3 years of PP returns

General Discussion on the Permanent Portfolio Strategy

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modeljc
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Re: 3 years of PP returns

Post by modeljc » Fri Jun 21, 2019 9:18 am

sophie wrote:
Fri Jun 14, 2019 7:02 am
The low 2018 return is a bit artificial. If the year had ended a few weeks later or earlier, it would be a whole different story. The YTD 2019 returns reflect the deep transient market dive at year's end: the PP stands at 7.8% and GB at 9% - and this is just for the first half of the year!

Even though the PP is still doing its thing, it generates enough angst that it should be considered a significant disadvantage of the portfolio. If you'd have less angst with a traditional stock/bond portfolio with the cash on the side (and thus not counted in total returns), then maybe that would be better despite the occasional steep drawdowns. That's because when those happen, you have a massive support group e.g. the entire Bogleheads platform and its prolific collection of authors. With the PP's "tracking error", in which it lags traditional portfolios when stocks are doing well and includes your cash savings in the mix, there's not much beyond this forum and a couple of books for consolation.

The whole point of the PP is to reduce investing stress by increasing portfolio safety, but not everyone values that. It defeats the purpose if you end up increasing your stress by holding the PP. FWIW, the angst passes after a few years for most people, judging by the experience on this forum. I've even gotten to the point where what stresses me the most is the traditional three fund portfolio that I hold in my 403b accounts. That doesn't happen for everyone though, and for some people the PP is just not a good idea.
Like Sophie said a few weeks later it would be a whole different story:

13 days later

1 year PP= 8.6%

2 year rolling returns = 6.1%

3 year returns = 5.3%

YTD = 10.0.

After 2.2% of inflation and 13 days later the PP is back to it's historial returns.
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europeanwizard
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Re: 3 years of PP returns

Post by europeanwizard » Mon Jun 24, 2019 12:32 am

mathjak107 wrote:
Tue Jun 11, 2019 5:18 am
what i find funny is when there is a short term market downturn everyone seems to cheer about how the pp did so well by not falling but when the results are weak for 3 years all of a sudden you can't tell much from the short term .
Please keep posting. I very much appreciate your critical view.
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