Where to Start Out...

General Discussion on the Permanent Portfolio Strategy

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KaizenKings
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Where to Start Out...

Post by KaizenKings » Thu Jan 03, 2019 8:15 pm

Hello all,

I am very blessed to have found this forum and to find Craig Rowland's blog posts.

I am very new to investing. I devoured Craig Rowland's book and I have the basics down for the most part.

Admittedly, I am human and would like advice from the Permanent Portfolio Pros.

Out of the 4 allocations, what would a good starting place right now in today's market? Where should I start at?

Stocks? I.E. IVV? VFINX?

Bonds? iShares Treasury Long Term Bond ETF (Ticker: TLT)?

Precious Metals? I am going to start silver stacking because it's at a good price...

etc etc.

Any suggestions would be appreciated!
whatchamacallit
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Re: Where to Start Out...

Post by whatchamacallit » Thu Jan 03, 2019 8:42 pm

First off, silver is not part of permanent portfolio. Most important reason for me is because central banks don't hold it anymore.

https://www.google.com/amp/s/seekingalp ... banks-dont

What assets do you currently hold? Stock or bond index funds? If you were comfortable with current asset holdings I would recommend buying your lagging asset with future contributions to get to new desired allocation.

All in approach might cause regret.

That is the advice I would give family if they were interested in diversifying.

Plenty of suggestions on forum for funds to accomplish portfolio.

If just getting started from scratch, Fidelity feels like winner lately with zero expense funds.
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Mark Leavy
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Re: Where to Start Out...

Post by Mark Leavy » Thu Jan 03, 2019 10:26 pm

Hi Kaizen Kings. Welcome.

The permanent portfolio is a bad deal if you go in one asset at a time.

If you don't have enough funds to buy some portion of each asset at your entry point, then just keep accumulating your cash in a savings account or mutual fund until you feel you have enough to jump in and buy your target percentages of each asset.

Good luck. And please spend some time reading some of the earlier forum posts. There is a wealth of information here.

Mark
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europeanwizard
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Re: Where to Start Out...

Post by europeanwizard » Fri Jan 04, 2019 12:31 am

Just to make sure, you're based in the US? Because if not, then you'd get different advice.
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ochotona
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Re: Where to Start Out...

Post by ochotona » Fri Jan 04, 2019 6:14 am

whatchamacallit wrote:
Thu Jan 03, 2019 8:42 pm
First off, silver is not part of permanent portfolio. Most important reason for me is because central banks don't hold it anymore.
....
All in approach might cause regret.
I agree with the above points.
jacksonM
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Re: Where to Start Out...

Post by jacksonM » Fri Jan 04, 2019 2:31 pm

I think HB recommended going all in with the PP and that's what I did when I started. I remember listening to a podcast where he talked about some guy who couldn't take the plunge on long bonds because he thought interest rates had nowhere to go but up. As HB pointed out, that's just a classic case of trying to time the market when, in fact, the guy had no idea whether interest rates were going to go up or down (and I think they went down while he was waiting if I remember correctly).

If you had a stock heavy portfolio and went all in on the PP at the start of last year you would probably be happy with your decision right now. If it was the year before when the stock market was on fire, probably not so much.

As HB said, you really can't predict the future so there is no point in trying.
DragonJoey3
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Re: Where to Start Out...

Post by DragonJoey3 » Fri Jan 04, 2019 2:34 pm

You should definitely ensure you are going "all in" if you are going to go in, buying one or 2 assets would leave them uncorrelated and result in unbalancing the portfolio.

Depending on the amount of assets you have would depend how I would go about setting it up.
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Re: Where to Start Out...

Post by stuper1 » Fri Jan 04, 2019 3:59 pm

KaizenKings,

You say that you are new to investing. If you feel comfortable telling us more about yourself (your age, number of years to retirement, annual savings rate compared to annual expenses, employability, access to 401k, etc.), we may be able to give you some better advice. Harry Browne recommended the PP for the money that you absolutely don't want to lose. It's a great portfolio for that. You won't get the highest returns, but you also have much less risk of losing money than many portfolios. A lot of people invest some of their money in the PP and some of their money in a Variable Portfolio that has a higher risk/reward profile. If you are young, have many years to retirement, and have steady employment prospects, then putting all of your money into the PP may be overly conservative.
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Kbg
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Re: Where to Start Out...

Post by Kbg » Fri Jan 04, 2019 4:54 pm

Well I'll be a little more to the point for a starter PP implemented by using ETFs:

Long Treasuries: SPTL or TLT
Short Treasuries/Cash: VGSH, SHV, BIL or a savings account/CD at a bank (any of these will be fine for your cash)
Gold: SGL
Stocks: VTI

25% each, rebalance annually or when one gets to 20% or 30%.

M1 Financial is basically a free brokerage and has the capability to put the whole thing on autopilot for you.

Once you get more knowledge under your belt by reading some of the key posts here, you can branch out to actual treasury bonds, bullets vs. barbells for bonds, physical gold, various cash management approaches, tax/account type strategies and several rebalancing strategies you can study up on.

For sure all the questions raised earlier about your specifics are completely on point and humans love to dissect and tinker with the basic machine (lots of that here), but a do it now and make it easy for me PP, there you have it.
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ochotona
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Re: Where to Start Out...

Post by ochotona » Thu Jan 17, 2019 1:17 pm

My Rowland and Lawson book review was published...

http://thegreatrecession.info/blog/perm ... ry-browne/
KaizenKings
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Re: Where to Start Out...

Post by KaizenKings » Mon Feb 11, 2019 2:58 pm

Kbg wrote:
Fri Jan 04, 2019 4:54 pm
Well I'll be a little more to the point for a starter PP implemented by using ETFs:

Long Treasuries: SPTL or TLT
Short Treasuries/Cash: VGSH, SHV, BIL or a savings account/CD at a bank (any of these will be fine for your cash)
Gold: SGL
Stocks: VTI

25% each, rebalance annually or when one gets to 20% or 30%.

M1 Financial is basically a free brokerage and has the capability to put the whole thing on autopilot for you.

Once you get more knowledge under your belt by reading some of the key posts here, you can branch out to actual treasury bonds, bullets vs. barbells for bonds, physical gold, various cash management approaches, tax/account type strategies and several rebalancing strategies you can study up on.

For sure all the questions raised earlier about your specifics are completely on point and humans love to dissect and tinker with the basic machine (lots of that here), but a do it now and make it easy for me PP, there you have it.



Ok thanks for the help guys.

I do have a Roth 401k and Roth account at my job. I save 15% of every check in it. I do receive a employer match. Currently, these are the options offered by Voya (the admin company in charge of the 401ks etc)


STABILITY OF PRINCIPAL
4062 Voya Fixed Account (4062) 0%

BONDS
0898 Vanguard Total Bnd Mrkt Ind F Adm
6081 Western Asst Core Bond Fund Is
6589 PGIM High Yield Fund R6

ASSET ALLOCATION
1971 American Funds 2010 Tdate R6
1973 American Funds 2015 TDate R6
1975 American Funds 2020 TDate R6
1977 American Funds 2025 TDate R6
1979 American Funds 2030 TDate R6
1981 American Funds 2035 TDate R6
1983 American Funds 2040 TDate R6
1985 American Funds 2045 TDate R6
1987 American Funds 2050 TDate R6
1989 American Funds 2055 TDate R6
9639 American Funds 2060 TDate R6

BALANCED
7027 American Funds Am Balancd R6

LARGE CAP VALUE
0899 Vanguard 500 Index Fund Adm
1990 American Funds Wash Mtual R6

LARGE CAP GROWTH
3665 MFS Growth Fund R6
7577 TRowePrc Blue Chip Growth Fund I

SMALL/MID/SPECIALTY
0756 Vanguard Mid-Cap Index Fund Adm
0757 Vanguard Small-Cap Index Fund Adm
1438 DFA Real Estate Securities Port Inst

GLOBAL/INTERNATIONAL
1723 American Funds EuroPacific R6
1960 American Funds CapWld G&I R6
3491 American Funds New World R6
9889 Vanguard Total Intl Stk Index Fd Adm
C380 MFS Intl Diversification Fnd R6



They currently just moved the entire company to Voya. They have me 100% in 1987 American Funds 2050 TDate R6 (target retirement date asset allocation). I am looking to change of course.

Using the Permanent Portfolio mentality, I would like to put 15% into the Vanguard 500 Index Fund and then put 5% into the Global/International Vanguard Total Intl Stk Index Fd Adm. This would cover the 20% stocks (5% international optional).

Maybe keep the other 80% in the target fund and hit the other aspects of the portfolio outside of the 401K?
Maybe look into M1?
KaizenKings
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Re: Where to Start Out...

Post by KaizenKings » Mon Feb 11, 2019 3:08 pm

stuper1 wrote:
Fri Jan 04, 2019 3:59 pm
KaizenKings,

You say that you are new to investing. If you feel comfortable telling us more about yourself (your age, number of years to retirement, annual savings rate compared to annual expenses, employability, access to 401k, etc.), we may be able to give you some better advice. Harry Browne recommended the PP for the money that you absolutely don't want to lose. It's a great portfolio for that. You won't get the highest returns, but you also have much less risk of losing money than many portfolios. A lot of people invest some of their money in the PP and some of their money in a Variable Portfolio that has a higher risk/reward profile. If you are young, have many years to retirement, and have steady employment prospects, then putting all of your money into the PP may be overly conservative.
Hi, I am 31 year old. I currently am working, making around $70-$85K a year depending on bonus, overides etc etc...
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