Unhealthy appetite for loss

[pplooker]

That phrase was used to describe me last weekend.

Like most people, I'm complicated and weird.  On the one hand I want security.  On the other hand I want to take chances.  Hence my investing approach.  And for the record I do not advocate or encourage it, it is simply what I choose to do and life is all about being happy with your own choices.

The VP side of my portfolio, in recent weeks, has taken something of a beating, but I am unconcerned and keep charging ahead and sticking to the plan.  To me that's all there is to it, once it's in place, it's a relatively simple little numbers game of keeping a proportion constant.  When the bottom dropped out in 2008, I really didn't react that much if at all.  I didn't change a blessed thing.

I'm not meaning to sound like I'm bragging, but this is how somebody took these statements a while back, saying I had an "unhappy appetitie for loss" and my ways would lead to ruin.  I guess I am strange in that I can mentally and emotionally divorce myself from invested monies, and not everyone can do that.  I've never had to work at it either, I didn't read a book, I don't do thought exercises, and it's not based on a personal belief.  If the balance dropped to zero I'd not waver, lose sleep, or wring my hands.  In fact the only reason I got into the PP was I wanted to save me from myself.  While my VP approach is very boring and orthodox and sensible by most standards, it's still very risky.

And its very weird, because short term immediate things stress me out all the time.

But it made me think, maybe a bunch of adherents to the Permanent Portfolio simply lack that ability to just not care like that; in fact Browne was quite explicit you do not need a VP for anything unless you simply desire one, yet he was quite a speculator par excellance.  What is it that gives some people this tolerance but not others?

[Pkg Man]

I think I had something close to that "Zen" feeling about my investments a few years back.  I didn't panic during the 2008 debacle, as some friends did, but I sure didn't relish the prospect of not being able to retire when I had originally planned.  I was unfortunate in that I didn't find the PP ten years earlier, but I was VERY fortunate to have found it about three months ago, as opposed to say one year ago, when the market was just taking off again.

One's appetite for risk almost always decreases with age.  With age comes the realization that we don't get an unlimited number opportunities to start over and still be able to end up at the same place we had intended. 

[MediumTex]

The measure I would use of any strategy is whether it works for you.

If it works for you, do it.

You might try writing down a couple of investing goals at the beginning of each year and then check your results against those goals at the end of the year.  If your investing results diverge significantly from the goals you set for yourself, perhaps you should reconsider your strategy.

No one has to understand it except you.