The Reason to Quit PP

General Discussion on the Permanent Portfolio Strategy

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buddtholomew
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Re: The Reason to Quit PP

Post by buddtholomew » Wed Sep 23, 2015 11:51 am

koekebakker wrote:
buddtholomew wrote:
mathjak107 wrote: for sure , all this back testing means little going forward , no better than driving and looking in the rear view mirror  at  places you never even went to .. . it is all about your own returns .

think about someone first buying the pp today .  odds are they may do very nicely out of the box , relatively quickly if things turn around  compared to when i tried it in june .

buying something and getting whacked day one before developing a cushion from an up cycle can be a lot more painful then after you have some gains as a cushion .

my pp fell in a hole day one and i am not convinced it will pull itself out easily from that hole any time soon .  i feel a lot more secure , whether it happens or not that i will see the 50/50 mix have the equity portion pull it out before my x pp turns positive again .
The only difference I see between the two portfolios is the PP allocation to Gold. You've decided to allocate this 25% to equities whereas a PP investor has chosen to further diversify in PM's.
This is why I don't get Mathjak's crusade against the PP. There's hardly any difference between a conservative stock/bond portfolio and the PP. If you believe the PP has too much gold just dial it down a bit and put the rest in equities. Or run a 40/20/20/20. No big deal.
I just dialed gold and treasuries back and increased cash - 25/20/20/35. Never back tested but works for me.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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Re: The Reason to Quit PP

Post by sophie » Wed Sep 23, 2015 1:40 pm

Wow, a whole page and not one single mathjak post...

Judging by the criteria I've seen espoused here, it sounds like the ideal portfolio should be 100% Lending Club.  No down years for the vast majority of investors with > 200 notes, and you even get decent cash flow.

Of course you all should do no such thing, because the fundamentals of that investment are still not well understood and it could do very badly in the right economic conditions.  Just making the point that talking about performance and ignoring fundamentals is like the tail wagging the dog.
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Re: The Reason to Quit PP

Post by mathjak107 » Wed Sep 23, 2015 2:52 pm

the comments basically  follow in line with my own comments which is if harry was alive there is a good chance he would have revised the allocations because of golds behavior as a non respondent to uncertainty the last 40 years . there was always another  asset that did the job better  and the fact there are  other better ways of betting against the markets .

the fact interest rates have now started to cycle upward with the 10 year about 30% higher in yield then the beginning of the year may have had some adjustments too for the future going forward  consideruing we may have decades of the reverse in interest rates .. .

but we will never know but some are doing it on their own .
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Re: The Reason to Quit PP

Post by barrett » Wed Sep 23, 2015 3:08 pm

mathjak107 wrote: ... if harry was alive there is a good chance he would have revised the allocations because of golds behavior as a non respondent to uncertainty the last 40 years .
One step at a time, please. Can you please tell me where Harry Browne said that gold was chosen as a PP asset because it responds to "uncertainty"? What I remember is that he specifically said that it cannot be counted on to respond positively just because of "uncertainty". For the moment, let's leave aside whether or not it responds to inflation in the ways he predicted.
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Re: The Reason to Quit PP

Post by mathjak107 » Wed Sep 23, 2015 3:30 pm

craigs web site

"Why do I want to own gold in my Permanent Portfolio?
Gold is a powerful asset that protects against inflation or threats of inflation. Gold also offers protection against problems that may threaten a currency or banking system.



i think we saw quite a few banking systems and currency's with problems the last 40 years .


the only thing gold will respond to is problems in the us dollar .  and perhaps high inflation in the us .  it  has not responded to  just any  " a currency or banking system "
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Re: The Reason to Quit PP

Post by iwealth » Wed Sep 23, 2015 4:24 pm

mathjak107 wrote: craigs web site

"Why do I want to own gold in my Permanent Portfolio?
Gold is a powerful asset that protects against inflation or threats of inflation. Gold also offers protection against problems that may threaten a currency or banking system.

i think we saw quite a few banking systems and currency's with problems the last 40 years .

the only thing gold will respond to is problems in the us dollar .  and perhaps high inflation in the us .  it  has not responded to  just any  " a currency or banking system "
When has the USD or our banking system been truly threatened? 2008 rings a bell, and after an initial shock that dropped gold from $1000 to $700 (all assets sold off 2nd half of 2008), it rocketed all the way to $1900 over the course of only 2 years. And I'm sure some people rebalanced out of gold as it climbed so high and are now re-buying at lower levels.

Who doesn't like that as a reaction to a currency/banking system threat?

And of course when the system gets fixed and there's a strong USD with no signs of inflation, you'd expect gold to do exactly what it's been doing for the past couple years. Until the next time...
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Re: The Reason to Quit PP

Post by mathjak107 » Wed Sep 23, 2015 4:29 pm

except treasury's reaction  to the event in 2008 blew golds out of the water .  as i said , another asset always did better .  TLT UP 34% , GLD 5%

Golds run up for whatever reason started way before in 2005. It then petered out , just the opposite in 2008.  Then it resumed again in 2009 . No one really knows why  , there are loads of guesses but it could have just been the bigger fool theory at work and based on nothing else.

without high inflation being present golds reaction to any news or events will be tepid if at all .  unless high inflation is in the works gold will not respond to much in an effective manner . there likely will always be something else that did a better job .

which is why bernstein said the flaw with the pp is it has  equal money in assets that have anything but an equal chance of playing out .
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Re: The Reason to Quit PP

Post by barrett » Wed Sep 23, 2015 7:24 pm

barrett wrote:
mathjak107 wrote: ... if harry was alive there is a good chance he would have revised the allocations because of golds behavior as a non respondent to uncertainty the last 40 years .
One step at a time, please. Can you please tell me where Harry Browne said that gold was chosen as a PP asset because it responds to "uncertainty"? What I remember is that he specifically said that it cannot be counted on to respond positively just because of "uncertainty". For the moment, let's leave aside whether or not it responds to inflation in the ways he predicted.
mathjak107 wrote: craigs web site

"Why do I want to own gold in my Permanent Portfolio?
Gold is a powerful asset that protects against inflation or threats of inflation. Gold also offers protection against problems that may threaten a currency or banking system.



i think we saw quite a few banking systems and currency's with problems the last 40 years .


the only thing gold will respond to is problems in the us dollar .  and perhaps high inflation in the us .  it  has not responded to  just any  " a currency or banking system "
mathjak,

Most of us on here are trying to have conversations. I ask you a question about Harry Browne and you give me a Craig Rowland quote. Really? I honestly think you have made some nice contributions on this forum, for example, with your input on annuities and references to Michael Kitces work. For the most part, however, you don't seem to even consider that what others have to say might merit some thought on your end.

You hate gold and LTTs right now. We get it. It's not as if none of us have ever considered the conditions under which certain assets are not the best performers.

Can't you contribute in other ways or does it always have to come back to slamming this portfolio? It has really gotten tiresome.
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Re: The Reason to Quit PP

Post by Reub » Wed Sep 23, 2015 9:36 pm

Barrett with all due respect I disagree.  What I find tiresome is the monolithic handholding here.  Someone who makes us question our beliefs is performing a great public service.
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Re: The Reason to Quit PP

Post by Cortopassi » Wed Sep 23, 2015 9:53 pm

mathjak107 wrote: except treasury's reaction  to the event in 2008 blew golds out of the water .  as i said , another asset always did better .  TLT UP 34% , GLD 5%

MJ,

What timeframe are you using to show 34 vs. 5%?  Here I think you may be conveniently cherry picking a timeframe?

For the entire year of 2008, TLT up 26% GLD up 2%

If you take that to the start of the market run, in 3/2009, TLT 9.5%, GLD 12.33%. 

Through 2009, TLT -4.7%, GLD 26.5%

Through now, almost dead even, see below (chart starts at 1/1/2008).

But almost invariably, a PPer who had this mix through that timeframe would have hit a 35% rebalancing band on gold, and it functioned exactly like it is supposed to.

In fact, with Peak to Trough, there would have been two rebalances for someone who started the PP on 1/1/2008.  Late 2008 was a rebalance because stocks hit the 15% band and early 2011 because gold hit the 35% band.  Seems to me the PP caught the low in stocks and the high in gold pretty damn closely!!

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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 4:11 am

i merely looked at 2008 on yahoo finance  , the year the crisis blew up . 

if you go beyond the event , well you have gold continuing its rise , stocks  starting to soar and take off and even TLT continuing its rise right up to jan 2015 with a bump or two along the way .  since all assets pretty much were hit all assets rose  , so if you are trying to show golds reaction to the banking crises  it did nothing special and in fact had started its rise years earlier  in 2005 .

gold solely  can not be counted on to react  to any negative news unless we already are in a high inflation period . otherwise there will always be other assets which reacted better which in the end is what  LT and equity's ended up doing . , .

which reinforces what i said , equal dollars in to unequal chances of playing out may not be the beast way  since golds window of opportunity short of the bigger fool theory with no reason behind it is very narrow and needs that special inflation scenario which at this point with the fed still below its mandated desired inflation level is still way out there in time . .
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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 4:23 am

barrett wrote:
barrett wrote:
mathjak107 wrote: ... if harry was alive there is a good chance he would have revised the allocations because of golds behavior as a non respondent to uncertainty the last 40 years .
One step at a time, please. Can you please tell me where Harry Browne said that gold was chosen as a PP asset because it responds to "uncertainty"? What I remember is that he specifically said that it cannot be counted on to respond positively just because of "uncertainty". For the moment, let's leave aside whether or not it responds to inflation in the ways he predicted.
mathjak107 wrote: craigs web site

"Why do I want to own gold in my Permanent Portfolio?
Gold is a powerful asset that protects against inflation or threats of inflation. Gold also offers protection against problems that may threaten a currency or banking system.



i think we saw quite a few banking systems and currency's with problems the last 40 years .


the only thing gold will respond to is problems in the us dollar .  and perhaps high inflation in the us .  it  has not responded to  just any  " a currency or banking system "
mathjak,

Most of us on here are trying to have conversations. I ask you a question about Harry Browne and you give me a Craig Rowland quote. Really? I honestly think you have made some nice contributions on this forum, for example, with your input on annuities and references to Michael Kitces work. For the most part, however, you don't seem to even consider that what others have to say might merit some thought on your end.

You hate gold and LTTs right now. We get it. It's not as if none of us have ever considered the conditions under which certain assets are not the best performers.

Can't you contribute in other ways or does it always have to come back to slamming this portfolio? It has really gotten tiresome.
Kbg wrote: That's what I like best about mathjak, selective history at its best. I'm not a big gold fan either, but I absolutely love his analysis on 70s/early 80s gold prices that will never happen again. While not as extreme, he seems to not be aware of the 2005-2011 run up of 400%+.  What I find even more fascinating is people who hang out on an investing board about a system they apparently have no belief in. I just don't see the point of it other than a cure for extreme boredom.
sophie wrote: Wow, a whole page and not one single mathjak post...

Judging by the criteria I've seen espoused here, it sounds like the ideal portfolio should be 100% Lending Club.  No down years for the vast majority of investors with > 200 notes, and you even get decent cash flow.

Of course you all should do no such thing, because the fundamentals of that investment are still not well understood and it could do very badly in the right economic conditions.  Just making the point that talking about performance and ignoring fundamentals is like the tail wagging the dog.


i pretty much expressed my views enough  , but folks keep bringing up my name and quoting things i said and so i respond  back .  is it only the believers  that can repeat the same stuff over and over  or drive looking in the rear view mirror at just the time frames they can single out to try to convince themselves or others  they made the right choice  .?


all that counts is how your own portfolio is doing while you own it .  not charts of what was , not words in a book predicting how things should play out  , ,.but your own experience  and are you satisfied with it and are there better choices that might  fit the future  better and more efficiently . ..


that question has forced me to get an education on integrating insurance products eventually in to our retirement mix which if i never questioned what my own path was i would have never looked in to  and would have just gone on believing my own bull-sh*t  and never realizing there are more efficient ways of doing things then i ever imagined 
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Re: The Reason to Quit PP

Post by iwealth » Thu Sep 24, 2015 7:16 am

mathjak107 wrote: i merely looked at 2008 on yahoo finance  , the year the crisis blew up . 

if you go beyond the event , well you have gold continuing its rise , stocks  starting to soar and take off and even TLT continuing its rise right up to jan 2015 with a bump or two along the way .  since all assets pretty much were hit all assets rose  , so if you are trying to show golds reaction to the banking crises  it did nothing special and in fact had started its rise years earlier  in 2005 .
Obviously the crisis wasn't limited to 2008. That was just when the shock occurred. The housing market started its decline in 2005. From 4th quarter 2005 to 1st quarter 2006, median home prices dropped 3.3% (source: Wikipedia). Things then proceeded to get MUCH worse in 2006 and beyond. And lo and behold, gold started its steep rise in mid-2005.

So I appreciate you bringing that up because it appears gold started to react long before the other assets in anticipation of impending doom. So again I ask what's not to like about that?
gold solely  can not be counted on to react  to any negative news unless we already are in a high inflation period . otherwise there will always be other assets which reacted better which in the end is what  LT and equity's ended up doing . , .
I think this statement has been debunked. Inflation was higher in 2005 than it is now, but mid-3.0%'s isn't exactly what you'd consider high inflation.
which reinforces what i said , equal dollars in to unequal chances of playing out may not be the beast way  since golds window of opportunity short of the bigger fool theory with no reason behind it is very narrow and needs that special inflation scenario which at this point with the fed still below its mandated desired inflation level is still way out there in time . .
Short window of opportunity, you want to buy low and get out at highs, something we can accomplish by using rebalancing bands.
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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 7:52 am

exactly my point about golds run up in  the 2,000's time frame .  the financial pundits have been finding all sorts of reasons for its sudden out of character rise . the reality it was more just the bigger fool theory , suddenly even grandma and grandpa were jumping on the gold band wagon .

everyone wanted to join the party and that perpetuated the price increase weven more .  the fact was there was no real basis for its rise and so it plunged right back down again  losing 40% of its gains and staying there . .  it was like nasdaq back in 2000 at 5000. it should have never been at that level .
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Re: The Reason to Quit PP

Post by Cortopassi » Thu Sep 24, 2015 8:01 am

Can't you say the exact same exact "bigger fool" thing about stocks runup to 2000?

Stocks and real estate to 2008?

Stocks runup until recently?

Are these not bigger fools as well, or these runups were all well founded?

I completely agree gold had some level of manic/blowoff top, but stocks have had 2 of those already this century, and if I were to predict (don't like to!) I see a 3rd right around the corner...

Is the only difference in your mind that stocks went down but didn't stay there?  Depending on your perspective... it took 13 years for the 2000 peak to be regained, without inflation factored in.

You look at peaks and valleys of GLD vs. SPY/VTI, the %s from tops to bottoms are not that much different.
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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 8:21 am

stocks were mixed in the 2000's .  the dot coms and tech stocks were for sure the bigger fool theory ., those that deserved to were gone or stayed down .  the funds i held had very little of those sectors so we saw little growth out of line .

when those sectors were soaring i cringed looking at how you did avoiding those sectors but in the end we never fell much since we missed that bubble .

all assets eventually go through times like that , after all didn't homes ?  those were prices that should never have been .

i don't give a hoot about peaks and valleys . as long as i am comfortable in that range i chose to allocate with in  i care about results .  it all boils down to your own portfolio results ,
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Re: The Reason to Quit PP

Post by Cortopassi » Thu Sep 24, 2015 8:29 am

Again, it sounds like you are/were a much more active investor than I want to be, looking at different sectors and deciding for yourself what you want to be exposed to.

Your experience, in my experience, is NOT typical.  I appreciate your insights, they just aren't in line with what I want to do with the PP.  I would have been much more open to the way you do things 10-20 years in the past.

-----------------------

I will say, right now (at this instant!) gold is starting to seem to perform a bit more as the safe haven, as there seem to be less and less safe havens around the world.  Not high fiving myself at $1145, but it does buffer the drop we are sure to see at least initially in the market in the next couple minutes.

----------------------

You know what perversely gives me the most pleasure?  Days like today, with gold and TLT up, and stocks down.  So when I hear the Wall Street numbers on the radio or TV, I feel like I am in a secret club that isn't affected by downturns in stocks since that is nearly 100% of the focus of the media.
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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 8:37 am

maybe 1 or 2 times a year we would swap  one of our funds for something that seems to fit better . nothing earth shattering but just a better fit  ,.

was it always correct ?  nope but it didn't have to be as you just didn't get the alpha on that 1 fund  , there were usually 4 others in the mix too ..  but since it did pick the better choice more often then not it out performed the s&p 500 by a wide margin for the decades i owned it and with no more than 30 seconds of time a week reading an update .
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Re: The Reason to Quit PP

Post by iwealth » Thu Sep 24, 2015 9:17 am

Cortopassi wrote: You know what perversely gives me the most pleasure?  Days like today, with gold and TLT up, and stocks down.  So when I hear the Wall Street numbers on the radio or TV, I feel like I am in a secret club that isn't affected by downturns in stocks since that is nearly 100% of the focus of the media.
I hear you, but it's tough to root against prosperity. If one can effectively use the PP as a means to preserve capital in bear markets before switching to a more prosperity tilted portfolio, then it makes sense to get excited. But otherwise, and I think this is one of mathjak's arguments, we're essentially just watching the PP assets gyrate around with no real overall progress forward. Enjoyment only comes from watching equity heavy portfolios suffer which you know, as you said, is perverse and a bit sadistic.

But that's the recency biased view of things. Historically the entire portfolio has always trended upward.
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Re: The Reason to Quit PP

Post by Tom » Thu Sep 24, 2015 9:22 am

Stocks down 6.37% YTD today, PP down 3.36% with treasuries rallying.  I would guess there's a good chance that by end of year stocks and the PP will be within striking distance of each other in either direction, but the PP never saw a 10% correction where you had to wonder where the bottom would be.  I'll take it.
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Re: The Reason to Quit PP

Post by Tom » Thu Sep 24, 2015 9:35 am

iwealth wrote:
Cortopassi wrote: You know what perversely gives me the most pleasure?  Days like today, with gold and TLT up, and stocks down.  So when I hear the Wall Street numbers on the radio or TV, I feel like I am in a secret club that isn't affected by downturns in stocks since that is nearly 100% of the focus of the media.
I hear you, but it's tough to root against prosperity. If one can effectively use the PP as a means to preserve capital in bear markets before switching to a more prosperity tilted portfolio, then it makes sense to get excited. But otherwise, and I think this is one of mathjak's arguments, we're essentially just watching the PP assets gyrate around with no real overall progress forward. Enjoyment only comes from watching equity heavy portfolios suffer which you know, as you said, is perverse and a bit sadistic.

But that's the recency biased view of things. Historically the entire portfolio has always trended upward.
It doesn't really matter how people feel (perversely or otherwise) about equity heavy portfolios suffering.  The point is that it happens and the PP can lessen the pain.  And yes, long term and historically the overall portfolio has in fact proven to trend upwards.  In the microview it may appear the assets are currently just gyrating around, but my guess is that's because the market has not figured itself out and no one knows which way is up.  Once there is a consensus on which direction things are headed, my guess is that one of the assets will become a super performer - which is why it does in fact historically trend upward.  It can just take a little bit of time for the winner to be decided in murky markets.
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Re: The Reason to Quit PP

Post by Pointedstick » Thu Sep 24, 2015 9:40 am

The elephant in the room is that all investments rely on the greater fool theory. Stocks, bonds, gold, houses... everything. It's not that there are no economic fundamentals, but all asset prices are heavily based on emotions and public opinion. Selecting one asset to point this out for obfuscates that it is true to for all assets--the only difference is the matter of degree.
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Re: The Reason to Quit PP

Post by mathjak107 » Thu Sep 24, 2015 9:46 am

Tom wrote: Stocks down 6.37% YTD today, PP down 3.36% with treasuries rallying.  I would guess there's a good chance that by end of year stocks and the PP will be within striking distance of each other in either direction, but the PP never saw a 10% correction where you had to wonder where the bottom would be.  I'll take it.
but that comparison is  to a 100% large caps fund  which would only be one fund in a diversified portfolio .

i show the more diversified insight growth model  down 1.27%  ytd  and that is 90% stock . nothing special , just an assortment of stuff covering all market segments .

the 70/30 growth and income model is down 1.79%

the income and capital preservation model 30% stock is only down  .78%.

diversified portfolio's had a lot more upside cushion when they fell so they are not nearly down as much as the s&p 500 alone .

typically after the s&p 500 has been the only game in town like last year it has taken 5 years of unwinding where it lagged midcaps and small caps every time . so once it again it was lagging the other indexes when things fell .

a diversified mix of large caps , small caps , reits and short term and intermediate term  bonds is really not down much ytd .    i miss the nice gains we had but ytd really nothing to speak of at this point .

if you really want to compare i see a lot lot less pain then the pp right now in the models,, even in the equity heavy growth model .

as you get closer to the more conservative 30% equity  model it is has  70% less loss then the pp  in this down blast ytd  .


that is because you are confusing volatility with losses and gains .

the pp is less volatile . but that does not mean at times it's losses won't be greater since other models develop bigger cushions from which they fall .


as i say , i don't give a hoot about peaks and valleys . if the  volatility matches my comfort level  that is all i care about in that regard . all the rest is about whether i am meeting my goals AND EXPECTATIONS FOR THAT ALLOCATION .
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Re: The Reason to Quit PP

Post by Tom » Thu Sep 24, 2015 11:10 am

mathjak107 wrote:
Tom wrote: Stocks down 6.37% YTD today, PP down 3.36% with treasuries rallying.  I would guess there's a good chance that by end of year stocks and the PP will be within striking distance of each other in either direction, but the PP never saw a 10% correction where you had to wonder where the bottom would be.  I'll take it.
but that comparison is  to a 100% large caps fund  which would only be one fund in a diversified portfolio .

i show the more diversified insight growth model  down 1.27%  ytd  and that is 90% stock . nothing special , just an assortment of stuff covering all market segments .

the 70/30 growth and income model is down 1.79%

the income and capital preservation model 30% stock is only down  .78%.

diversified portfolio's had a lot more upside cushion when they fell so they are not nearly down as much as the s&p 500 alone .

typically after the s&p 500 has been the only game in town like last year it has taken 5 years of unwinding where it lagged midcaps and small caps every time . so once it again it was lagging the other indexes when things fell .

a diversified mix of large caps , small caps , reits and short term and intermediate term  bonds is really not down much ytd .    i miss the nice gains we had but ytd really nothing to speak of at this point .

if you really want to compare i see a lot lot less pain then the pp right now in the models,, even in the equity heavy growth model .

as you get closer to the more conservative 30% equity  model it is has  70% less loss then the pp  in this down blast ytd  .


that is because you are confusing volatility with losses and gains .

the pp is less volatile . but that does not mean at times it's losses won't be greater since other models develop bigger cushions from which they fall .


as i say , i don't give a hoot about peaks and valleys . if the  volatility matches my comfort level  that is all i care about in that regard . all the rest is about whether i am meeting my goals AND EXPECTATIONS FOR THAT ALLOCATION .
Thanks condescending professor, but I didn't confuse anything nor did I use the word volatility or say there isn't a portfolio out there that is doing better than the PP right now.  I was merely using the S&P as a benchmark to compare the current PP performance to show that it's performance is not terrible.  I don't mean to be a dick, but I'm getting pretty tired of you.
iwealth
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Re: The Reason to Quit PP

Post by iwealth » Thu Sep 24, 2015 12:05 pm

mathjak107 wrote: that is because you are confusing volatility with losses and gains .
the pp is less volatile . but that does not mean at times it's losses won't be greater since other models develop bigger cushions from which they fall .
as i say , i don't give a hoot about peaks and valleys . if the  volatility matches my comfort level  that is all i care about in that regard . all the rest is about whether i am meeting my goals AND EXPECTATIONS FOR THAT ALLOCATION .
Quite a response to the simple and factual assertion that the PP has outperformed the S&P500 YTD. Another barrage of random statistics pertaining to a bunch of investment newsletter models that nobody here uses concluded by calling the original poster confused. Yes, there will always be some portfolio allocation performing better than another portfolio allocation. Got it, everyone's got it.

You are so dug in to your position that you can't even admit gold performed admirably during the financial crisis despite more than tripling from 2005 (start of the housing downturn) through 2011. Instead you choose to focus on bonds performing better for full-year 2008 and that gold is down 40% from the 2011 peak. True and true, but neither of those facts detracts from the incredible boost gold provided to portfolios during that 6-year timeframe which of course was captured by PP investors via rebalancing.
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