for that chart!

My PP return for 2014 was 9.58%.  Surprised me, as my PP started out a bit off balance. 

It's interesting how we so easily focus on the bad times, and forget to notice as the portfolio is forging steadily upward.  Like the tortoise that beats the hare to the finish line!
Sophie - IIRC, you are Canadian...What were your holdings last year and weightings?
Did you end up diversifying with some US equity exposure?

Thanks :)
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Re: 2014 PP performance

Post by sophie » Tue Jan 06, 2015 11:40 am

I'm US not Canadian.  I forget the balances at the beginning of the year, but bonds particularly were creeping close to the 15% rebalance mark and gold was below it.  I "rebalanced" mainly by going with a standard Boglehead 50/50 in my active retirement account, due to inability to place gold there, and used new contributions to bring the PP more into balance - it's now close to ideal 25x4. 

If it matters, I keep the stock portion balanced at 80% US total market and 20% international.  The latter did not do too well this year, so between that and the low bond % I expected more of a performance penalty.  Nice surprise that this wasn't the case.
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Re: 2014 PP performance

Post by I Shrugged » Tue Jan 06, 2015 6:17 pm

I only got 5.6%.  My stocks are split roughly 50-50 US-Intl.  And I have a good chunk of foreign bond exposure too. 

It seemed like a good idea at the time, lol.
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Re: 2014 PP performance

Post by Reub » Tue Jan 06, 2015 6:23 pm

Enough with 2014. How is 2015 looking so far? :)
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Re: 2014 PP performance

Post by MachineGhost » Tue Jan 06, 2015 7:39 pm

Reub wrote: Enough with 2014. How is 2015 looking so far? :)
Typical January pullback in stocks so far.  Nothing abnormal.  All sytems nominal.
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