Permanent Portfolio is only for US

General Discussion on the Permanent Portfolio Strategy

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Pointedstick
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Re: Permanent Portfolio is only for US

Post by Pointedstick » Sat Feb 13, 2016 4:53 pm

frugal wrote: Hello,

so, outside of USA what is the alternative to PP?

Thank you.
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lordmetroid
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Re: Permanent Portfolio is only for US

Post by lordmetroid » Sat Feb 13, 2016 6:06 pm

frugal wrote: Hello,

so, outside of USA what is the alternative to PP?

Thank you.
At the moment I have no good answer, I am trying to figure out what to do now.
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Re: Permanent Portfolio is only for US

Post by LazyInvestor » Sat Feb 13, 2016 11:44 pm

Any of the passive portfolios will most likely do just fine over the long term (including EU-PP). So just stick with what you have decided on and use these discussions only to further your understanding and confidence in whatever portfolio you have chosen.
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Dieter
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Re: Permanent Portfolio is only for US

Post by Dieter » Sun Feb 14, 2016 1:54 am

If gold doesn't always work because it reacts primarily to the worlds reserve currency, maybe own some other assets in ye world reserve currency?

Don't know what's available where, and haven't back tested, but have you considered something like:

20% Euro Stock
10% S&P 500
20% Local Bonds
10% US LTT
25% local cash
15% Gold

So, 20% in the world reserve currency; slit depending on how US markets are doing.

And still a significant chunk of gold for when things get interesting.
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Re: Permanent Portfolio is only for US

Post by Lang » Mon Feb 15, 2016 4:35 am

Maybe try Swiss Francs instead of gold? I'm skeptical, but it might work well.
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Re: Permanent Portfolio is only for US

Post by LazyInvestor » Mon Feb 15, 2016 6:27 am

No need to hold CHF. One can get sufficient exposure to various currencies and market conditions by holding total world ETF for their equity part.

I was thinking a bit more what I would do if I were living in one of the developed EU countries with heavy welfare:

1) calculate built in welfare support available in case of emergency/retirement as part of my fixed income
2) decide on a portfolio (e.g., 40% fixed income, 10% gold, 50% total world ETF)
3) while (1) > 40% fixed income, put all the money in total world ETF

People in countries with heavy social security safety net, and relatively little left to invest after tax should take a bit more risk IMO than what PP gives you. Of course, if you're self employed heavy earner without social safety and you have to fund your own retirement then by all means go with pure PP.

To solve the issue of gold relative to your local currency, you can run 50% local PP and 50% US PP.
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Re: Permanent Portfolio is only for US

Post by mukramesh » Mon Feb 15, 2016 2:11 pm

I don't really understand the fuss... Those charts make it look like the Japanese and Swedish PP are GREAT investments! :o
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lordmetroid
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Re: Permanent Portfolio is only for US

Post by lordmetroid » Mon Feb 15, 2016 5:08 pm

Mmmm, you are probably right. I don't have any better idea anyway so I am going to stick with the Permanent Portfolio.
Can't wait to see my stock purchase drop 90% as we get another great depression.  8)
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Kbg
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Re: Permanent Portfolio is only for US

Post by Kbg » Mon Feb 15, 2016 10:29 pm

I think HB's best book was Best Laid Plans...if I recall correctly he said gold is an anti-USD asset as it relates to perceived safety. If the world is seeking safety and thinks the USD sucks, gold will do well. If seeking safety and the USD is perceived safe, it is going with the USD (cuz you get interest).

Seems to be a perfect explanation of what's been happening the past couple of years. Obviously if you are in a foreign country you are going to have to factor in how your currency is doing against both. Not that Harry said this, but if you are in a foreign country and the USD is doing better than gold (and your currency) then it would follow that the USD would be better for you than gold.

And definitely it is all about perception...key point.
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Re: Permanent Portfolio is only for US

Post by economicsjunkie » Tue Feb 16, 2016 12:53 pm

Lang wrote: Japan has been in deflation for more than 20 years and even so the price of gold in yen has skyrocketed since 2004, which makes no sense whatsoever.

http://goldprice.org/gold-price-japan.html
It only makes "no sense whatsoever" if you assume gold must drop in deflation. Empirically this theory doesn't seem to hold up.
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Re: Permanent Portfolio is only for US

Post by frugal » Tue Feb 16, 2016 12:57 pm

Hello,

does it makes sense for one non-US (european) person to have some CASH in USD?

Less Gold and some USD cash?

Thank you.
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Re: Permanent Portfolio is only for US

Post by dualstow » Tue Feb 16, 2016 2:44 pm

frugal wrote: does it makes sense for one non-US (european) person to have some CASH in USD?
It does if you live in Russia.  :) But you're in Portugal, right?
I don't know much about Portugal.
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