2 PP Portfolios, 6 months performance

[Don]

No

Actually, I think it's neither good, nor bad, but irrelevant.

It's called the Permanent Portfolio for a reason and a 6 month snapshot doesn't tell you much in the grand scheme of things.

Been saying the same thing for 7 years now.
It’s only as permanent as your investing horizon.
All I have witnessed is stocks going up with gold and treasuries going down or producing minimal gains.
I still invest in all 4 asset classes but not 4x25.

So does anyone here actually follow the PP as designed? Be honest.

[Cortopassi]

I did for about the first 2.5 years.

I am now at, and have been at for a while:

Total Market 12.5%
LT Bonds 25.0%
LgCap Blend 12.5%
Emerging Mkt 5.0%
SmCapVal 5.0%
Cash 10.0%
Gold 25.0%
Silver 5.0%

[Ugly_Bird]

So does anyone here actually follow the PP as designed? Be honest.

I do. Following blindly HB 4x25 PP. Too lazy and not smart enough to tweak it. :-)

[steve]

I follow it and have been for a long time. The last time I re balanced was Dec 4 2015
I normally re balance when I get very close to the 15/35 band. Since I re balanced my portfolio it has increased just over 15% this year it is down less then 1% from the beginning of the year. At present I am around the 20/30 re balance band which means I have to look at it a little more often but wont touch it until it get closer to 15/35
Gold 23.6995%
Cash 25.8261%
Stocks 30.2606%
Long Term Treasuries 20.2138%

[flyingpylon]

So does anyone here actually follow the PP as designed? Be honest.

In general, I think you'll find that the most active posters on the forum are the ones most likely to continually tweak the formula. There are probably many people that are silently staying the course.

Personally, I followed a pure PP for about six years before shifting to the Golden Butterfly. I'm always open to learning so I enjoy many of the conversations and thought experiments but I don't act on anything other than rebalancing when it's time. I have too many other things consuming the available "CPU cycles" in my brain to feel comfortable doing much else.

[Xan]

I do as well. Don't have the time or interest to get creative.

[buddtholomew]

Like I said above or somewhere else, you have to outrun the losses in Gold and Treasuries. If you rebalanced from stocks to bonds at year end, you gave up 10+% upside and incurred an additional 8-10% in losses for a net loss of
20% on this money.

[jacksonM]

I adopted the PP in 2008 after the meltdown of the meager savings I had with what would probably be less than 10 years to go until retirement. I found it by googling "safe portfolio" or something like that.

It helped me hit my number at almost exactly the same time I was forced into retirement a couple of years ago so overall I have to say I am pleased with the performance. Were there portfolios that could have given me a better return during that time period? Of course there were. Probably could have doubled my money if I had chosen the right portfolio but I don't see much point in that kind of hindsight/second guessing. It did what I wanted it to do and that was that.

One thing I might be doing different from others is that I'm not very strict about re-balancing. If I feel comfortable about the way the momentum is going I just let things ride.

[Alanw]

I follow PP with 30/20 bands and a slice of Wellesley in VP. Current portfolio balance is almost the same as starting balance from 8 years ago with a 5-6% withdrawal in retirement.

[gospodin_i]

So does anyone here actually follow the PP as designed? Be honest.

I didn't include that in my original post, but both portfolios I mentioned were split 4*25% in the beginning and the plan is to rebalance them back to this split each time they reach the 15/35 band.

So, yes, I follow the PP as designed.

I do plan to look into other opportunities, such as investing in ETFs that track specific industries, but if I do, I wouldn't count that as part of my PP.

[Cortopassi]

Current portfolio balance is almost the same as starting balance from 8 years ago with a 5-6% withdrawal in retirement.

THAT is all I am hoping for from this! Great for you!

[buddtholomew]

She’s a beauty isn’t she

[Ugly_Bird]

She’s a beauty isn’t she

There are times when everything is ugly. Even the bird :-)

[Alanw]

Those who had a stock heavy portfolio in 2008 will tend to view things differently (I think). It was very scary seeing the possibility of the U.S. including the stock market failing.

[Cortopassi]

Those who had a stock heavy portfolio in 2008 will tend to view things differently (I think). It was very scary seeing the possibility of the U.S. including the stock market failing.

Bingo. But on the last couple days, where bonds got whacked yesterday, stocks today, and gold barely moved on both, doesn't make for fun checking of the portfolio.

[buddtholomew]

Those who had a stock heavy portfolio in 2008 will tend to view things differently (I think). It was very scary seeing the possibility of the U.S. including the stock market failing.

Bingo. But on the last couple days, where bonds got whacked yesterday, stocks today, and gold barely moved on both, doesn't make for fun checking of the portfolio.

It's more than that in my eyes...
Gold and LTT's are down 8 and 9% respectively.
Stocks are declining and the assets that distinguish the PP from other portfolios (Gold and LTT's) are declining even further.
Nothing like giving up the wholesome gains in stocks on the upside and having your other assets decline even further when stocks finally pull back.

[Cortopassi]

Budd,

There is no rule, as we've seen, that they are direct inverses.

And you can kill yourself thinking about the delta loss that is happening across them now.

But if we get into a 50% stock bear decline, it's probably reasonable to say bonds won't go that far. Nor should gold. And you'll be happier to have them, or less pissed at least.

Not much benefit right now though!

[Alanw]

Agree with all. The PP has not been kind to investors this year, nor has it been terrible. Remember Harry Browne said to look at your portfolio annually. I'm sure no one here, including myself adheres to that rule. In 2008 the PP suffered a loss of about 2%. Given the circumstances of that year, what investor wouldn't have been happy with that result.

[stuper1]

Obviously you people don't understand the ground rules about discussing these things with Budd. If gold and LTTs don't react immediately when stocks go down, then somebody lied to him about the HBPP and he is not pleased. Also, you can't point to any performance that happened prior to him buying into the HBPP, which as I recall was around 2010. Nothing that happened prior to 2010 counts for anything. The only thing that counts is what has happened to him personally in the last 8 years.

Once you understand those ground rules, then feel free to engage him in dialogue.

Oh, and don't forget that he is worth something like $14M, so his losses are probably a lot bigger than yours. Nevermind that he could invest in nothing but Tbills and still live a very comfortable life for 50+ years.

[buddtholomew]

Obviously you people don't understand the ground rules about discussing these things with Budd. If gold and LTTs don't react immediately when stocks go down, then somebody lied to him about the HBPP and he is not pleased. Also, you can't point to any performance that happened prior to him buying into the HBPP, which as I recall was around 2010. Nothing that happened prior to 2010 counts for anything. The only thing that counts is what has happened to him personally in the last 8 years.

Once you understand those ground rules, then feel free to engage him in dialogue.

Oh, and don't forget that he is worth something like $14M, so his losses are probably a lot bigger than yours. Nevermind that he could invest in nothing but Tbills and still live a very comfortable life for 50+ years.

Holy shit, this is the perfect synopsis.
I want to make it my signature but not sure if it will fit.

[stuper1]

I forgot to add one thing. Other than those little quirks which admittedly bug me a little, Budd is a great guy.

[Cortopassi]

Obviously you people don't understand the ground rules about discussing these things with Budd. If gold and LTTs don't react immediately when stocks go down, then somebody lied to him about the HBPP and he is not pleased. Also, you can't point to any performance that happened prior to him buying into the HBPP, which as I recall was around 2010. Nothing that happened prior to 2010 counts for anything. The only thing that counts is what has happened to him personally in the last 8 years.

Once you understand those ground rules, then feel free to engage him in dialogue.

Oh, and don't forget that he is worth something like $14M, so his losses are probably a lot bigger than yours. Nevermind that he could invest in nothing but Tbills and still live a very comfortable life for 50+ years.

Holy shit, this is the perfect synopsis.
I want to make it my signature but not sure if it will fit.

[Don]

Those who had a stock heavy portfolio in 2008 will tend to view things differently (I think). It was very scary seeing the possibility of the U.S. including the stock market failing.

Bingo. But on the last couple days, where bonds got whacked yesterday, stocks today, and gold barely moved on both, doesn't make for fun checking of the portfolio.

It's more than that in my eyes...
Gold and LTT's are down 8 and 9% respectively.
Stocks are declining and the assets that distinguish the PP from other portfolios (Gold and LTT's) are declining even further.
Nothing like giving up the wholesome gains in stocks on the upside and having your other assets decline even further when stocks finally pull back.

It's probably instructive to find a previous period of time when we had similar economic conditions as a template for where the PP might be headed.

Rising rates and an overvalued stock market seem to be where we're at. Could we dare compare this period to 2000?

[Cortopassi]

Nothing good going on today. At this rate, I'll finish 2018 with the largest PP loss since 2015.

But then I get to buy more bonds and gold! Yipee!

[buddtholomew]

Nothing good going on today. At this rate, I'll finish 2018 with the largest PP loss since 2015.

But then I get to buy more bonds and gold! Yipee!

Oh come on Corto, just listen to everyone else on the board telling you how magnificent the PP is.