The GOLD scream room

[Tyler]

Explaining how your observations about the PP vs your 70/30 portfolio jive with history is sorta tricky, and it inspired me to tinker with a new calculator that directly compares portfolios. It's still a work in progress, but I'll give you a sneak preview as I think it will help.

For anyone interested in playing with the numbers for themselves, the tool is now live.

https://portfoliocharts.com/2018/02/26/ ... -accuracy/

Try a few portfolios with and without gold, and you'll start to really appreciate its ability to raise the floor on returns.

@Budd -- No matter what asset allocation you ultimately settle on, my hope is that you find an archer you trust enough to let her do her job without so much worry about the precise location of every arrow.

[blue_ruin17]

Yet another amazing calculator, Tyler.

[eufo]

For anyone interested in playing with the numbers for themselves, the tool is now live.

I'm sure I speak for everyone when I say your continued hard work is greatly appreciated, Tyler! It's interesting to compare the more volatile portfolios with either PP, GB, or my own concoction. There is a kind of WANT to see that 15 year looking stronger, but it's the tradeoff for a more stable allocation. How might you interpret these two portfolios? The orange is my own allocation... the black is my good friend's allocation.

[Tyler]

It's interesting to compare the more volatile portfolios with either PP, GB, or my own concoction. There is a kind of WANT to see that 15 year looking stronger, but it's the tradeoff for a more stable allocation. How might you interpret these two portfolios? The orange is my own allocation... the black is my good friend's allocation.

I hear you on the desire to up that 15-year return, but sometimes the best answer to upping your returns is not to add more investing risk but to stick with a highly dependable portfolio that works well for you and simply save a little more. That gets you the best of both worlds -- higher account values and greater accuracy.

Also, it's important to keep an eye on the big picture and look at the options from few different perspectives. For example, your portfolio looks a lot more appealing in the Drawdowns calculator. Different people are motivated by different things, so it's hard to make generalizations. The best I can do is offer some tools to help people figure that out for themselves.

And as a side note, I'd personally take special note of that estimated tag on portfolio B resulting from the high EM allocation. That asset in particular has a lot of potential tracking error. I offer the best estimate I can give with the data I have available, but I can't guarantee the results for an EM allocation that high.

[eufo]

Also, it's important to keep an eye on the big picture and look at the options from few different perspectives. For example, your portfolio looks a lot more appealing in the Drawdowns calculator. Different people are motivated by different things, so it's hard to make generalizations. The best I can do is offer some tools to help people figure that out for themselves.

Yes. Your site is how I decided on my current allocation. I think it blends together stability and returns in a way that works for me. I also like my same allocation minus cash, but find it harder to follow, so, for now, I'll keep cash.

And as a side note, I'd personally take special note of that estimated tag on portfolio B resulting from the high EM allocation. That asset in particular has a lot of potential tracking error. I offer the best estimate I can give with the data I have available, but I can't guarantee the results for an EM allocation that high.

Personally, I think he's nuts to hold that much EM, but he seems to love it for now. I think he'll change his mind after a drawdown. I'm also estimating his bond allocations. He's technically 20% Total Bond Market and 20% TIPS. I think you used to have TIPS on your site, didn't you? I never really liked them.

Thank you for your response. I shouldn't be filling "The GOLD scream room" with this. Lol!

[ochotona]

Why did gold spike today? Isn't the Fed being hawkish?

[buddtholomew]

Why did gold spike today? Isn't the Fed being hawkish?

duh...Libertarian666's recent purchase obviously raised the price

[Cortopassi]

https://www.investopedia.com/articles/i ... s-gold.asp

Despite widespread popular belief of a strong negative correlation between interest rates and the price of gold , a long-term review of the respective paths and trends of interest rates and gold prices reveals that no such relationship actually exists. The correlation between interest rates and the price of gold over the past half century, from 1970 to 2015, has only been about 28%, which is considered to be not much of a significant correlation at all.

Given the historical tendencies of the actual reactions of stock market prices and gold prices to interest rate increases, the likelihood is greater that stock prices will be negatively impacted by rising interest rates and that gold may in fact benefit as an alternative investment to equities.

[Libertarian666]

Why did gold spike today? Isn't the Fed being hawkish?

Don't worry, I'm sure this is just a glitch in the matrix. Gold should be plunging because I just bought a chunk!

[ochotona]

Fed was interpreted as dovish

http://www.kitco.com/commentaries/2018- ... ourse.html

[Mr Vacuum]

It's working today, budd!!!

[Cortopassi]

Sure is!

[buddtholomew]

I guess...
Gold closed at the lows + 1.3 with the S&P down 2.1%. TLT was down so nothing magical.
70/30 allocation is bruised but to be expected. After today, both 70/30 and PP should be down about the same YTD.

[Mr Vacuum]

Classic, budd. I spoke too soon while the stocks loss was smaller. But corto is also right on: gold is still tops on the YTD (and has been the 3mo leader all month).

[buddtholomew]

Classic, budd. I spoke too soon while the stocks loss was smaller. But corto is also right on: gold is still tops on the YTD (and has been the 3mo leader all month).

I can’t let the team down now
The benefits of holding a PP over an equity-centric portfolio are becoming much more evident as my variant of the PP is 1/5 the volatility of the 70/30 over the last couple days.

[Libertarian666]

Classic, budd. I spoke too soon while the stocks loss was smaller. But corto is also right on: gold is still tops on the YTD (and has been the 3mo leader all month).

I can’t let the team down now
The benefits of holding a PP over an equity-centric portfolio are becoming much more evident as my variant of the PP is 1/5 the volatility of the 70/30 over the last couple days.

Glad to hear that you are finally seeing some benefits!

[Ugly_Bird]

Glad to hear that you are finally seeing some benefits!

Just wait a little. :-)

[dualstow]

Doesn't warrant its own thread, but here's an opinion piece from the WSJ on metal tariffs, gold and fiat money. (Really the latter two).
I am not for or against it; just think of me as a bot responsible for bringing gold-related articles here.
I made an archive so you should be able to read it without a subscription.

http://archive.is/d3eES

[buddtholomew]

So sad, but expected for sure.

[Cortopassi]

Just a little happy screaming here...

[Cortopassi]

Well, SO glad the latest WWIII crisis has been averted...at least until tomorrow.

What an amazing change in volatility 2018 has brought.

[buddtholomew]

That’s the PP for you.
Gold and Treasuries selling off post false positive crisis.
I feel even more confident holding a higher percentage in equities.

[ochotona]

Schwab just published a note to clients suggesting as much as 9% of a portfolio could be devoted to gold. I've never heard that from them before.

[dualstow]

Schwab just published a note to clients suggesting as much as 9% of a portfolio could be devoted to gold. I've never heard that from them before.

Did they give a reason for that (maximum) percentage?

[ochotona]

Schwab just published a note to clients suggesting as much as 9% of a portfolio could be devoted to gold. I've never heard that from them before.

Did they give a reason for that (maximum) percentage?

No reason given. Here's the article:

https://www.schwab.com/resource-center/ ... cmp=em-QYD