Gyroscopic Investing

modeljc wrote: ↑Mon Dec 24, 2018 5:42 pm

buddtholomew wrote: ↑Mon Dec 24, 2018 4:23 pm I’m sticking to the plan and moving from 25/25/15/35 to 35/15/15/35 and am currently 30/17.5/17.5/35.

I TLH Gold and offset gains in SCV (IJS)
I then bought SC Blend (IJR) to move closer to 35%
Definitely have felt the pain in stocks as IJR is down 6% since that purchase.

Basically, sold some gold and put in stocks and LTT’s.
Not that concerned that I missed some gold gains as some went to LTT’s to mitigate.

5% went to stocks with the intent of including more equities going forward. It’s a crapshoot but I feel better having slightly less gold, more stocks and LTT’s.

Still wishing we either see a strong stock recovery or Gold/LTT’s catch a bid. Would like to rebalance from either of these into stocks.

Glad you are still around! I will ask again: What is your final allocation if you catch a good bid on Gold/LTT's. It just for now! You can change it. Can you help us all with the Budd allocation. I'm 81 so I pass. But if your have 20 years to invest let me have it. Last time to ask.

Merry Christmas - target allocation is 35/15/15/35.
A little more prosperity and cash, a little less gold and LTT’s. I think I can follow this allocation without much regret.

buddtholomew wrote: ↑Mon Dec 24, 2018 6:05 pm

modeljc wrote: ↑Mon Dec 24, 2018 5:42 pm

buddtholomew wrote: ↑Mon Dec 24, 2018 4:23 pm I’m sticking to the plan and moving from 25/25/15/35 to 35/15/15/35 and am currently 30/17.5/17.5/35.

I TLH Gold and offset gains in SCV (IJS)
I then bought SC Blend (IJR) to move closer to 35%
Definitely have felt the pain in stocks as IJR is down 6% since that purchase.

Basically, sold some gold and put in stocks and LTT’s.
Not that concerned that I missed some gold gains as some went to LTT’s to mitigate.

5% went to stocks with the intent of including more equities going forward. It’s a crapshoot but I feel better having slightly less gold, more stocks and LTT’s.

Still wishing we either see a strong stock recovery or Gold/LTT’s catch a bid. Would like to rebalance from either of these into stocks.

Glad you are still around! I will ask again: What is your final allocation if you catch a good bid on Gold/LTT's. It just for now! You can change it. Can you help us all with the Budd allocation. I'm 81 so I pass. But if your have 20 years to invest let me have it. Last time to ask.

Merry Christmas - target allocation is 35/15/15/35.
A little more prosperity and cash, a little less gold and LTT’s. I think I can follow this allocation without much regret.

Merry Christmas. Thanks If I was a little younger I would go at least 40% prosperity as cash does not return full value a lot of the time.

modeljc wrote: ↑Tue Dec 25, 2018 9:04 am

buddtholomew wrote: ↑Mon Dec 24, 2018 6:05 pm

modeljc wrote: ↑Mon Dec 24, 2018 5:42 pm
Glad you are still around! I will ask again: What is your final allocation if you catch a good bid on Gold/LTT's. It just for now! You can change it. Can you help us all with the Budd allocation. I'm 81 so I pass. But if your have 20 years to invest let me have it. Last time to ask.

Merry Christmas - target allocation is 35/15/15/35.
A little more prosperity and cash, a little less gold and LTT’s. I think I can follow this allocation without much regret.

Merry Christmas. Thanks If I was a little younger I would go at least 40% prosperity as cash does not return full value a lot of the time.

Thanks for the recommendation and I agree.
Will continue to hold a 70/30 equity/bond allocation in retirement accounts.

I am not overly concerned with the high allocation to cash (35%) as it is balanced with 15% in LTT’s for a 5.6 year blended duration (similar to total bond market index).

The question is whether I have the fortitude to rebalance into stocks if they fall further from here to ultimately reach the 35% target allocation (currently 30%). Performance in Gold and/or LTT’s will play a factor in the decision.

buddtholomew wrote: ↑Tue Dec 25, 2018 9:49 am

modeljc wrote: ↑Tue Dec 25, 2018 9:04 am

buddtholomew wrote: ↑Mon Dec 24, 2018 6:05 pm

Merry Christmas - target allocation is 35/15/15/35.
A little more prosperity and cash, a little less gold and LTT’s. I think I can follow this allocation without much regret.

Merry Christmas. Thanks If I was a little younger I would go at least 40% prosperity as cash does not return full value a lot of the time.

Thanks for the recommendation and I agree.
Will continue to hold a 70/30 equity/bond allocation in retirement accounts.

I am not overly concerned with the high allocation to cash (35%) as it is balanced with 15% in LTT’s for a 5.6 year blended duration (similar to total bond market index).

The question is whether I have the fortitude to rebalance into stocks if they fall further from here to ultimately reach the 35% target allocation (currently 30%). Performance in Gold and/or LTT’s will play a factor in the decision.

I'm really hoping you stick around the forums, budd!

buddtholomew wrote: ↑Tue Dec 25, 2018 9:49 am

modeljc wrote: ↑Tue Dec 25, 2018 9:04 am

buddtholomew wrote: ↑Mon Dec 24, 2018 6:05 pm

Merry Christmas - target allocation is 35/15/15/35.
A little more prosperity and cash, a little less gold and LTT’s. I think I can follow this allocation without much regret.

Merry Christmas. Thanks If I was a little younger I would go at least 40% prosperity as cash does not return full value a lot of the time.

Thanks for the recommendation and I agree.
Will continue to hold a 70/30 equity/bond allocation in retirement accounts.

I am not overly concerned with the high allocation to cash (35%) as it is balanced with 15% in LTT’s for a 5.6 year blended duration (similar to total bond market index).

The question is whether I have the fortitude to rebalance into stocks if they fall further from here to ultimately reach the 35% target allocation (currently 30%). Performance in Gold and/or LTT’s will play a factor in the decision.

I love the 5.6 year Bond duration as I believe that rates and inflation will work higher over the next 10 years. It not that hard to believe 4 or 5% inflation at some point in time. It just a guess but I could sleep very well with that duration.

Stocks down, Gold and LTT’s up at end of pre-market.

Will the day end this way or should we expect to see a reversal with stocks ending up, Gold and LTT’s flat to down? The question to ask yourself...”is this pattern actionable.”

After yesterday’s barn burner, stocks are now about where I feel comfortable 30/17.5/17.5/35. Retirement accounts still 70/30. Done for 2018.

A belated Merry Xmas and happy new year to you, Budd.

dualstow wrote: ↑Thu Dec 27, 2018 8:53 am A belated Merry Xmas and happy new year to you, Budd.

Thanks DS, Merry Christmas to all!

dualstow wrote: ↑Thu Dec 27, 2018 8:53 am A belated Merry Xmas and happy new year to you, Budd.

It's not belated; Christmas is twelve days long, starting Christmas Day. There's a song about it and everything.

buddtholomew wrote: ↑Thu Dec 27, 2018 8:15 am Stocks are now about where I feel comfortable 30/17.5/17.5/35. Retirement accounts still 70/30. Done for 2018.

Perfectly sensible allocation but I did notice you mentioned 35/15/15/35 earlier which is also very sensible. Spend some time on portfolio visualizer to see how they differ in performance (I doubt much really) and go with what you feel best with...and then

https://www.youtube.com/watch?v=d-diB65scQU

While I've been picking on you a bit as of late, nothing personal, just felt you needed to make a decision. Have prosperous new year!

Kbg wrote: ↑Thu Dec 27, 2018 10:41 am

buddtholomew wrote: ↑Thu Dec 27, 2018 8:15 am Stocks are now about where I feel comfortable 30/17.5/17.5/35. Retirement accounts still 70/30. Done for 2018.

Perfectly sensible allocation but I did notice you mentioned 35/15/15/35 earlier which is also very sensible. Spend some time on portfolio visualizer to see how they differ in performance (I doubt much really) and go with what you feel best with...and then

https://www.youtube.com/watch?v=d-diB65scQU

While I've been picking on you a bit as of late, nothing personal, just felt you needed to make a decision. Have prosperous new year!

Correct; was on my way to 35/15/15/35 but will stay at 30/17.5/17.5/35 for now. With tighter Gold/LTT’s rebalance bands, my hope is to rebalance out of these assets and move closer towards the 35% stock target. No offense taken Kbg and thanks for the kick in the tochas.

Xan wrote: ↑Thu Dec 27, 2018 9:48 am

dualstow wrote: ↑Thu Dec 27, 2018 8:53 am A belated Merry Xmas and happy new year to you, Budd.

It's not belated; Christmas is twelve days long, starting Christmas Day. There's a song about it and everything.

Fair enough. So are you celebrating the other eleven days, beside the partridge and turtledoves and whatnot?

dualstow wrote: ↑Thu Dec 27, 2018 11:41 am

Xan wrote: ↑Thu Dec 27, 2018 9:48 am

dualstow wrote: ↑Thu Dec 27, 2018 8:53 am A belated Merry Xmas and happy new year to you, Budd.

It's not belated; Christmas is twelve days long, starting Christmas Day. There's a song about it and everything.

Fair enough. So are you celebrating the other eleven days, beside the partridge and turtledoves and whatnot?

Well, the tree is up, the house is decorated, the outside lights are up until the Epiphany. And on Sunday we'll be singing all the Christmas songs at church.

Sounds nice!

buddtholomew wrote: ↑Thu Dec 27, 2018 8:15 am Stocks down, Gold and LTT’s up at end of pre-market.

Will the day end this way or should we expect to see a reversal with stocks ending up, Gold and LTT’s flat to down? The question to ask yourself...”is this pattern actionable.”

Can we continue to ignore this pattern?
Borderline ridiculous, right?
Intra-day PP swing of -.71% to +.48% (quite impressive, too bad I was taking a nap to watch it happen in real-time)

buddtholomew wrote: ↑Thu Dec 27, 2018 3:43 pm

buddtholomew wrote: ↑Thu Dec 27, 2018 8:15 am Stocks down, Gold and LTT’s up at end of pre-market.

Will the day end this way or should we expect to see a reversal with stocks ending up, Gold and LTT’s flat to down? The question to ask yourself...”is this pattern actionable.”

Can we continue to ignore this pattern?
Borderline ridiculous, right?
Intra-day PP swing of -.71% to +.48% (quite impressive, too bad I was taking a nap to watch it happen in real-time)

Hey Bud! Hope you had a Merry Christmas. Here is my perspective on what is happening.

1. The FED is raising interest rates (by definition that's bad for long-term treasuries) so LTT is going to be DOWN
2. Point #1 means that inflation is less likely, the FED is trying to get ahead of inflation and plans to raise rates to combat it so gold is DOWN
3. The market fears that the fed is a bit over-zealous and aiming towards deflation so the market is DOWN
4. Cash is king! Literally every asset class has suffered except CASH this year it seems. CASH is UP, and T-bills are yielding over 2.4% for me now

So going back to the basis of the portfolio, what economic circumstance are we in?

Prosperity? (seems like that is coming to an end, certainly the era of easy money is)
Recession? (maybe in the future, but certainly not in one right now)
Inflation? (again seems the fed has that under control, or trying at least)
deflation? (seems like the most likely of the 4 states)

The PP remains apathetic to all of this and thus we still hold long-term treasuries despite rising rates, and we hold gold despite inflation expectations being hampered by those same rates, and we hold cash just in case as this thread talks about everything else is down.

Cash (T-bills in particular) will go down as one of the best performing asset classes of 2018. That in my opinion is a strong sign of the wisdom of the PP.

Full Disclosure: I have migrated to the "Golden Butterfly" approach as advocated by Tyler on his website because I felt that I was under-exposed to equities for my higher risk tolerance. i.e. I considered the risk of losing out on returns greater than the risk of me selling in a bear market.

^^^
Great post.

+1

I also have extra exposure to equities. My equity exposure is 30% US 30% ROW (including emerging markets). The remaining 40% is divided equally between Gold, LTT, and STT.

I am very comfortable with this tilt toward equities and international stock exposure.

Ha, only on this forum can a 30-40% stock allocation be considered going out on a limb :-)

At the family Christmas party, the subject of the stock market came up. At one point someone asked me "How come you're so calm about this? We're all stressed out because our retirement accounts are vanishing before our eyes!"

Thank you Harry Browne! And Tyler, because I'm working toward Golden Butterfly-land also.

sophie wrote: ↑Sat Dec 29, 2018 10:56 am At the family Christmas party, the subject of the stock market came up. At one point someone asked me "How come you're so calm about this? We're all stressed out because our retirement accounts are vanishing before our eyes!"

Thank you Harry Browne! And Tyler, because I'm working toward Golden Butterfly-land also.

Congrats on setting a good example! Data only goes so far, and IMO there's no better way to evangelize wise investing techniques than to have people take notice of your distinctive lack of stress.

Any love here for The Desert Portfolio that has outperformed the PP since 2008 with less volitility?

Hi, Folks and Tyler,

Am i wrong but it seems the Desert Portfolio has been removed from Portfoliocharts.com.

The Desert Portfolio is a lovely portfolio.

I may not be looking in the correct place. Wouldn't be the first time.

Thanks.

bedraggled wrote: ↑Sat Dec 29, 2018 11:24 pm Hi, Folks and Tyler,

Am i wrong but it seems the Desert Portfolio has been removed from Portfoliocharts.com.

The Desert Portfolio is a lovely portfolio.

I may not be looking in the correct place. Wouldn't be the first time.

Thanks.

Good eye. Yes, I recently removed the Desert Portfolio from Portfolio Charts. It's still a wonderful asset allocation, but as the site grows I'm being a little more picky about the portfolios I curate for the list. Having things like books I can point to helps keep things looking professional.

But as thanks to Desert and the rest of the group here, here's a permanent link to the page with the historical data: https://portfoliocharts.com/portfolio/desert-portfolio/

Tyler,

Thanks for the link.

I have heard math people refer to elegant solutions. Is the Desert Portfolio an elegant portfolio or just terrific.

I reflect on the Desert concoction as it might be perfect for a person who truly wishes to “set and forget.” Yes, I know the Golden Butterfly has had at most 2 consecutive down years but with the Desert, why bother looking at all. Craig Rowland checks once per year with th HBPP but with the Desert, a person could misplace all paperwork and forget passwords- and, so what? Maybe find the info in 5 years. No rush or worry....

Desert Portfolio might be really good for a person with $10 million. That person has won the race.

I guess I wait for the GB and 4x25 people to point to some things I missed.