European PP, update 6 months after starting

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

User avatar
europeanwizard
Full Member
Full Member
Posts: 69
Joined: Sun Jun 04, 2017 4:06 am
Location: The Netherlands, Europe

European PP, update 6 months after starting

Post by europeanwizard » Sat Dec 16, 2017 3:42 am

Some time ago, a forum member asked me how my European PP was doing. Since I owe so much to this forum, here's a little update.

First of all, I'm in the experimental phase because until recently, I was still saving. I'm a contractor and this means no social security in The Netherlands. Since I have a family, I want a nice stash of cash. As of today, that reached 50k euros. Monthly expenses are 2400 euros, so this means about 21 months of living. This is enough for me, so I expect that in 2018, more money will flow into the PP.

That said, I started in July with three funds:
ETFS PHYSICALGOLD (JE00B1VS3770) 2489
ISHARES MSCI EUR A (IE00B4K48X80) 2481
ISHARES E GOV15-30 (IE00B1FZS913) 2414

After some talking here, I changed that last one to ISHARES E GOV7-10 (IE00B1FZS806), worth 2511 euros, the month after. Plus I found out that my broker lends out securities, so I switched to a special account type that's excluded from this practice. So the numbers aren't really reliable but to give a general idea. In August, I moved 2500 euros cash into the PP.

(dd/mm/yyyy) Euros
01/07/2017 7761,38
01/08/2017 7783,37
01/09/2017 7781,90
01/10/2017 10614,00
01/11/2017 10765,04
01/12/2017 10621,37

The cash portion is 25k in a CD at 0.8%, and another 25k in a savings account at 0.5%.

As you can see, the portfolio barely moved. Curious to see what it will do next year.
User avatar
frugal
Executive Member
Executive Member
Posts: 889
Joined: Sat Nov 10, 2012 12:49 pm

Re: European PP, update 6 months after starting

Post by frugal » Sat Dec 16, 2017 1:37 pm

europeanwizard wrote:Some time ago, a forum member asked me how my European PP was doing. Since I owe so much to this forum, here's a little update.

First of all, I'm in the experimental phase because until recently, I was still saving. I'm a contractor and this means no social security in The Netherlands. Since I have a family, I want a nice stash of cash. As of today, that reached 50k euros. Monthly expenses are 2400 euros, so this means about 21 months of living. This is enough for me, so I expect that in 2018, more money will flow into the PP.

That said, I started in July with three funds:
ETFS PHYSICALGOLD (JE00B1VS3770) 2489
ISHARES MSCI EUR A (IE00B4K48X80) 2481
ISHARES E GOV15-30 (IE00B1FZS913) 2414

After some talking here, I changed that last one to ISHARES E GOV7-10 (IE00B1FZS806), worth 2511 euros, the month after. Plus I found out that my broker lends out securities, so I switched to a special account type that's excluded from this practice. So the numbers aren't really reliable but to give a general idea. In August, I moved 2500 euros cash into the PP.

(dd/mm/yyyy) Euros
01/07/2017 7761,38
01/08/2017 7783,37
01/09/2017 7781,90
01/10/2017 10614,00
01/11/2017 10765,04
01/12/2017 10621,37

The cash portion is 25k in a CD at 0.8%, and another 25k in a savings account at 0.5%.

As you can see, the portfolio barely moved. Curious to see what it will do next year.
hi

you have 50K in CD and 7k in 3 ETFs?
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 1895
Joined: Fri May 21, 2010 4:16 pm

Re: European PP, update 6 months after starting

Post by buddtholomew » Sat Dec 16, 2017 1:47 pm

Hi Frugal, I think OP was building an emergency fund before investing in the other PP assets. At least that is what I gathered from the post.

EuropeanWizard, why do you maintain such a large cash position?
User avatar
frugal
Executive Member
Executive Member
Posts: 889
Joined: Sat Nov 10, 2012 12:49 pm

Re: European PP, update 6 months after starting

Post by frugal » Sun Dec 17, 2017 1:54 am

buddtholomew wrote:Hi Frugal, I think OP was building an emergency fund before investing in the other PP assets. At least that is what I gathered from the post.

EuropeanWizard, why do you maintain such a large cash position?
Hi,

I think it is smarter to be 100% PP.

The main problem are ETF's and brokers...
User avatar
europeanwizard
Full Member
Full Member
Posts: 69
Joined: Sun Jun 04, 2017 4:06 am
Location: The Netherlands, Europe

Re: European PP, update 6 months after starting

Post by europeanwizard » Mon Dec 18, 2017 9:26 am

frugal wrote: you have 50K in CD and 7k in 3 ETFs?
25K absolutely cash (in a savings account)
25K in a CD
10K in 3 ETFs
buddtholomew wrote:why do you maintain such a large cash position?
Main emotional reason, I'm a bit of a nervous guy ;D

I've always worked for the man, very stable job and all that. I started contracting a couple of years ago, but I'm nowhere used to this feeling of not having a regular salary. So I wanted to have a big amount of cash, to be able to cover any emergency that may pop up.
frugal wrote:I think it is smarter to be 100% PP. The main problem are ETF's and brokers...
Yeah, I'm not too happy about it. For stocks, I'm fine with an ETF. For bonds, I may look into doing this myself in the future. As for gold, I think I'll have to revisit my choice when the amount is bigger. Having experienced a home burglary, I don't want physical gold in my house. Alternatives are pricey, and the ETF is very, very easy. But at some point (I'm guessing 50K or so), it'll have to go.
User avatar
frugal
Executive Member
Executive Member
Posts: 889
Joined: Sat Nov 10, 2012 12:49 pm

Re: European PP, update 6 months after starting

Post by frugal » Tue Dec 19, 2017 3:52 pm

Hi

ETFs are very easy yes!

I only have affraid of brokers...
juandelarocha
Junior Member
Junior Member
Posts: 7
Joined: Wed Aug 23, 2017 5:34 pm

Re: European PP, update 6 months after starting

Post by juandelarocha » Sun Apr 01, 2018 12:16 pm

Thanks for sharing your portfolio, amounts and wealth strategy Europeanwizard. I'm also a European investor trying to build up my EU-PP. To be sincere, after almost one year I'm kind of disappointed with its performance, here's my distribution:

Asset - % of weight - Name - Code

Shares - 24,69% - Vanguard EURZ ST IDX - IE0008248795
Gold - 24,53% - Xetra Gold (4GLD) - DE000A0S9GB0
Bonds - 25,57% - (60% Bundesrepublik Deutschland 2,500% 8/2046 - DE0001102341 + 40% FI VANGUARD 20+ YEAR EU - IE00B246KL88)
Cash - 25,21% - Bank account giving 0,5%.

So far, overall result is -0,55%. It had moments with good results reaching an overall +3% but sad enough, gold and bonds have been giving flat or negative results most of the time. Funny that Bonds part is positive right now supporting gold and shares negatives though.

Let's see how it goes, but I have already opened an account in the only Robo-advisor running in my homecountry. Good thing about it is that it leverages on the aggregated volume they manage to access to better classes of Vanguard and Amundi funds. So far, +1,8%. Truth be said, it's much more aggressive than our EU-PP:

American Shares - Vanguard US 500 Stk Idx -Ins
European Shares - Pictet Europe Idx -I
European Bonds - Vanguard Euroz Inf Lk Idx -Ins
Emerging Economies Shares - Vanguard Emrg Mk Stk Idx -Ins

BTW: I'm already suffering about the costs of my Gold and Bonds account of the EU-PP (Flatex in Germany). They started charging for holding the Xetra Gold shares... :(
WhiteElephant
Junior Member
Junior Member
Posts: 21
Joined: Wed Sep 20, 2017 6:01 am

Re: European PP, update 6 months after starting

Post by WhiteElephant » Mon Apr 02, 2018 8:52 am

Hi Juandelarocha,

-0.5% and 1.8% in a year doesn't mean much and sounds to me like you're focussing too much on short-term results.
Both the PP and a more conventional stock-heavy porftfolio can go nowhere for 10 years. 1 year results are meaningless.

It also seems you were expecting something different for the PP. -0.5% nominal in a year is perfectly normal for the PP. 99% of the time the PP is an extremely boring portfolio, you have to be able to handle that.

And just curious, how do you handle both accounts? Is the roboadvisor a second portfolio? A Variable portfolio?
User avatar
ochotona
Executive Member
Executive Member
Posts: 2089
Joined: Fri Jan 30, 2015 5:54 am

Re: European PP, update 6 months after starting

Post by ochotona » Mon Apr 02, 2018 11:46 am

Hi, my daughter might end up living in Europe, her boyfriend is French. She is studying in Switzerland this summer. So can I just get on a plane with a pile of gold bullion to give to her (say as a possible future wedding present), or do I have to have export and import licenses?
User avatar
frugal
Executive Member
Executive Member
Posts: 889
Joined: Sat Nov 10, 2012 12:49 pm

Re: European PP, update 6 months after starting

Post by frugal » Fri Apr 06, 2018 4:05 pm

WhiteElephant wrote:Hi Juandelarocha,

-0.5% and 1.8% in a year doesn't mean much and sounds to me like you're focussing too much on short-term results.
Both the PP and a more conventional stock-heavy porftfolio can go nowhere for 10 years. 1 year results are meaningless.

It also seems you were expecting something different for the PP. -0.5% nominal in a year is perfectly normal for the PP. 99% of the time the PP is an extremely boring portfolio, you have to be able to handle that.

And just curious, how do you handle both accounts? Is the roboadvisor a second portfolio? A Variable portfolio?
+1
ochotona wrote:Hi, my daughter might end up living in Europe, her boyfriend is French. She is studying in Switzerland this summer. So can I just get on a plane with a pile of gold bullion to give to her (say as a possible future wedding present), or do I have to have export and import licenses?

in the flight? Where do you put the gold?
johntaylor
Junior Member
Junior Member
Posts: 10
Joined: Fri Jun 01, 2018 8:33 pm

Re: European PP, update 6 months after starting

Post by johntaylor » Fri Jun 01, 2018 9:14 pm

Hello to you all. I am also an european (dutch) PP user. Many years ago I already wanted to organize myself a simple and failsafe portfolio and Harry Brown's PP was always anywhere back in my head for that. But then again I hate financials and bookkeeping so lost sight of the project. Begin this year I suddenly received some serious money which I needed to 'store' away and in a quick instant I decided to devide it over the 4 parts of the PP:
25% Stocks: Meesman Index fund, follows the msci Europe. NL0010436671
25% Bonds: European longterm government bonds
- 12.5%: EXX6, IE00BSKRJX20
- 12.5%: E20Y, DE000A0D8Q31
25% Gold: Goldmoney.com
25% Cash: Savings deposit on 1%

The last few months I did some more research on investing and portfolio's. I found some nice websites like portfoliocharts.com (thanks @Tyler). I especially digged into the german portfolio part:
https://portfoliocharts.com/portfolio/p ... folio-ger/
What I did was get myself european stockdata for european PP and looked if I could reproduce the same results as in portfoliocharts. Because EXX6 and E20Y only exist quite short, I took data from another bond that exists already since 2000: German long term bonds: DE0001134922
The results you will find here:
Image

What I find remarkable is that to me it looks like the european PP is much less profitable then the US PP. In the used timeframe (2002-2017) according to portfoliocharts.com the german portfolio should have a bit higher return (cagr:5.5%) then the us portfolio (cagr:5%). But in my calculations of my own portfolio I only get a return (real cagr) of 3.5%. As this is quite a big difference I am asking myself how this big difference can be caused. Any ideas are welcome.

Thanks, john
User avatar
frugal
Executive Member
Executive Member
Posts: 889
Joined: Sat Nov 10, 2012 12:49 pm

Re: European PP, update 6 months after starting

Post by frugal » Sun Jun 03, 2018 2:06 am

johntaylor wrote:
Fri Jun 01, 2018 9:14 pm
Hello to you all. I am also an european (dutch) PP user. Many years ago I already wanted to organize myself a simple and failsafe portfolio and Harry Brown's PP was always anywhere back in my head for that. But then again I hate financials and bookkeeping so lost sight of the project. Begin this year I suddenly received some serious money which I needed to 'store' away and in a quick instant I decided to devide it over the 4 parts of the PP:
25% Stocks: Meesman Index fund, follows the msci Europe. NL0010436671
25% Bonds: European longterm government bonds
- 12.5%: EXX6, IE00BSKRJX20
- 12.5%: E20Y, DE000A0D8Q31
25% Gold: Goldmoney.com
25% Cash: Savings deposit on 1%

The last few months I did some more research on investing and portfolio's. I found some nice websites like portfoliocharts.com (thanks @Tyler). I especially digged into the german portfolio part:
https://portfoliocharts.com/portfolio/p ... folio-ger/
What I did was get myself european stockdata for european PP and looked if I could reproduce the same results as in portfoliocharts. Because EXX6 and E20Y only exist quite short, I took data from another bond that exists already since 2000: German long term bonds: DE0001134922
The results you will find here:
Image

What I find remarkable is that to me it looks like the european PP is much less profitable then the US PP. In the used timeframe (2002-2017) according to portfoliocharts.com the german portfolio should have a bit higher return (cagr:5.5%) then the us portfolio (cagr:5%). But in my calculations of my own portfolio I only get a return (real cagr) of 3.5%. As this is quite a big difference I am asking myself how this big difference can be caused. Any ideas are welcome.

Thanks, john
Hello !

Some questions:

- Stocks: why you use this unknown ETF ?
- CASH - can you get 1% in a Deposit? Seems too much...
- How much you pay for gold storage per year?

???

I believe your numbers are correct.

Everyone says USPP is better than EUPP.

Our problem is exchange rate... :'( :'(

Please comment.


Regards
Post Reply