Gyroscopic Investing

Let's do an experiment.  Since Mathjak seems to know the appropriate mix of assets to hold at all times and the correct times to get in and out of them, let's track it!  Mathjak, please post your current allocation pick and let us know when it changes.  We'll track it against the PP.  Only what's said here as to what you're actually doing will count - not offhanded comments in other threads that can later be cherry picked - it's not official unless it's said here!

Let's see what happens!

the version as it stands now : 09/27 was last update  since it uses  managed funds . it will be lower after today of course .

fidelity contra .  15% up 1.38% ytd

fidelity blue chip growth FBGRX 15%  up .70% ytd

-vanguard total market index vti 10%  minus  - 4.69 ytd

vanguard extended market index vxf  5%  minus 4.3% ytd

vanguard veu all world index etf  5%  minus 7.17

that is the equity side.

the bond side uses

vanguard admiral total bond fund 25% - up .71

fidelity floating rate high yield 10% up 1.31 ytd

vanguard bsv short term bond 10%    up 1.24%

vanguard vtip short term inflation proof bond etf 5%  up  .10 ytd

mathjak107 wrote: the version as it stands now : 09/27 was last update  since it uses  managed funds . it will be lower after today of course .

fidelity contra .  15% up 1.38% ytd

fidelity blue chip growth FBGRX 15%  up .70% ytd

-vanguard total market index vti 10%  minus  - 4.69 ytd

vanguard extended market index vxf  5%  minus 4.3% ytd

vanguard veu all world index etf  5%  minus 7.17

that is the equity side.

the bond side uses

vanguard admiral total bond fund 25% - up .71

fidelity floating rate high yield 10% up 1.31 ytd

vanguard bsv short term bond 10%    up 1.24%

vanguard vtip short term inflation proof bond etf 5%  up  .10 ytd

Have you worked out your cumulative profit/loss YTD? And what market conditions would cause you to ditch this portfolio and adopt another one?

no , because i switched portfolio's in june- july .  i was using the fidelity insight models for decades  up until june when i thought i would use the pp.

after a few days of watching the pp and re-evaluating things i decided not to go tht route .

my feeling was with weak equity returns expected i did not want the other parts of the portfolio  grabbing them by the collar and yanking them back . so i put my own model together  since fidelity insight, which i was using  did not offer a  50/50 MIX  I WAS forced  to run two models a 70/30 mix and a 30/70 mix blended together  to get the 50/50 mix i wanted for retirement and that was to cumbersome  since a few funds overlapped .  it was easier to just make up my own model .

but if you want make it easy , just track the above ytd  that way we can standardize against the pp year to date ..


by the way , i heard an interview today with michael cuggino from the permanent portfolio on bloomberg radio .  they asked how he is responding to events these days .

his answer was improving quality and shortening up duration's on bonds .

I'm a little confused since the PP is handily beating a 50/50 allocation YTD. The PP is not positive, but its certainly less negative.

don't be so sure about that , do the math . don't forget  these funds were way  higher and although we gave up  the gains we are not negative to badly . blue chip growth and contra were way up  well above the index funds before falling and they stayed positive right up until today . TLT is negative for the year . the shorter term bond funds are still up .

the  index funds  and veu were negative but the rest was all slightly positive  up until today .


while yes the total fall would be more the gains provided a much bigger cushion for the fall .


but the down turn is not where the model should shine . it is in the recovery once we hit bottom
.

mathjak107 wrote: don't be so sure about that , do the math . don't forget  these funds were way  higher and although we gave up  the gains we are not negative to badly . blue chip growth and contra were way up  well above the index funds before falling and they stayed positive right up until today . TLT is negative for the year . the shorter term bond funds are still up .

the  index funds  and veu were negative but the rest was all slightly positive  up until today .


while yes the total fall would be more the gains provided a much bigger cushion for the fall .

.

I'm sure of it. Hint: I'm not including the blue chip growth and contrafund in my analysis.

well do the math if you insist .  i bet the pp is down 3% or better and i think i will average out today in the minus 2% range . but the fall should be greater . but recovery should be a whole lot faster and greater . it is expected ta 50/50 mi should fall farther ..  want to bet who turns positive first ?

mathjak107 wrote: well do the math if you insist .  i bet the pp is down 3% or better and i think i will average out today in the minus 2% range .

Don't assume you're talking to someone who hasn't done their homework. I maintain 2 portfolios and calculate YTD totals to 2 decimal places. I don't use range or better in my accounting.

well did you do mine which is what this is about ?

mathjak107 wrote: well did you do mine which is what this is about ?

Nope. Don't really care to.

well then you can't comment because it isn't about just a 50/50 mix. a 50/50 mix is quite different from my model since the funds occasionally are  changed and it isn't strictly indexing which in comparison to the  managed funds i use sucked this year . .  in fact i may swap the 2 index funds out for fidelity export and multinational , they just got an excellent new manager and  also fidelity disciplined equity fund .

they too have a new manager and  i like the new weightings in the two funds compared to  vti and the extended market fund . but for now no change . .

fidelity blue chip growth and contra still had positive returns right up until today . the indexes were negative anywhere from 4 to 6% depending on the index .  big difference  between funds right now ,.

So at this point we're not only talking about indexing but also managed funds versus the performance of the PP. This is where I step out of the room.

well note the title on the thread .

tom asked me to post the portfolio i use and the changes as i make them . it wasn't about anything else .

I'll play this game. I'm 50% cash and 50% intermediate bonds now. I got out when S&P500 was about 1950


keywords so I can find this thread later when it's time to re-invest: mebane faber ivy timing 10 month moving average ochotona

mathjak107 wrote: well note the title on the thread .

tom asked me to post the portfolio i use and the changes as i make them . it wasn't about anything else .

Yep, that's the game.  Whatever you're using, funds or not.  Will be interesting to see.  The key is to properly track when and how much you by and sell in and out of things, regardless of how much or often.

you got it! 

mathjak107 wrote:

tom asked me to post the portfolio i use and the changes as i make them . it wasn't about anything else .

MJ, out of curiosity, how did you respond to the market crashes of 2000-02 and 2008?

great question .

first i will tell you what my gut reaction would have been . i think my gut reaction would have been , when there is a fire run for the exits .

but the fact that  by following the newsletter  i did not have to concern myself at all with portfolio decisions and so we just turned off all the noise , went about our lives and spent all of 30 seconds a week seeing if there were any fund swaps .

by the time i took an interest in listening to he noise we were well on the way to recovery .  in the end it was a non event .

Mathjak, I believe that you are going to seriously outperform the PP from today to the end of the year!

Kudos to Mathjak for accepting the troubles of posting any changes here and the accountability of putting his money where his mouth is in a sense. Will be fun to watch!

i will also post the insight weekly results since those they post daily and are easy for me to just grab and run  for a point of reference 
. they post after 8pm .

perhaps if you are happy with those numbers you may want to give them a shot .

okay here are the fidelity insight results for comparison . it is a very popular newsletter that uses only managed fidelity funds and i have been using it for decades right up until i retired .



the growth model which is 100% equity  is now down -3.34% ytd .

to give you an idea of performance , 100k  12/31/1986 is now 2 million .

all the models have different dates they were created and put live ..

the growth and income model which is 68% equity the rest assorted bond funds (intermediate term is down 2.78%    started 12/31/1993 100k is now 560,000

the income and capital preservation model , which is more conservative than the pp at 25% equity and the rest assorted bond funds ranging from short to intermediate down 1.18%  started 12/31/1991 , 100k  is 360k today

where is the 4x4 pp ytd  ?  i would think down about 4% or so ?

what would the pp returns have been in comparison for those years ?

mathjak107 wrote: okay here are the fidelity insight results for comparison . it is a very popular newsletter that uses only managed fidelity funds and i have been using it for decades right up until i retired .

Does it use momentum to rotate into the different funds?

no not all . it just looks at the big picture and matches a funds weighting . maybe we have 2 or 3 fund swps at most a year .