Gyroscopic Investing

Below

Fun topic! 

Here are a few of my own.  All source data is from Simba's spreadsheet.  Rebalanced annually. 


More info here: http://tinyurl.com/p6hlxts and in RickB's link below




More info here: http://tinyurl.com/q9yq5gb



FYI -- if you find these charts helpful, you can now make your own at PortfolioCharts.com.  Enjoy!

[Original thread: http://gyroscopicinvesting.com/forum/pe ... c-graphic/]

Apologies to those of you who are red/green colorblind - in this chart of the inflation adjusted CAGR (similar to Tyler's above - and the original must be credited http://www.crestmontresearch.com/stock-matrix-options/) the color intensity varies essentially continuously according to the magnitude of the CAGR - i.e. there aren't just 5 discrete colors but rather a continuous range of colors.  There's a discrete red/green shift at 3% CAGR, but other than that the "brightness" of the red or green reflects the magnitude of the CAGR.  In all cases the CAGR is inflation adjusted, based on yearly data, with annual rebalancing, and does not account for fees or taxes.

Permanent Portfolio:


100% stock:


60/40 stock / 10yr treasuries:

Another favorite of mine is from Ryan Melvey (melveyr). 


More info here: http://tinyurl.com/otuojkc

Tyler wrote: Another favorite of mine is from Ryan Melvey (melveyr). 


More info here: http://tinyurl.com/otuojkc

Good chart but it looks like it ends in 2011...any chance of an updated version out to 2014 or (so far) 2015? I know the last few years haven't been exactly stunning for the PP and I wanted to see if it was still at the trendline or below it.

D1984 wrote: Good chart but it looks like it ends in 2011...any chance of an updated version out to 2014 or (so far) 2015? I know the last few years haven't been exactly stunning for the PP and I wanted to see if it was still at the trendline or below it.

Here's the last 11 years (05/26/04 to 06/30/15)

Real Log chart roughly similar to Melvyr's $10K start, 15/25/35 bands.


Nominal and real and assets and rebalances in linear form.


CAGR and Draw Down Info


Best fit of the inflation adjusted data to log growth curve.

[cross-posted from http://gyroscopicinvesting.com/forum/pe ... #msg124921]

Most other portfolios inflate their returns by not having any cash, but in real life nobody holds no cash; they simply don't count it as part of their investment portfolio. As a result, their investment portfolios are a smaller percentage of their net worth than a PP investor would have. So an apples-to-apples comparison of two people with identical net worths, one in the PP, and the other not, would either show that the PP person should have a higher amount of their money in the portfolio, or that the other portfolio should include all that cash off to the side.

25% of total net worth being cash works out to 6.25 years living expenses, which is pretty reasonable. If we modify many conventional portfolios to have that much cash, the actual returns on the total portfolio value become much more comparable to the PP. For example, here's a standard 60/40 portfolio that's been modified to be 25% cash 75% 60/40. In other words, 25% cash, 45% stocks, 30% total bond market. PP in blue, other portfolio in red:

[img width=600]http://i.imgur.com/9mNlCGa.png[/img]

The PP wins!

So no, you don't need a separate cash emergency fund if you invest with the PP.

One more for the list:

Lots more info here and here.

I just happen to have some charts of my own I created a while back.  The first is the source data, and the rest are graphs based off of that data.  That last one concerns me, as the 43-year Total Return trend line is clearly sloping downward.  Enjoy.

I've added this linked thread for people to make comments in instead of writing their comments in this thread. Moderators if you'd want to sticky the other thread for comments, be my guest. You are the masters here.

Cool Chart Commentary

Here's a new batch including 2015 data:

More info here.

This one is kinda fun:



Read this for an explanation.

I think this chart sums up the appeal of the Permanent Portfolio pretty well:


For comparison:


For more info, read this.

Just a note to thank Tyler again for the great resource that is Portfolio Charts.
I especially appreciate the risk/return graph. Allowing the user to select his/her own preferred metric for risk and his/her own preferred metric for reward is brilliant.

My choices are maximum drawdown time for risk and maximum perpetual withdrawal for reward.

Your milage might vary.

And Tyler doesn't limit portfolio allocations to 100%. So you can play around with leveraged positions by over-specifying the allocations.

Pretty fun - and seriously one of the best resources available for running "what if" scenarios.

Thank you, Tyler.
Mark

You're welcome!

As I've said many times and am happy to repeat, I've learned a ton over the years from this forum. Conversations here directly inspired many of the tools on the site, so I'm glad you find them useful.

BTW, it's a shame that Tinypic went under and sank all of the images in this thread along with it. But anyone looking for cool Permanent Portfolio charts can find all the latest data here: https://portfoliocharts.com/portfolio/p ... portfolio/