New all-time high

[Tyler]

Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ

LOL.

I'm finally approaching 40 and starting to appreciate the wear and tear.  I guess I should get any treatment in while I still can. 

[dualstow]

I don't know if it's been said, but it's kinda crazy that so many of us were struggling with our faith in the pp so recently. I'm no exception.
It really satisfies over the long term if one can stick with it.

[I Shrugged]

Looks like I'm up just under 4% YTD. 
I'll take it.

[sophie]

Gold crashes have to be the worst, because us PP'ers have to suffer through that alone.  It's been a tough few years but I'm pretty happy right now too!  Per etfreplay, the 25x4 PP is now up 6.2% YTD, compared to 0.9% for the S&P 500.

Joy!

[Mark Leavy]

I've been running a weird, unleveraged 2x PP for a couple of years and even though it performed as I predicted, last year was no fun at all.  But as of today, it made me smile.

45% LT US Treasuries.
35% Physical Gold
15% XIV
05% Cash.

I also keep a smaller true PP portfolio and it was encouraging to see them both come out of the doldrums at the same time.

[ochotona]

I am going to study whether the "go to cash" down market phase for momentum portfolios should be replaced with "go to PP". Watch the VP area of the forum.

[sophie]

I've wondered whether there is any point to bothering with bond allocations in retirement accounts if you hold a comparable sized PP.  The purpose of bonds in stock/bond portfolios is to dampen the effect of stock market drops, by not going down as much as stocks, at the cost of reducing returns.  Getting fancy with emerging market bonds, TIPs, and even international stocks in the stock allocation may minimize the drop but won't give you the bump you need when the stock market goes down.  And, the PP may reduce returns by a bit but not as much as the bond allocation does.  Vanguard total bond has returned 4.55% annually over the past 10 years, and 6.19% since inception.

It's too bad gold isn't available in more retirement accounts.  For most of us, retirement savings dwarf everything else, because the benefits of deferring taxes are too good to miss out on.  I tried to prove to myself once that I'd be better off paying taxes now and then paying capital gains/dividend taxes later on the earnings, rather than paying ordinary income tax rates, but no matter how I stacked the deck it was always better to defer. 

[dualstow]

I've wondered whether there is any point to bothering with bond allocations in retirement accounts if you hold a comparable sized PP.  The purpose of bonds in stock/bond portfolios is to dampen the effect of stock market drops, by not going down as much as stocks, at the cost of reducing returns...And, the PP may reduce returns by a bit but not as much as the bond allocation does. 

How do you feel about munis in taxable? I think of them as a little extra diversification. They definitely drag the total return down, but I use the generous interest to help pay bills, and the duration is less scary than that of 30-YR treasuries. Vp of course.

[buddtholomew]

Bend over and kiss your a$$ goodbye
Gold down 2.5% to 1215.

[dualstow]

Just bought some CEF.

[Cortopassi]

I'll take it.  We are still over 1200. 

Everything works opposite how I would have traded in the past. 

Oh, look, another terrorist attack.  I bet people want to go into safe havens.  Guess not. 
Oh look, another interest rate hike, I bet people want out of gold.  Guess not. 
Oh look, earnings are crap, the market should go down.  Guess not.

PP has kept me invested in things I would have bet my life on would have reacted completely differently given the situation.  If this is because things are manipulated, I suppose I can live with that now vs. gnashing my teeth because I made a wrong call.

YTD, gold +15%, TLT +5%, VTI, +0%.  (approx).  You had to figure gold had to take a breather at some point.

[Cortopassi]

Just doing the change slowly.  I added about 3% more stocks right before the low in stocks whenever that was, late Jan or so, and have dropped cash to do that.  But not near the levels I want to be at.  I figure if I have it close by the end of the year I'll be good.

My targets, based off some 401k limitations are:

Total Market 15.0%
LT Bonds         25.0%
LgCap Blend 10.0%
EmMkt/IntlSmal7.5%
SmCapVal 7.5%
Cash 10.0%
Gold         25.0%

[dragoncar]

It must be the end of the month cause the pp is down

[buddtholomew]

Gold is 2% below my recent sale price.
The PP is positive YTD.
I have cash to invest in Gold and LTT's.
Oh the dilemma...

[buddtholomew]

Just doing the change slowly.  I added about 3% more stocks right before the low in stocks whenever that was, late Jan or so, and have dropped cash to do that.  But not near the levels I want to be at.  I figure if I have it close by the end of the year I'll be good.

My targets, based off some 401k limitations are:

Total Market 15.0%
LT Bonds         25.0%
LgCap Blend 10.0%
EmMkt/IntlSmal7.5%
SmCapVal 7.5%
Cash 10.0%
Gold         25.0%

Basically less cash and more US/EM diversification.

[dualstow]

Gold is 2% below my recent sale price.
...
I have cash to invest in Gold...
Oh the dilemma...

Are you sure you want to keep getting in and out of gold like that?

[Pet Hog]

Uncork the champagne!  According to peaktotrough.com, the PP started on January 1 1972 with 35/15 bands and reinvested dividends reached its all-time high (nominally) yesterday, surmounting the previous peak established on February 2 last year.  Hopefully, your portfolio is at its all-time high, too.  I know mine is, and it's a relief after the big plunge (almost 8%) last year.

(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Congratulations, PP!

Almost three years later and I could write a similar post again today. I follow two PPs (mine and a theoretical one started on a different day) and they both reached their all-time highs on Friday. The previous highs were toward the end of January 2018, so again it took just over a year to get back here.

Although the drawdowns I've experienced as a PP investor have been pretty small, I've noticed a psychological effect where a 2% decline now bothers me as much as a 20% decline did before I invested this way. Silly, I know. But I am very happy with my investments. I never think about changing the asset mix. For me that's the number one advantage of PP investing: no desire to tinker!

I'm optimistic about the portfolio's return for 2019. Hope to have a solid year -- a 10% gain would be welcome -- so that my real CAGR gets above 4% again and stays there. It's been stuck in the 1-3% range for too long (I started in May 2013).

[vnatale]

Uncork the champagne!  According to peaktotrough.com, the PP started on January 1 1972 with 35/15 bands and reinvested dividends reached its all-time high (nominally) yesterday, surmounting the previous peak established on February 2 last year.  Hopefully, your portfolio is at its all-time high, too.  I know mine is, and it's a relief after the big plunge (almost 8%) last year.

(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Congratulations, PP!

Almost three years later and I could write a similar post again today. I follow two PPs (mine and a theoretical one started on a different day) and they both reached their all-time highs on Friday. The previous highs were toward the end of January 2018, so again it took just over a year to get back here.

Although the drawdowns I've experienced as a PP investor have been pretty small, I've noticed a psychological effect where a 2% decline now bothers me as much as a 20% decline did before I invested this way. Silly, I know. But I am very happy with my investments. I never think about changing the asset mix. For me that's the number one advantage of PP investing: no desire to tinker!

I'm optimistic about the portfolio's return for 2019. Hope to have a solid year -- a 10% gain would be welcome -- so that my real CAGR gets above 4% again and stays there. It's been stuck in the 1-3% range for too long (I started in May 2013).

Pet Hog,

Is it yet time for another update from you regarding this?

Vinny

[Pet Hog]

Sure, Vinny -- it does seem like a good time for an update.

I'm at an all-time high again. It looked like the PP had peaked in early September 2019, but it ended the year with a surge during the the last few trading days. My PP gained a nominal 16.7% in 2019 (about 14.3% real -- I'll know more accurately when the CPI for December comes out next week). It was my best year since adopting the strategy, and now my real CAGR is about 4.2% over the six years and seven months since May 2013.

I was always hoping to get into -- and stay in -- the range of 4-6% real annualized. My long-term target for real CAGR is 5.2%. That's the number I got a few years back from a lot of spreadsheeting of the data. I think Tyler's Portfolio Charts gives a real CAGR of 4.9% or thereabouts for the PP rebalanced annually. The extra 0.3% should come from using 35/15 bands and rebalancing only when they are breached. I'm still accumulating and adding to lagging assets, so my PP is getting rebalanced less than annually and perhaps I will underperform for a while longer. Nevertheless, I'm happy with my progress and have no regrets.

This year I'm up 1.5% already. Another good January? I'm hoping for another above-average year to get my real CAGR up a bit higher. Since I hoped for, and received, a 10+% year last year, I'll wish for one again -- for all of us -- in 2020!

-----
EDIT: With today's CPI number for December, my real PP return for 2019 was 14.4% and my real CAGR since May 2013 has been 4.2%.