Any Changes for the New Year?

[dualstow]

It has been a poor year, hasn't it?

http://i.imgur.com/zrsLnBh.jpg

Was PRPFX really down 12%?

[barrett]

Cortopassi,

My first reaction is that if you are pondering a change, then I should stand pat! Although I have to admit
that I take offense at suggestions by you and Dualstow that your market intuition is worse than mine.

Seriously though, you are still relatively young and a lower cash position can probably make sense. From my perspective,
that cash is in the PP for two main reasons. First it gives you all kinds of flexibility to handle big life events like job loss,
college or housing expenses, the wedding of a kid, etc. The 2nd reason though is that it allows one to pounce if there is
another 2008-style crash. There may be another assets to sell down but it's not guaranteed.

My own feeling is that there just may be a few years of paltry returns as discussed in other threads. I am staying balanced
but please refer back to the above statement. Might be time to fiddle with percentages due to my track record.

[Cortopassi]

It has been a poor year, hasn't it?

http://i.imgur.com/zrsLnBh.jpg

Was PRPFX really down 12%?

Looks like there was a big dividend/cap gain early Dec. which dropped the share price.  Don't think what you are thinking is correct.

[Cortopassi]

Cortopassi,

My first reaction is that if you are pondering a change, then I should stand pat! Although I have to admit
that I take offense at suggestions by you and Dualstow that your market intuition is worse than mine.

Seriously though, you are still relatively young and a lower cash position can probably make sense. From my perspective,
that cash is in the PP for two main reasons. First it gives you all kinds of flexibility to handle big life events like job loss,
college or housing expenses, the wedding of a kid, etc. The 2nd reason though is that it allows one to pounce if there is
another 2008-style crash. There may be another assets to sell down but it's not guaranteed.

My own feeling is that there just may be a few years of paltry returns as discussed in other threads. I am staying balanced
but please refer back to the above statement. Might be time to fiddle with percentages due to my track record.

barrett, Happy New Year,

I'm basically going to start the process by pushing cash I have been accruing in 401k and IRA accounts into SCV an EM and see where the percentages fall.  It's cash I couldn't really touch anyway.  I have no interest in waiting to pounce on a crash that may or may never come.  I waited years after 2009 for hyperinflation, gold going to the moon, the market crumbling and that got me less than nowhere.

It's been a slow process for me, but in the near 2 years with the PP I am calmer.  I am less agitated (actually rarely nowadays) when I hear AMZN is almost $700 (you've got to be kidding, right? ) and gold is barely holding above $1000.  It would have killed me daily to see and hear these things between 2009 and 2013.  Now it's like, eh, whatever. 

My goal in 2016 is to slowly shift some of these allocations and see if I can keep my sanity when every move I make is guaranteed to start off in the red!

[rickb]

It has been a poor year, hasn't it?

http://i.imgur.com/zrsLnBh.jpg

Was PRPFX really down 12%?

Looks like there was a big dividend/cap gain early Dec. which dropped the share price.  Don't think what you are thinking is correct.

The perf charts from stockcharts.com are dividend adjusted, see http://stockcharts.com/freecharts/perf.php?prpfx

Looks like it's down about 6% for the year.

[Cortopassi]

My advice would be to get rid of your cash and LTT and go with intermediate treasuries for 50% of your portfolio.
That way, the drag of 0% cash won't be as painful.
I would also advise resizing your pictures/charts to 400 pixel width for better readability.

Got you on the pics.

Not sure on the allocation advice?  My tentative allocation would bring LTT/cash/STT to 35% from 50, and I am applying the rest to a higher stock allocation.  Are you basically advising against a higher stock allocation?  Why intermediate?  LTT(TLT) down about 4% or so for the year, Intermediate (VBILX) down 2%, STT a ittle down.  Doesn't it all wash out if I have 25/25 LTT/STT vs 50% INT?

[barrett]

My advice would be to get rid of your cash and LTT and go with intermediate treasuries for 50% of your portfolio.
That way, the drag of 0% cash won't be as painful.

Pug, Is this what you have done? Sort of a gold-heavy/stock-light Desert Portfolio? I've contemplated shortening up treasury duration but it's because I have some other deflation protection (slew 'o savings bonds) that can't fit neatly into a 4X25.

[Cortopassi]

Pug,

No need for me to rush into anything.  I'll probably just start by adding a few small % into SVC or EM and slowly see how things go.

Happy New Year!

Mike

[ochotona]

FWIW, even though I am using Dual Momentum, for my wife's IRAs I have her in buy-and-hold 30% equities, 70% bonds (2/3 US Treasures, 1/3 investment grade corporates) at this time. I think the PP equity allocation is prudent now, for a buy-and-hold person. If there is a bear market in the couple of years, the plan is to get her back up to a 60/40 stance.

[sophie]

Whatever your desired allocation to stocks and gold, the remainder could go into ITT to save you the pain of no interest cash.

My PP has about 30% cash at the moment, and I'm quite happy about that - although it'll go down after the annual retirement account contributions get invested.  Based on its performance in 2015 I'm not sure holding it qualifies as "pain."  It's hard to predict of course, but you may well be do best to hang onto your cash in 2016.  Also, you can improve returns a bit by holding I Bonds and keeping some cash in online savings accounts. 

I was actually thinking the opposite:  whether to hold money earmarked for bonds in cash until the Fed is finished raising interest rates.  Anyone know the latest gossip??  This article suggests that we should expect as many as four more quarter point rate increases over the next year, so that the Federal funds rate will be in the 1-1.3% range by this time next year:

http://www.thestreet.com/story/13405598 ... think.html

[Reub]

Sophie, I believe that is the Fed's plan. But they said that it's data dependent  so who knows? I'm remembering back to 2000 and 2008, the last times that we had the final year of a two term Presidency, and to how the markets crashed as the Administrations were leaving office. It was as if somebody had pulled the plug! That might change the Fed's plans if it happens again. Happy New Year!

[Cortopassi]

It'll be interesting to see if there is a big bounce-back tomorrow, like what seemingly has happened for years now, or if this is the start of something bigger.  Gold and TLT were nice to hold today, and I made no moves yet to increase my stock %.

[EdwardjK]

In 2015, my entire portfolio decreased by $156K.  The Permanent Portfolio portion accounted for $143K of that loss. Even with its lower volatility, I would have been better off with my money in the bank.

[dutchtraffic]

In 2015, my entire portfolio decreased by $156K.  The Permanent Portfolio portion accounted for $143K of that loss. Even with its lower volatility, I would have been better off with my money in the bank.

Absolute numbers mean nothing obviously.

ps: when you do find that portfolio that never goes down, make sure to post it here 

[EdwardjK]

In 2015, my entire portfolio decreased by $156K.  The Permanent Portfolio portion accounted for $143K of that loss. Even with its lower volatility, I would have been better off with my money in the bank.

Absolute numbers mean nothing obviously.

ps: when you do find that portfolio that never goes down, make sure to post it here 

Well, thanks Dutchtraffic. Nothing like an anal comment to start off the New Year!

[dutchtraffic]

In 2015, my entire portfolio decreased by $156K.  The Permanent Portfolio portion accounted for $143K of that loss. Even with its lower volatility, I would have been better off with my money in the bank.

Absolute numbers mean nothing obviously.

ps: when you do find that portfolio that never goes down, make sure to post it here 

Well, thanks Dutchtraffic. Nothing like an anal comment to start off the New Year!

No problem