Gyroscopic Investing

I have tried to keep a permanent portfolio for the last year and I have concluded it is not a portfolio that suits me. I am unable to sit idle and am always poking and tuning. Which does more harm than good for a permanent portfolio strategy.

I think it's good to split one's assets between active and passive. That way you can stay engaged and feel that you're making a difference. The passive portion is in case you're not making a difference, but actually harming! (a bet against yourself).

Have you decided on your new asset allocation?

I hope you keep posting anyway.

Lordmetroid is the best screen name ever.

AdamA wrote: I hope you keep posting anyway.

Lordmetroid is the best screen name ever.

I agree.

Good luck with whatever allocation you decide on.

buddtholomew wrote: Have you decided on your new asset allocation?

I will try to the dual momentumstrategy, it seems more suitable for someone with my personality.

AdamA wrote: I hope you keep posting anyway.

Lordmetroid is the best screen name ever.

I will be here, this forum is awesome, thank you.

Look at Mebane Faber's papers, downloadable for free from SSRN. If you read them, the Ivy Portfolio book is redundant. I am giving that strategy a go. Also building a small taxable PP on the side as an emergency & retirement fund.

if you have intentions of using the pp as a bridge portfolio in retirement if delaying ss be careful .

as an example i am living off my portfolio now while delaying . if we have an extended downturn and i blow through the cash , the next line of defense to refill cash is my short to intermediate term bond funds . the last thing i would want as a 2nd line of defense is bonds that can be more volatile if rates rise then the stocks i am trying to delay selling .

because you may wan to spend down that bridge portfolio possibly in an order of volatility to buy time in this case  it is important to not have assets with all the same volatility levels .

in the long term bucketizing , the order you spend vs pulling equally from the pie does not matter , it equals out . short term may not work out so well in that regard  so you may want to be able to have buckets that step up in volatility so the most volatile get spent last in the short term bridge portfolio ..

TennPaGa wrote:

AdamA wrote: I hope you keep posting anyway.

Lordmetroid is the best screen name ever.

I concur with your first point. 

But on your second point, I counter with:

Although that is an excellent screen name, it relies heavily on the icon.  Lordmetroid, in  my opionion, is better if only using text to judge.

Also, let's not forget about kobe1, who I think had a picture of kobe bryant with a lightsaber as his icon at one point. 

Not a lot of Jedi on the forum any more.  I feel a disturbance in the Force. 

But Jedi was a nice pun on Jed, whereas Kobe is not. Unless there's some obscure Star Wars character that a casual fan like me would miss.
Oh, Kobe1, Obi Wan. I get it, I get it. Nice. 

To each their own, but sounds like capitulation to me..........A turn in gold must be approaching.

i think it can see a short term pop  which is why for my monthly speculation i was thinking of going with gld . went with exxon instead but i think after falling another 10% ytd  gold may be a bit over sold .

nothing i would hold longer than a quick pop and i am out .

finster869 wrote: To each their own, but sounds like capitulation to me..........A turn in gold must be approaching.

I think "must" is a bit strong, but I agree that the sentiment is horrible, which usually means we are nearer a bottom than a top.

finster869 wrote: To each their own, but sounds like capitulation to me..........A turn in gold must be approaching.

I live in Sweden and Gold is positive in SEK so gold has nothing to do with it. It is all about my personality, I can't keep a passive strategy passive. I am always watching it and poking in it. Without my doing so, I would have had a positive year but I have ended up with a result of -2% so I need to change strategy that suits my personality better.

The only way I could possibly keep calm and not rock the boat is if I am invested in the winner. So this Dual momentum strategy will probably suit me very well.

lordmetroid wrote:

finster869 wrote: To each their own, but sounds like capitulation to me..........A turn in gold must be approaching.

I live in Sweden and Gold is positive in SEK so gold has nothing to do with it. It is all about my personality, I can't keep a passive strategy passive. I am always watching it and poking in it. Without my doing so, I would have had a positive year but I have ended up with a result of -2% so I need to change strategy that suits my personality better.

This is an impressive and mature thing to be able to say. Congrats! Keep us in the loop about your future portfolio plans!

lordmetroid wrote:

finster869 wrote: To each their own, but sounds like capitulation to me..........A turn in gold must be approaching.

I live in Sweden and Gold is positive in SEK so gold has nothing to do with it. It is all about my personality, I can't keep a passive strategy passive. I am always watching it and poking in it. Without my doing so, I would have had a positive year but I have ended up with a result of -2% so I need to change strategy that suits my personality better.

The only way I could possibly keep calm and not rock the boat is if I am invested in the winner. So this Dual momentum strategy will probably suit me very well.

I look forward to updates on how it does over the next few years.

Trend following the stocks, long bonds, and gold of the PP has been shown to work. That could keep you busy.

dualstow wrote: But Jedi was a nice pun on Jed, whereas Kobe is not. Unless there's some obscure Star Wars character that a casual fan like me would miss.
Oh, Kobe1, Obi Wan. I get it, I get it. Nice. 

Aw shucks guys, it's nice to be remembered.  FYI, the Jedi are not gone, we are just lurking in the shadows.

Knowing you can't help but tinker requires a great deal of self awareness, but I wonder if committing to tinkering is the best solution for everyone. For example, what if you could force yourself to not touch it for X years, bearing exceptional circumstances? I'm pretty sure you could set something like that up with a trust of some kind where you no longer retain any ownership in the trust, but the expenses probably only make sense for portfolios of a certain size. But then again, given the likely costs of tinkering long term, the portfolio size probably isn't as large as you might think in order to net out ahead (not to mention the asset protection bonus, whatever that's worth).

I wonder if there are cheaper ways to do the same thing without setup a trust? Maybe something around "fooling" yourself so that it's not as ironclad as a trust, but you setup some kind of huge pain in the ass requires in order to tinker. For example, you add a family member to the account, ideally someone who really doesn't care about investments, and then you have the mail/communication all forwarded to them. I wouldn't want to do something like that with all my money, but a portion of it? Sounds appealing. Unfortunately the details of executing something like this are murky enough that I've never acted on it...I wonder if there's a very straightforward way of doing it...

Well I concluded today that the PP isn't for my wife, at least. She's 17 years younger than me (age 49) and when I went with the PP I set up her  IRA as the bond/cash/gold portion of her PP with the stock portion being in her company 401k. As of yesterday she was down about 10%.

So I sold the gold ETF's and the lower interest rate LT's in her IRA and bought FCNTX (Fidelity Contrafund). Will keep an eye on it for a while before tinkering with my own IRA (Down about 8% because it's also gold/cash/bond).

I'm confused by that Fidelity contrafund. The description says it invests in overlooked stocks, and then I look at the top 10 holdings:

FACEBOOK INC A
BERKSHIRE HATHAWAY INC CL A
APPLE INC
WELLS FARGO & CO
GOOGLE INC CL A
GOOGLE INC CL C
AMAZON.COM INC
VISA INC CL A
DISNEY (WALT) CO
STARBUCKS CORP

WTF?

You mean you've heard of Apple and Facebook!?!??!! I'd better sell!

Sam Brazil wrote: I'm confused by that Fidelity contrafund. The description says it invests in overlooked stocks, and then I look at the top 10 holdings:

FACEBOOK INC A
~

WTF?

Heh heh.  I think they mean overlooked opportunities, not unheard-of companies.

As a result, our investment approach seeks companies we believe are poised for sustained, above-average earnings growth that is not accurately reflected in the stocks' current valuation.

- From the Commentary tab at https://fundresearch.fidelity.com/mutua ... /316071109

Every damn fund is in the same boat.  If the market tanks (it never will be allowed to ever again....!) tons of funds will get destroyed.  I would bet 80% of long funds out there own sizable %s in AAPL alone.

Sam Brazil wrote: I'm confused by that Fidelity contrafund. The description says it invests in overlooked stocks, and then I look at the top 10 holdings:

FACEBOOK INC A
BERKSHIRE HATHAWAY INC CL A
APPLE INC
WELLS FARGO & CO
GOOGLE INC CL A
GOOGLE INC CL C
AMAZON.COM INC
VISA INC CL A
DISNEY (WALT) CO
STARBUCKS CORP

WTF?

keep in mind those lists of what they own are months old as well . they may no longer even own what they show as holdings . one of the reasons i like the newsletter is they stay on top of major position changes  in funds way before the listings which go obsolete pretty quick .

on your own you can buy a bunch of fidelity growth funds and have such overlap . the newsletter at least tries to prevent that as much as possible although keeping up with daily position changes is impossible except for the largest changes .. . .