buddtholomew wrote:Investors that chased gold and bond returns have certainly paid the price.
Those of us invested in the PP this year have watched an outsize return evaporate as these same assets declined.
What lies ahead is anyone's guess, but I for one am going to re-balance into gold and treasuries to maintain my allocation.
We have witnessed a remarkable recovery in equities since the depths of 08/09.
If it continues, great, but when it does retract I fully expect gold and/or treasuries to be the main recipients.
Investors are always on the wrong side and I am not going to choose.
I will also be OK if investors flee to cash if interest rates rise and savings begin to pay a decent yield.
Yeah, I'm pretty much with you on all points, Budd. One thing of note... When I look at historical data, it seems that investors are willing to deal with higher stock P/E ratios over time. The highs on the historical graph are higher as well as the lows. So, while I believe stocks are coming down at some point, they may not really get hammered as they did in 2008. But, yeah, keeping the four assets pretty much in balance seems likely to be the best approach going forward.
What I struggle with at times is looking at that retirement account # going down when I am trying to get my finances in line to retire (don't HAVE to yet but I would like for it to be an option). It's natural to get "anchored" on the amount of $ one has at a peak and feel, OK, this is where I am at. All is well. Then during the drawdowns, which happen with ANY portfolio, it feels like $ is being taken away. So maybe I work a year or three longer than I had planned. That's hardly a tremendous hardship. Anyway, just blathering here.
But, while I am blathering, I may as well continue! The YTD PP gains three months ago just seemed unsustainable. This portfolio is not
supposed to beat inflation by 12-14%. But, to vaguely bring this post back to any effect Trump might be having on the PP, I just don't see that anything much has changed
fundamentally since he was elected. I don't see that inflation, prosperity or any other economic condition naturally follows just because we have Trump to deal with for the next 2-4 years (we'll see what happens in the 2018 midterm election).