No Brainer Permanent Portfolio

[Hal]

In this article they talk about a variation to the PP

http://somehelpful.info/Finance/No-Brainer-PPF.htm

So the question is this.
While gold is thought of as a hedge against inflation, can silver fulfill this role as well?

Any other thoughts on the article are welcome !

[ochotona]

I don't think silver takes the place of gold. Silver is industrial also, and if the economy tanks, so will silver. Just exactly not the behavior you want. Too volatile and too bulky for me. Maybe have some for barter, sure.

[buddtholomew]

Scanned the article, but there is no stock or bond allocation. This is not the Harry Browne PP.

[mathjak107]

gold has really not been an inflation hedge except over many many decades like 60-70 years . it has not performed that well as an inflation hedge at all in the shorter term . in fact for most of history a t-bill surpassed it in that regard .

[barrett]

gold has really not been an inflation hedge except over many many decades like 60-70 years . it has not performed that well as an inflation hedge at all in the shorter term . in fact for most of history a t-bill surpassed it in that regard .

I believe Harry Browne was really clear in his radio shows that his expectation was that gold would do very well once inflation hit "say, six percent or so". So it's in the PP to smooth out returns in situations where stocks can't keep up with inflation. If it consistently beat inflation, one could easily argue for a portfolio that was super gold heavy.

[mathjak107]

In this article they talk about a variation to the PP

http://somehelpful.info/Finance/No-Brainer-PPF.htm

So the question is this.
While gold is thought of as a hedge against inflation, can silver fulfill this role as well?

Any other thoughts on the article are welcome !

it really depends on the dollar and confidence in the dollar. it may take high inflation and loss of confidence in the dollar to do much . but just as protection against moderate levels of inflation i have to score gold as a "D" no real inflation hedge there .

silver is primarily an industrial metal . in 2008 we saw gold rise while silver plunged like every other commodity .

[barrett]

Scanned the article, but there is no stock or bond allocation. This is not the Harry Browne PP.

Not only that but the author was wrong on all the market trends he saw as likely to occur (the linked piece was from 2010). Gold was unlikely to go down, stocks were unlikely to go up, etc. Extreme case of recency bias... except that stocks by that time were already moving up strongly.

[Hal]

Thanks for your comments.

They prompted me to investigate a bit further, and while there seems to be some correlation, I cannot see a reason to hold silver.
Except, perhaps, to trade the gold silver ratio which seems to recently be in a channel of 50/1 to 80/1.

Suspect the author was trying to model a "savings account" based on the PP concept.

http://www.macrotrends.net/2517/gold-pr ... ical-chart

[dualstow]

The title is redundant!

[grapesofwrath]

The stupid article suggests a Permanent Portfolio with No Brain.