Gyroscopic Investing

This looks like a very problematic time to be heavily invested in equities. But the PP is doing just fine. I just hope that mathjak, Budd and others are sleeping well right now. This could be a very, very bad year for stocks!

Jeff Gundlach now saying that this is a capital preservation environment,  not a speculative one. Predicts $1400 gold. Didn't see his bond prediction but I would guess that it's bullish.


http://www.bloomberg.com/news/articles/ ... pportunity


Here's a better link :
http://www.businessinsider.com/jeff-gun ... -12-2016-1

Reub wrote: This looks like a very problematic time to be heavily invested in equities. But the PP is doing just fine. I just hope that mathjak, Budd and others are sleeping well right now. This could be a very, very bad year for stocks!

Reub, sleeping just fine as long as the PP continues to weather the storm. I expect my 70/30 AA to decline along with equities and am prepared to re-balance accordingly. I would NEVER hold 70/30 in taxable as I am not prepared to watch the "money I cannot afford to lose" evaporate.

Reub wrote: This looks like a very problematic time to be heavily invested in equities. But the PP is doing just fine. I just hope that mathjak, Budd and others are sleeping well right now. This could be a very, very bad year for stocks!

I'm still working, about 2 or so years from retirement, and contributing to a 401k and most of the new money goes into stocks.

Au Contraire, I think this could be a good year for stocks. Buy low, sell high.

I think it's going to end in tears.

Same story, different day. Buy stocks and shed gold and treasuries like the plague. Not sure what we are all rejoicing, the PP is not positive, but less negative that an equity rich portfolio.

Had to know once someone thanked God for the PP that the next day TLT and gold get killed!  It is a ying yang lately that is going nowhere fast. 

I'm starting to feel the great sub 1000 washout in gold is coming soon.

It's going to be a long year.

Cortopassi wrote: Had to know once someone thanked God for the PP that the next day TLT and gold get killed!  It is a ying yang lately that is going nowhere fast. 

I'm starting to feel the great sub 1000 washout in gold is coming soon.

HA HA I was the gold bear, but now I'm thinking if gold just goes sideways throughout much of 2016, by 2017 I'll just buy enough to make up 5% of my portfolio and be done with it. I need the portfolio insurance.

MediumTex wrote: It's going to be a long year.

Are you being serious?

Reub wrote:

MediumTex wrote: It's going to be a long year.

Are you being serious?

If we are going to lament every time the PP has a bad day, sometimes several times a day, then yeah, it's going to be a long year.

The PP really ought to be about peace of mind.  That's one of its biggest selling points, but people seem to fret about it just as much as other strategies with WAY more volatility.  Maybe fretting about investments is just a habit some people have and it's hard to shake no matter how safe a strategy they are using.

MediumTex wrote:

Reub wrote:

MediumTex wrote: It's going to be a long year.

Are you being serious?

If we are going to lament every time the PP has a bad day, sometimes several times a day, then yeah, it's going to be a long year.

The PP really ought to be about peace of mind.  That's one of its biggest selling points, but people seem to fret about it just as much as other strategies with WAY more volatility.  Maybe fretting about investments is just a habit some people have and it's hard to shake no matter how safe a strategy they are using.

Exactly, which is why we really need to characterize each portfolio by it's Dragon Ratio:

Fretting Quotient / Expected Return

For example, the S&P500 is expected to return around 9%, with daily fretting, or 365/9 = 40.6 Dragons

The PP, on the other hand, is expected to return around 8%, with daily fretting, or 365/8 = 45.6 Dragons

Clearly, the S&P500 gives you more Dragons (more Dragons is better).

I just don't watch the market.  Actually nowadays I don't even really check the forums.

I made it through the last crash through automatic investment and ignorant bliss.  This resulted in some pretty fantastic returns.

Bean wrote: I just don't watch the market.  Actually nowadays I don't even really check the forums.

I made it through the last crash through automatic investment and ignorant bliss.  This resulted in some pretty fantastic returns.

+1 on this...  i don't watch cnbc... sometimes i don't even watch the news... and i have my modified PP,  and trade stocks and have good returns...

if you remember few years, ago people worry worried QE was gonna cause hyperinflation, yada, yada, end of world... look where we are now oil dropping like crazy?
so if you really think about it, if you watch too closely your gonna panic and make a bad decision.
pundits are always wrong.

The PP is such a wonderful concept, that you really won't panic if you truly understand it.  although i don't agree on holding gold anymore (but that's my opinion)

People are wondering why TLT goes up, people aren't buying for the coupon, their buying it for price movement and volatility... simple said its doing what it suppose to be doing...

in my opinion its great stocks are crashing, you want crazy volatility in bonds,stocks,gold  that's how the PP makes a good return..

MediumTex wrote: It's going to be a long year.

You're right.  2016 is a Leap Year!

MangoMan wrote:

sk55 wrote:

Bean wrote: I just don't watch the market.  Actually nowadays I don't even really check the forums.

I made it through the last crash through automatic investment and ignorant bliss.  This resulted in some pretty fantastic returns.

+1 on this...  i don't watch cnbc... sometimes i don't even watch the news... and i have my modified PP,  and trade stocks and have good returns...

if you remember few years, ago people worry worried QE was gonna cause hyperinflation, yada, yada, end of world... look where we are now oil dropping like crazy?
so if you really think about it, if you watch too closely your gonna panic and make a bad decision.
pundits are always wrong.

The PP is such a wonderful concept, that you really won't panic if you truly understand it.  although i don't agree on holding gold anymore (but that's my opinion)

People are wondering why TLT goes up, people aren't buying for the coupon, their buying it for price movement and volatility... simple said its doing what it suppose to be doing...

in my opinion its great stocks are crashing, you want crazy volatility in bonds,stocks,gold  that's how the PP makes a good return..

Care to share your modified PP allocation? Thanks

66/33?

Equities may continue to fall further, but at market close I am re-balancing retirement accounts back to 70/30.
Exchanging 3.5% of total portfolio from stable value to the following mutual funds.

VINIX (S&P500),
FSEVX (Extended Market),
AVFIX (SC Value)
VWILX (International LC)

PP stability has enabled me to more aggressively purchase stocks during the recent decline.

sk55 wrote: The PP is such a wonderful concept, that you really won't panic if you truly understand it.  although i don't agree on holding gold anymore (but that's my opinion)

So in other words, you say the PP is a wonderful concept that prevents panic, but you won't follow it. 

buddtholomew wrote: Equities may continue to fall further, but at market close I am re-balancing retirement accounts back to 70/30.
Exchanging 3.5% of total portfolio from stable value to the following mutual funds.

VINIX (S&P500),
FSEVX (Extended Market),
AVFIX (SC Value)
VWILX (International LC)

PP stability has enabled me to more aggressively purchase stocks during the recent decline.

Why not wait for some sort of stability before rebalancing back into equities? Some of my sources are saying that stocks still look bearish.

Reub wrote:

buddtholomew wrote: Equities may continue to fall further, but at market close I am re-balancing retirement accounts back to 70/30.
Exchanging 3.5% of total portfolio from stable value to the following mutual funds.

VINIX (S&P500),
FSEVX (Extended Market),
AVFIX (SC Value)
VWILX (International LC)

PP stability has enabled me to more aggressively purchase stocks during the recent decline.

Why not wait for some sort of stability before rebalancing back into equities? Some of my sources are saying that stocks still look bearish.

20 years from now it won't matter much.
3.5% is the 1st of several re-balancing moves when/if necessary.
50% decline in new money added is less than 2% loss of entire portfolio. Not significant.
Know I will never catch the bottom.

MangoMan wrote:

sk55 wrote:

Bean wrote: I just don't watch the market.  Actually nowadays I don't even really check the forums.

I made it through the last crash through automatic investment and ignorant bliss.  This resulted in some pretty fantastic returns.

+1 on this...  i don't watch cnbc... sometimes i don't even watch the news... and i have my modified PP,  and trade stocks and have good returns...

if you remember few years, ago people worry worried QE was gonna cause hyperinflation, yada, yada, end of world... look where we are now oil dropping like crazy?
so if you really think about it, if you watch too closely your gonna panic and make a bad decision.
pundits are always wrong.

The PP is such a wonderful concept, that you really won't panic if you truly understand it.  although i don't agree on holding gold anymore (but that's my opinion)

People are wondering why TLT goes up, people aren't buying for the coupon, their buying it for price movement and volatility... simple said its doing what it suppose to be doing...

in my opinion its great stocks are crashing, you want crazy volatility in bonds,stocks,gold  that's how the PP makes a good return..

Care to share your modified PP allocation? Thanks

50/50    SPY/TLT 

i use ETFs sometimes i'll turn it into a covered call... if its down to generate income..

and i keep a decent amount cash on the side for dips...

sk55 wrote:

MangoMan wrote:

sk55 wrote: +1 on this...  i don't watch cnbc... sometimes i don't even watch the news... and i have my modified PP,  and trade stocks and have good returns...

if you remember few years, ago people worry worried QE was gonna cause hyperinflation, yada, yada, end of world... look where we are now oil dropping like crazy?
so if you really think about it, if you watch too closely your gonna panic and make a bad decision.
pundits are always wrong.

The PP is such a wonderful concept, that you really won't panic if you truly understand it.  although i don't agree on holding gold anymore (but that's my opinion)

People are wondering why TLT goes up, people aren't buying for the coupon, their buying it for price movement and volatility... simple said its doing what it suppose to be doing...

in my opinion its great stocks are crashing, you want crazy volatility in bonds,stocks,gold  that's how the PP makes a good return..

Care to share your modified PP allocation? Thanks

50/50    SPY/TLT 

i use ETFs sometimes i'll turn it into a covered call... if its down to generate income..

and i keep a decent amount cash on the side for dips...

So in other words, a 50-50 Boglehead allocation.

Not that there's anything wrong with that, but it has nothing to do with the PP.

I am thinking it might be a good time to go TLT and IAU now.

lordmetroid wrote: I am thinking it might be a good time to go TLT and IAU now.

Why?

If anything, now seems like the time to be buying stocks, not selling them.

MediumTex wrote:

lordmetroid wrote: I am thinking it might be a good time to go TLT and IAU now.

Why?

If anything, now seems like the time to be buying stocks, not selling them.

I already sold my stocks at the top, in due time I will of course return to stocks when the trend has reversed but meanwhile I will either have my capital in cash or I should take a chance with some fixed income.