5 year ladder vs Cash and 30 year barbell

Discussion of the Bond portion of the Permanent Portfolio

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sophie
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Re: 5 year ladder vs Cash and 30 year barbell

Postby sophie » Sat Aug 12, 2017 5:13 pm

I think Jack Bogle and Harry browne would have gotten along. I wonder if they ever met?

In regards to the proportion of gold in the PP...it's not arbitrary, it was based on a set of simulations run by Harry Browne. He doesn't report the results as far as I know, but describes the outcome in one of his books. Also, Tyler's portfolio charts supports at least a 20% gold allocation. Look at what happens in the 1970s - 10% or even 15% gold wasn't enough to sustain a portfolio through that time period. I know everyone wants to discount the 1970s, as if it couldn't happen again. Hopefully afros, disco, shag carpeting, and 1970s architecture won't ever come back, but I'm not as confident about the financial conditions.

10% is better than nothing and easier for most people to stomach, which I guess is the idea of the Desert Portfolio. Sustainable trumps optimal after all!

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