Moving out of the PP
Posted: Sun Dec 18, 2016 7:05 am
Lately I’ve been looking to simplify certain areas of my life and I had to admit to myself that I had more doubts about my Permanent Portfolio then I’d like to.
Ever since I’ve began adding new money to move my portfolio closer to the 4x25 allocation (5/6 years!) I’ve kept a feeling of unease about this allocation.
See for example: http://www.gyroscopicinvesting.com/foru ... f=1&t=8663
Partly this has to do with the fact that I’m living in the EU and a PP without the reserve currency isn’t really the same as the US-PP. The EU-PP is a bit of a compromise and I thought I would be ok with that. In a way I am ok with that. I’ve been reasonably happy with the performance and behaviour of my portfolio.
What I didn’t like is that 75% of the assets are very volatile. I felt like I always had to sort of check if none of the assets made some particularly strong move which would cause a rebalance. Keeping track of a portfolio is something I apparently don’t like to do, it causes me a bit of stress.
Other issues I have are more specific to a EU-PP: Gold isn’t tied to the Euro, and Euro bonds are of course way more risky than US treasuries.
My portfolio just feels unnecessarily risky to me. I thought long and hard about switching to a Desert portfolio with global stocks, but that 10% gold is unlikely to make a major difference either way. It just adds complexity.
So from January 2017 I’ll be simplifying into a 40/60 global stocks/short-term fixed portfolio:
40% iShares Core MSCI World UCITS ETF (IWDA)
60% Savings account 0.5% government insured. (short-term bonds if yield is higher)
The main advantages for me are clarity and simplicity. There is a risky asset and there is a safe asset, and they serve different purposes. I’m still accumulating and I’m ok if the stock part gets larger or smaller. I just keep adding new money 40/60 and let it ride.
I understand that it can sound quite silly to some to consider the PP ‘complicated’ and ‘risky’, and I don’t think there is something really wrong with the PP, but I do think it can be tiring to be invested in such risky assets all the time. At least for me it was.
I want to thank everybody on this board for all the contributions, learned a lot here! (although you could say I didn’t learn enough ) Think I will check-in every once in a while, I will always have a soft spot for Harry Browne and the PP.
Best of luck everyone!
Ever since I’ve began adding new money to move my portfolio closer to the 4x25 allocation (5/6 years!) I’ve kept a feeling of unease about this allocation.
See for example: http://www.gyroscopicinvesting.com/foru ... f=1&t=8663
Partly this has to do with the fact that I’m living in the EU and a PP without the reserve currency isn’t really the same as the US-PP. The EU-PP is a bit of a compromise and I thought I would be ok with that. In a way I am ok with that. I’ve been reasonably happy with the performance and behaviour of my portfolio.
What I didn’t like is that 75% of the assets are very volatile. I felt like I always had to sort of check if none of the assets made some particularly strong move which would cause a rebalance. Keeping track of a portfolio is something I apparently don’t like to do, it causes me a bit of stress.
Other issues I have are more specific to a EU-PP: Gold isn’t tied to the Euro, and Euro bonds are of course way more risky than US treasuries.
My portfolio just feels unnecessarily risky to me. I thought long and hard about switching to a Desert portfolio with global stocks, but that 10% gold is unlikely to make a major difference either way. It just adds complexity.
So from January 2017 I’ll be simplifying into a 40/60 global stocks/short-term fixed portfolio:
40% iShares Core MSCI World UCITS ETF (IWDA)
60% Savings account 0.5% government insured. (short-term bonds if yield is higher)
The main advantages for me are clarity and simplicity. There is a risky asset and there is a safe asset, and they serve different purposes. I’m still accumulating and I’m ok if the stock part gets larger or smaller. I just keep adding new money 40/60 and let it ride.
I understand that it can sound quite silly to some to consider the PP ‘complicated’ and ‘risky’, and I don’t think there is something really wrong with the PP, but I do think it can be tiring to be invested in such risky assets all the time. At least for me it was.
I want to thank everybody on this board for all the contributions, learned a lot here! (although you could say I didn’t learn enough ) Think I will check-in every once in a while, I will always have a soft spot for Harry Browne and the PP.
Best of luck everyone!