Trump's Effect on the PP

General Discussion on the Permanent Portfolio Strategy

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buddtholomew
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Re: Trump's Effect on the PP

Post by buddtholomew » Thu Dec 01, 2016 5:13 pm

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.
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Re: Trump's Effect on the PP

Post by barrett » Fri Dec 02, 2016 6:46 am

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).
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buddtholomew
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Re: Trump's Effect on the PP

Post by buddtholomew » Fri Dec 02, 2016 8:44 am

I sympathize with your position Barrett.

What has helped me emotionally is continuing to add contributions and ALSO holding a traditional BH 70/30 AA.

Again, I fully expect the BH portfolio to sustain a loss at some point and for the PP to change course once again.

The only alternative I would consider if only a PP investor is NOTHING. I rebalanced out of small-cap and EM and will not purchase as part of the PP to ride that rollercoaster back down like gold and bonds.

You have to be there before the run-up to participate fully.
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Re: Trump's Effect on the PP

Post by Cortopassi » Fri Dec 02, 2016 8:52 am

barrett wrote: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.
That's the worst part. You lost money that you didn't have, but it still hurts. But not like anyone knows the peak at which to sell and the bottom at which to buy.

This has been a good year for me mentally. I care less and less, especially as I realize more and more there's not a damn thing I can do about it, other than just stuff money under my mattress.

I'm sure some will say go to a different allocation, etc, but the split I have right now "feels" right for me, and that's the most important thing:

25% total market
5% small cap
5% emerging market
25% TLT
25% gold
5% silver
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Re: Trump's Effect on the PP

Post by foglifter » Fri Dec 02, 2016 12:17 pm

Cortopassi wrote: I'm sure some will say go to a different allocation, etc, but the split I have right now "feels" right for me, and that's the most important thing:

25% total market
5% small cap
5% emerging market
25% TLT
25% gold
5% silver
That's a fine allocation. Are the numbers correct? Looks like 10% is missing. :)
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Re: Trump's Effect on the PP

Post by Cortopassi » Fri Dec 02, 2016 12:21 pm

Oops! 10% cash.
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buddtholomew
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Re: Trump's Effect on the PP

Post by buddtholomew » Fri Dec 02, 2016 4:14 pm

Now its terrible! ;D

In response to barrett's comment on anchoring
It's natural to get "anchored" on the amount of $ one has at a peak and feel, OK, this is where I am at.
To me it feels like a mini-recession when I have become accustomed to the total in my account and the portfolio pulls back from a recent high.
"Anchoring" is difficult to overcome and that's what is/was so appealing to me about the PP.
The number I anchor around and the actual value are both higher than I started the year with.
The recent high is now the next target.
It doesn't always work...
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Re: Trump's Effect on the PP

Post by JohnnyFactor » Fri Dec 02, 2016 9:47 pm

Cortopassi, why do you have silver? I like silver myself but I don't know how to classify it as an investment.
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Re: Trump's Effect on the PP

Post by barrett » Sun Dec 04, 2016 8:33 am

JohnnyFactor wrote:Cortopassi, why do you have silver? I like silver myself but I don't know how to classify it as an investment.
Hey, I just logged on to ask the same question! Cortopassi, are you just fiddling around the edges or do you have a strategy behind your silver position? As in, it may do well in an economic boom for industrial reasons but also might provide a bit of inflation protection? For me both of those are already pretty well covered by the 4X25 PP. Or are you just down in your man cave in the basement fondling your secret silver stash?
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Re: Trump's Effect on the PP

Post by Cortopassi » Sun Dec 04, 2016 12:57 pm

I already held physical silver before I started the PP, and cannot bear to part with it, so I incorporated it. I continue to like the idea of having a good % physical vs. being bits on a server somewhere.

While it is supposed to act good as an industrial metal, as far as I've seen for 8 years it is basically just an amped up version of gold. Rises faster/more and falls faster/more.

If I did not hold any, my tweaking for the past year has been targeted to get to 10% cash, so I likely would just have done 30% gold instead.
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Re: Trump's Effect on the PP

Post by vnatale » Mon Jan 13, 2020 10:05 am

technovelist wrote:
Fri Nov 25, 2016 8:30 pm
I'm going to suggest the following plan to President-Elect Trump:
1. Revalue the Treasury's gold to a high enough price to pay off the debt not held by the Fed.
2. Cancel the debt held by the Fed.
3. End the Fed.
4. End the following departments: HUD, Commerce, Education.
5. Submit a balanced budget, and propose a constitutional amendment requiring this. This will end the trade deficit automatically because there won't be hundreds of billions of $ flowing overseas.
6. Propose a constitutional amendment requiring a balanced budget.
7. End the IRS, funding the government via tariffs.

Then watch the economy take off!
3 years 2 months later he has so far accepted none of your above recommendations?

Vinny
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Re: Trump's Effect on the PP

Post by technovelist » Mon Jan 13, 2020 11:40 am

vnatale wrote:
Mon Jan 13, 2020 10:05 am
technovelist wrote:
Fri Nov 25, 2016 8:30 pm
I'm going to suggest the following plan to President-Elect Trump:
1. Revalue the Treasury's gold to a high enough price to pay off the debt not held by the Fed.
2. Cancel the debt held by the Fed.
3. End the Fed.
4. End the following departments: HUD, Commerce, Education.
5. Submit a balanced budget, and propose a constitutional amendment requiring this. This will end the trade deficit automatically because there won't be hundreds of billions of $ flowing overseas.
6. Propose a constitutional amendment requiring a balanced budget.
7. End the IRS, funding the government via tariffs.

Then watch the economy take off!
3 years 2 months later he has so far accepted none of your above recommendations?

Vinny
I don't actually have a way to get in touch with him that he will see.
However, he has certainly done a good job for the economy even without those measures.
I do expect him to tackle the deficit after he gets re-elected.
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