Just stocks and gold. What allocation for European?

[Someguy]

Hi all.

I'm very interested in the Permanent Portfolio. After reading the 2012 book and a lot of messages of this forum, I think I will go for stocks and gold.

I don't trust bonds. Specially European bonds (I live in Spain), but I don't trust US bonds either. I think Browne had good points about bonds when he was alive, but it's a different story now.

What about cash? Well, I have some cash in the bank. And I can get cash benefits (welfare, retirement...) in a few years. I think this post is interesting: viewtopic.php?t=9082#p162047

I don't trust a lot in European equities, so I think I will get a World Vanguard Index fund, like VANGUARD GLOBAL STOCK INDEX "INV" (EUR) ACC. But I don't know whether to get in euros or dollars. What do you think? I trust more USA than Europe. Is there some problem for choosing the USD one?

So my idea is to put all my cash that I don't need short-term and to get equities and gold. But what is a good allocation? 50/50 perhaps?

[barrett]

Welcome, Someguy. US investor here. The problem I always have with Europeans buying USD denominated assets is that they are then taking on a lot of exchange rate risk. This year has been a good example. My understanding is that the strengthening Euro has negated potential gains in a European PP when most of the assets are in held in US Dollars. I don't have a great answer for you really... just that concern.

There was a guy who used to post on here who just had a stock/gold mix. Alas, he was personally more volatile than his portfolio and I believe he was banned. Tyler also has a good article somewhere on his website (portfoliocharts.com) about a stock/gold mix.

Best of luck!

[Someguy]

Thanks, barrett.

I guess that a possibility for confronting that problem is to divide the assets: 50% World, 50% Europe.

[Hal]

Few places to research...

http://www.merkinvestments.com/download ... cation.pdf

http://actuary-info.blogspot.com.au/201 ... escue.html

https://www.youtube.com/watch?v=KWqNTYhGCtU Very good site

and a few other thoughts

If you have any debt, consider paying off that first.

Hold some physical cash (aka James Rickard scenario)

[Someguy]

Thanks, Hal. Very interesting links.