Is the PP going to hold up?

General Discussion on the Permanent Portfolio Strategy

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sophie
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Re: Is the PP going to hold up?

Post by sophie » Sun Feb 11, 2018 10:03 am

Buddtholomew, what are you struggling with exactly? Is it just buying anything in this climate that is unnerving? I can relate to that, but so far I can stick with PP therapy. I'd definitely look at alternatives if that got too difficult to implement.

What about switching to the Desert portfolio? It's tailor made for you. Enough stocks to let you enjoy the good times, just enough gold to cushion the losses in a 1970s style scenario, and the rest is extremely user-friendly short to intermediate bonds. And not much of the worst type of PP tracking error. If you did that, your rebalance would have you buying a bit of gold, a nice slug of attractively priced stocks, and 5 year bonds to be held to maturity instead of LTTs. If you even need to rebalance.
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jhogue
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Re: Is the PP going to hold up?

Post by jhogue » Sun Feb 11, 2018 10:39 am

If Buddtholomew did not exist, this forum would have to invent him.

Keeping a perpetual worrier around lets the rest of us see just how ridiculous it is to try to micro-manage the Permanent Portfolio

Thanks, Bud.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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buddtholomew
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Re: Is the PP going to hold up?

Post by buddtholomew » Sun Feb 11, 2018 10:54 am

I am the “Resident Worrier” O0

Sophie, let me try and lay out the details:

Stocks/Gold/LTT’s/Cash
25/21/16/38

I am cash heavy at 38% and am comfortable with the Gold allocation as it is 7.5% of total portfolio. That leaves Stocks and LTT’s with the SPY down approximately 10% from recent highs and treasuries down around 8%

1. Buy LTT’s to bring allocation closer to 20%.
2. Buy LTT’s and stocks with the recent correction although stocks are at 25%
3. Buy LTT’s in PP and stocks in retirement accounts.
3. Do nothing.

Overall portfolio is 53.5/39/7.5 with healthy slug of ITT.’s in Tax-deferred so closely resembles what you are outlining.
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Kriegsspiel
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Re: Is the PP going to hold up?

Post by Kriegsspiel » Sun Feb 11, 2018 11:20 am

bud used to have an avatar and a Resident Worrior tag, but he's really been lacking in his forum identity hygiene recently.
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Re: Is the PP going to hold up?

Post by Kriegsspiel » Sun Feb 11, 2018 11:26 am

If I were you, bud, I'd go with option 1.
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jhogue
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Re: Is the PP going to hold up?

Post by jhogue » Sun Feb 11, 2018 1:04 pm

Bud,

Don’t just do something, stand there!

I don’t see anything wrong with keeping a 38% cash position until the equity markets simmer down. It will dampen the volatility of your overall portfolio.

But, then again, maybe that is just me. I signed up for the PP because I wanted less drama, not more.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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ochotona
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Re: Is the PP going to hold up?

Post by ochotona » Sun Feb 11, 2018 8:30 pm

Budd:

Instead of just thinking "stocks or bonds", why not buy some short term corporate bond which matures in about 6-12 months? Kick the can forward 6-12 months, and earn way better than bank cash, it's riskier than Treasuries, but way less risky than stocks. don't buy high yield.

You might have less potential for buyer's remorse in 6-12 months... maybe stocks will be in a real bear market (or not), and maybe bond prices will have stopped falling (or not). Maybe also put in a limit order for gold at $1280.
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sophie
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Re: Is the PP going to hold up?

Post by sophie » Sun Feb 11, 2018 10:07 pm

So jhogue and ochotona basically vote same: Budd, hang on to your cash. Probably a good idea. That's a lot of stocks you have, especially after last week. I vote the same.

Maybe you want to switch your perspective from the PP and Some Other Portfolio which are somehow intertwined, to just one master portfolio with 7.5% gold, X% stocks, and the rest IT. What's your desired stock allocation?
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Re: Is the PP going to hold up?

Post by glennds » Mon Feb 12, 2018 9:59 am

Granted it's only been a day and the PP is a marathon, not a sprint BUT....

If Budd (or anyone) had held his nose taken Option #1 last week, it would be looking like a pretty good move today seeing as how long T bond is up 80bps as of a few minutes ago.

Who would have thought that would be remotely possible when the all the hysteria last week was reportedly due to inflation and interest rate concerns?
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ochotona
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Re: Is the PP going to hold up?

Post by ochotona » Mon Feb 12, 2018 10:59 am

Budd maybe buy Pacer ETF symbol PTLC and let it get you out of trouble automatically. Instead of SP500 index fund.
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buddtholomew
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Re: Is the PP going to hold up?

Post by buddtholomew » Mon Feb 12, 2018 11:12 am

Yikes, everyone is all over the map...
I’ll just stick to the plan and rebalance into LTT’s.
Thanks for all the input.
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ochotona
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Re: Is the PP going to hold up?

Post by ochotona » Mon Feb 12, 2018 12:17 pm

buddtholomew wrote:Yikes, everyone is all over the map...
I’ll just stick to the plan and rebalance into LTT’s.
Thanks for all the input.
Trying to guess how to make you happy is all over the map
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