Nobody believes in the Permanent Portfolio

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

Locked
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Mon May 01, 2017 5:30 am

dualstow wrote:True, no portfolio is always immune. I just think they''d get hit less often.
Then again, it only takes one hit.
So what do they bail into?

those who bail generally bail to cash and end up getting burned by being out when things recover . some like many of the youngin's in their 401k's never came back . in the mean time many of the funds tripled since they threw in the towel in 2008.

nothing is immune to bad investor behavior . as long as the portfolio can lose money in down years or does not gain as much in the up years there are always those that will bail and run or bail and try something else until that has a down year . .

while there are times i allocate more or less money to the portfolio's i run i may have more less in one model vs another but i have used the same models as a core for 30 years now . i may dabble with something like the gb at times (call it my variable portfolio ) but the core has always been the core ever since 1987.

i kind of used a rising glide path entering retirement , so i phased out my growth model at the start and used my income model and growth and income model but now that the election is over and i have some gains to cushion things i re-introduced the growth model back in to the mix for money i won't be using to eat with for 12 to 30 plus years out .

so the point is adjusting things along the way as a strategy is one thing but bailing out and running is quite another .
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Mon May 01, 2017 6:03 am

Ok, so operator error. Can't fault the brussel sprouts for lack of nutrition if the child won't eat them.

As you said, nothing is immune to bad investor behavior.
RIP Marcello Gandini
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Mon May 01, 2017 6:09 am

always operator error .

do you know even if you screwed up and bought gold decades ago when it hit almost 900 an ounce that if you bought the s&p 500 on the same day and had a 50/50 mix you would have seen the following results just rebalancing the gold over years ..

back in the 2000's when gold almost hit 2k your gold which you bought at the worst possible time would actually have beaten the s&p 500 bought on the same day .. of course that is no longer true as gold fell .

but it shows you any plan you stick to can turn out at some point as a decent plan . so operator error is generally going to be the cause . plans may give you better or worse performance but usually they will turn out positive left to themselves .
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Mon May 01, 2017 6:12 am

Yup. This usually comes up in pro-lump-sum arguments vs dollar cost avg'ing.
RIP Marcello Gandini
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Mon May 01, 2017 7:54 am

there is no argument . dca will with few exceptions yield less gains but a better risk profile .

if dca actually worked better overall , we would all reach our desired allocation ,sell everything off and start from zero all over again ..

for dca to work better kitces found you have to be a really good market timer .

https://www.kitces.com/blog/dollar-cost ... s-returns/
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Mon May 01, 2017 8:00 am

Yeah, DCA mostly just feels better.
But with new money coming in at regular intervals to invest, it's the only choice after the initial investment.
RIP Marcello Gandini
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Mon May 01, 2017 8:20 am

dca is the only choice if you don't have the money . having no choice is having no choice .

whether it is a discussion about taking social security early or later , buying or renting , etc , not everything can apply to everyone since many have no choice .

one thing i always say about money is money may not buy happiness but it certainly buys choices in life .
User avatar
Smith1776
Executive Member
Executive Member
Posts: 3501
Joined: Fri Apr 21, 2017 6:01 pm

Re: Nobody believes in the Permanent Portfolio

Post by Smith1776 » Mon May 01, 2017 10:55 am

Yeah, I think the dollar cost averaging discussion is largely academic. (Not that it's not a useful discussion of course.) 99% of people will naturally dollar cost average as they make steady income week after week, month after month, and just make contributions to their mutual funds or other investments. I suppose, even people who have a lump sum in the market end up dollar cost averaging to a certain degree as they reinvest their periodic interest and dividend payments.
I still find the James Rickards portfolio fascinating.
Locked