I'm not throwing in the towel...

[Professor Disorientation]

I have been following the discussions here and have not posted in a while. I started my PP on December 16, 2014. What do I have to show for my PP? BIL-steady; VTI -3.26; TLT -3.97; IAU -6.99. The PP in down-3.59. Is there anything wrong with the PP? Nope.

I am always fascinated by charts and statistics and prognostications. What these aids can't reflects are investors' emotions. Investing is emotional. If you would have invested at the bottom of the Great Depression when stocks were down 90%, you would be rich. Right? Who has the stomach to do that in the midst of gloom and doom? Who had the money?

When the market was selling off on Monday, I had the peace-of-mind that I didn't need to do anything. My PP could handle it. While others were frantic, I lived my life.

Emotions will wreak havoc on your investment plans. The pain of losing money far outweighs the joy of making money.

Another factor for all investors is perfect hindsight. That is after the dust settles you can see clearly. I wish I would have... That other portfolio is performing so much better than mine. I should have invested there instead of ....

I am staying the course with the PP. I have been adding cash in recent months, and my cash portion is almost 35% of my PP. When that happens, I'll gladly rebalance with a smile.

Investing axiom 101: What is out-of-favor will be in-favor and what is in-favor will be out-of-favor. The sentiments expressed by some is that the PP is out-of-favor. Its day is gone forever. It can't work anymore. It's a loser.

The negative sentiments expressed about the PP makes me very optimistic about the PP. If I am the only one, so be it.

[l82start]

+1

well said, and you are not alone

[dualstow]

I'm with you, Professor Chaos.
And l82start, et al...

[mukramesh]

+1 

[Greg]

I'm with you, Professor Chaos.
And l82start, et al...

*song* Everyone knows its Butters!
"That's Me!"
*song*

https://www.youtube.com/watch?v=1Ocaztxj87E

[MediumTex]

If you don't even watch the markets, there is even less investment-related emotional friction.

[dualstow]

If you don't even watch the markets, there is even less investment-related emotional friction.

If you ever left, M.T., it would give me serious pause. I believe you once said three consecutive years of losses would do it.

[MediumTex]

If you don't even watch the markets, there is even less investment-related emotional friction.

If you ever left, M.T., it would give me serious pause. I believe you once said three consecutive years of losses would do it.

If you live in tornado country, one response is to build a tornado-proof house and never worry about the weather as long as you are inside your house.

Another response is to build the same kind of house everyone else builds and huddle around the television any time it gets cloudy to see how upset you should be.

Worrying about your investments can become such a habit of mind that even a safe and stable strategy like the PP can make you reflexively worry simply because the rest of the herd is worrying.

What I am describing is what I believe Harry Browne was trying to convey in his writings.  Ultimately, the purpose of the PP may be to create the conditions in which one may experience peace of mind with respect to his investments.  The thing is, though, simply creating the conditions where peace of mind can be experienced doesn't mean that peace of mind will actually be experienced. 

The mental grooves of investment worry can be deep and reflexive; shaking the habit can be harder than it looks.

[Fred]

Add me to the list.

I went all in with the PP in 2010 and it doesn't look so bad to me. Would much rather the last 3 years had been better, of course, but it seems way too soon to jettison the strategy because it's not working (from http://www.peaktotrough.com/hbpp.cgi)

[MediumTex]

Fred,

Those returns look fantastic to me.

They're a little below the long term average, but the PP's low volatility has always been the big selling point for me.

[dualstow]

What I am describing is what I believe Harry Browne was trying to convey in his writings.  Ultimately, the purpose of the PP may be to create the conditions in which one may experience peace of mind with respect to his investments.

Do you have any opinion on PointedStick's suspicion that the pp may be "fighting the Fed?" I have always turned a deaf ear in the past to speculation about interference by the government or other organizations, especially with respect to gold. That's because Browne covered that on his radio show.

With respect to bonds, as long as treasuries keep paying what is promised, I don't worry too much about the low rates.

But, if wiser souls than myself, i.e. PS and pretty much everyone around here, ever come to a consensus that "this time it's really different", I might look at the cloudy sky and start to feel nervous, like my house is not tornado proof after all.

{edited for grammar}

[MediumTex]

What I am describing is what I believe Harry Browne was trying to convey in his writings.  Ultimately, the purpose of the PP may be to create the conditions in which one may experience peace of mind with respect to his investments.

Do you have any opinion on PointedStick's suspicion that the pp may be "fighting the Fed." I have always turned a deaf ear in the past to speculation about interference by the government or other organizations, especially with respect to gold. That's because Browne covered that on his radio show.

With respect to bonds, as long as treasuries keep paying what is promised, I don't worry too much about the low rates.

But, if wiser souls than myself, i.e. pretty much everyone around here, ever comes to a consensus that "this time it's really different", I might look at the cloudy sky and start to feel nervous, like my house is not tornado proof after all.

Well, if the PP is fighting the Fed, it's been doing it since 2008, and the PP returns since then haven't been out of the ordinary.

[mathjak107]

it has really not been fighting the fed at all . look at the huge gains the long treasury bonds have had as rates continued to fall until they bottomed out in feb. with just a couple of hic cups on the way  .  owning  long term bonds when the fed raises short term rates and expects the worlds investors to bid up yields on bonds is fighting the fed .

2008 was up 34% as rates fell
2009 was a down year  minus 21% but not because of the fed but because the fear was reduced .
2010 was up 9%

2011 up 34%

2012 up 2.63

2013 minus 13%

2014 up 28%.

hardly fighting the fed .  when rates head up  that will be fighting the fed

[dualstow]

I don't want to quote PS out of context. The full post is at http://gyroscopicinvesting.com/forum/pe ... #msg128551
Reply #26.

look at the huge gains the long treasury bonds have had as rates continued to fall until they bottomed out in feb.

I agree, and have been enjoying those gains.