PSA: I now have a 3-year period with no gains

[BP]

About 2.5 years for me with only a 15% gold allocation.  Right now  the PP is negative both nominal and real.  Would have been even worse with a 25% gold allocation.  BH is positive both nominal and real with the same 25% stock.

[buddtholomew]

Negative 6 months in a row.
Gold and LTT's doing absolutely nothing
DOW down 500

PP = Pathetic Portfolio.

[ochotona]

Negative 6 months in a row.
Gold and LTT's doing absolutely nothing
DOW down 500

PP = Pathetic Portfolio.

So why don't you change?

1. Sell most or all of the gold on a short-term bump, hopefully it's not in an IRA, so you can take the tax loss for 2015, and buy "regular" bonds, like ETF BND
2. The 25% LTTs + 25% STTs/cash are OK to hold as a pair. If you own the actual bonds themselves, not in a fund, I'd just stay put
3. With all of those LTTs and STTs/cash, your fixed income side will still be high quality overall. BND has Treasuries, too, along with things the PPers don't care for
4. 25% stocks is perfectly good to hold now that we aren't sure if we're headed into to an equities bear market or not; this is not the time to buy a buyer of stocks, not yet.

Then you'll be in a conventional defensive mode. You'll suffer along with the rest of us who are configured that way right now. It's not good times for most investors. You need to ditch the yellow metallic sea anchor. Then you will feel better, after you take the loss and get over that.

The way I am thinking these days, metals and any other commodities are the "VP", not core. You can buy them again if you want, and maybe at a lower price in a few years. Maybe a lot lower. We still have not seen capitulation in gold. We've been seeing it in oil the last few days. That's what a capitulation looks like.

When people start saying, "I'm never gonna sell my gold!"... it means they're thinking about selling their gold, or half of their brain is, but the dissonance is intolerable, so they have to officially banish the thought. But they will fold, under the right conditions. No one walks up to you and says, out of the blue, "I'd never kill my wife!". Uh... what would that tell you?

[dualstow]

Some people put new money into the pp every month. I like to wait until Budd is running in the streets.

[buddtholomew]

Some people put new money into the pp every month. I like to wait until Budd is running in the streets.

Good for you.

[Kbg]

Why your PP sucks this year and for the past year. 

http://www.scottsinvestments.com/wp-con ... 8/Ivy1.png

Pretty much no major asset class is profitable.

[LC475]

PP = Pathetic Portfolio.

Just wait for it.  

You'll see!

[mathjak107]

it isn't the fact everything is down , it is the fact everything is down and all assets are horrible horses to hitch the wagon  to be pulled out .

but as i said my feeling is that equity's have the most potential to recover and move ahead if only single digits .

the pp will likely be stuck in the muck as internal fighting between assets will squash equity's attempt to pull it out and positive .  this is one of those time frames i think conventional investing will respond to life support a whole lot better without being torn apart by gold and long term treasury's .

but this has been my objection all along about the pp .

[iwealth]

This forum's morale more than most desperately needs a big equities correction. I'm sure most concerns will abate if equities drop another 15%. That of course assumes the PP doesn't drop with them.

[mathjak107]

perhaps a support group section may help . bud can be president .

[Tyler]

Stocks down 3%.  PP down 0.45%.  And people take that as a reason to complain about the PP because it didn't go up.  That's a classic signal to take a break from thinking about investments for a little while.

For comparison, other stock-centric forums are even more unhappy.  Focus on money all day every day and you'll drive yourself crazy and rationalize that just about everything you've done is either wrong or could be much better.  Go outside and enjoy the nice weather! 

[mathjak107]

I think they Are complaining  more about when stocks are up 3% and the pp is down. We saw that too

[MediumTex]

The fall should be interesting.

The last two 7 year intervals have given us very ugly falls (i.e., 2001 and 2008).

[dualstow]

This forum's morale more than most desperately needs a big equities correction. I'm sure most concerns will abate if equities drop another 15%. That of course assumes the PP doesn't drop with them.

+1 on the -15%

[MediumTex]

This forum's morale more than most desperately needs a big equities correction. I'm sure most concerns will abate if equities drop another 15%. That of course assumes the PP doesn't drop with them.

+1 on the -15%

Every person who builds a storm shelter secretly hopes for a storm, even if they don't like it at all when it actually happens.

[buddtholomew]

Stocks down 3%.  PP down 0.45%.  And people take that as a reason to complain about the PP because it didn't go up.  That's a classic signal to take a break from thinking about investments for a little while.

For comparison, other stock-centric forums are even more unhappy.  Focus on money all day every day and you'll drive yourself crazy and rationalize that just about everything you've done is either wrong or could be much better.  Go outside and enjoy the nice weather!

Not complaining that it didn't go up, but rather that the PP has declined in lockstep with equities. Equities rise, PP flat and equities fall, PP declines. Not a good combination.

[mathjak107]

This forum's morale more than most desperately needs a big equities correction. I'm sure most concerns will abate if equities drop another 15%. That of course assumes the PP doesn't drop with them.

+1 on the -15%

speaking about the supposed 7 year curse :

the time frame following the event  over the next 7 years made the event a non event , as example

lets see how markets did s following the events over the next 7 years  . all of these had a major market event year 1 and another one 7 years later . .

1973 - 1980 --- 8.85% average return

1980-1987 -- 16.84%

1987--1994 -- 12.60%

2001-2007 4.47%

2008-2014 9.85%

[mathjak107]

Stocks down 3%.  PP down 0.45%.  And people take that as a reason to complain about the PP because it didn't go up.  That's a classic signal to take a break from thinking about investments for a little while.

For comparison, other stock-centric forums are even more unhappy.  Focus on money all day every day and you'll drive yourself crazy and rationalize that just about everything you've done is either wrong or could be much better.  Go outside and enjoy the nice weather!

Not complaining that it didn't go up, but rather that the PP has declined in lockstep with equities. Equities rise, PP flat and equities fall, PP declines. Not a good combination.

that is just the points i have been making about the pp in the age of the new normal .  maybe i should write my own book on investing under conditions today  and it will not be about assets that fight each other  but rather play nice  together , support each other and let the usual lead player run with the ball when he gets it . since that lead player over and over has usually been equity's and  the fastest one out of the gate  when it is time ..

i would want to help what has been the star player over and over and not block his efforts so he has an easier time if the going gets tough.

the other players take supporting roles and not try to be the star themselves since that would be speculating on the long shot that this time is different and that has been the losing bet over most of the  longer time frames with few exceptions .  you can see from my list of major market killers every 7 years that in the end the market killer was a non event over time  because equity's tend to recover faster than most other assets do .

better to bet on the normal course of events playing out  rather than depend on the long shot of an extended calamity in my opinion for your financial success to happen .

while we all want to make money and have little volatility and low risk eventually you reach a point in time  in my opinion where the strategy  that did that reaches conditions where things alter the results to the point they work poorly .

ala stocks plunging and foreigners owning so much in treasury's their selling kills the reliability of the asset as having  a consistent  response to a situation , something harry never had on the radar as a possible obstacle .

today the real speculating may be within the pp as the bet is against the norm playing out where equity's carry the ball faster than anything else  in possibly a rising rate environment  and that may now be a wager that can lead the pp to be bogged down in losses with no horse in the race with enough pull .

to be honest i do not see anymore safety in the pp at this point  than conventional .  conventional is betting on equity's  and the normal sequence that happens and the pp is betting on a calamity to pull it out .  both are no more guarantee than the other .  the logic of it all says to me bet on the usual lead player  and not the extended flyer because it has to be extended otherwise like every time in history as soon as the fear ebbs things revert back to business as usual

[mathjak107]

we are seeing a repeat of the same thing today . markets up over 100 while the pp is down as TLT AND GOLD  pull things in reverse

[buddtholomew]

Don't waste your breath Math.
The diehards here will tell you everything is great.

[dualstow]

Don't waste your breath Math.
The diehards here will tell you everything is great.

I for one am not thrilled with how things are going, but I'd rather assess the pp at the end of the year than every single day during these strong market swings.

Rereading mortalpawn's theories in the other thread about why long bonds are not soaring...
(Reply #25)

[buddtholomew]

Don't waste your breath Math.
The diehards here will tell you everything is great.

I for one am not thrilled with how things are going, but I'd rather assess the pp at the end of the year than every single day during these strong market swings.

Rereading mortalpawn's theories in the other thread about why long bonds are not soaring...
(Reply #25)

Theories are irrelevant. It's the results that matter.
I for one hope that the argument "money has to flow to one of the assets" is put to bed.
This is a breakdown in the PP. Global conditions overruling the US economic climate.

[Pointedstick]

Who is saying everything's great? I don't think anybody's particularly thrilled, in an absolute sense, with the performance of the PP or any major assets, for that matter. There aren't a lot of gains to be had at the moment. Harry Browne described this as "tight money recession," and he admitted that the PP would lose ground during this time, but that everything else would probably lose worse. If that's where we're headed, the only asset that won't suck is cash--and in fact, that's where we are right now. My cash is the only PP asset I own that's yielded a positive return YTD. 100% cash is probably the only alternative to the PP that I would consider at this particular moment in time.

The name is funny, though. In this era of massive deficit spending and expansionary monetary policy, maybe we should call it a "loose money recession."

[barrett]

Budd, Not really sure there are so many "diehards" on this forum. Many of us question the PP. I am curious what you think a good asset mix is? And do you think it's possible to pick a mix that will work over a long time, meaning that it doesn't need to be tweaked depending on whatever environment we find ourselves in? Thanks.

[Jack Jones]

Theories are irrelevant. It's the results that matter.

Sure, but you seem to be evaluating your results on too short of a timescale. When dieting, one doesn't weigh himself several times a day to see how things are progressing.

I for one hope that the argument "money has to flow to one of the assets" is put to bed.

I wasn't aware of this argument. Is this something that you believed?