Take a look at the past year's returns. The YTD number is misleading, because the fund happened to be down quite a bit at the end of the year.
However...I go with MT's analysis on this one. You're paying someone a pretty hefty expense ratio to save the trouble of buying 4 ETFs and rebalancing every couple of years. Compared to most "slice & dice" portfolios, the traditional PP is not so difficult to implement. I do own a chunk of 90% PRPFX/10% EDV mainly for historical reasons - it's how I got introduced to the PP - but I'm debating between keeping it as a separate intermediate-savings fund, and just selling it and sticking with a pure 4x25 PP.
"Democracy is two wolves and a lamb voting on what to have for lunch." -- Benjamin Franklin
Perm trades for free at e trade and I wanted to make small contributions each month.
If I set up a 4x25 using eft's i would have to pay a 9.00 trade fee each time i wanted to add the planned 50 bucks a month.
I was thinking of using perm as a super savings account. I got the ides from reading Pointedsticks post in a different thread.
The trade fees are what I was really trying to get around by using perm but I did not want to invest until you guys give it your blessing... I am new to the HBPP concept so I really don't know if it's a good fund or not...
I actually sold all my PERM for a large purchase that I didn't end up making, and it seemed silly to re-buy what I just sold, so I ended up putting the cash in a 4x25 PP. But while I held that PERM, I'll say that it performed exactly as I expected it to.
That said, if the only thing that's holding you back from using a 4x25 PP are the fees, there are many brokerages such as Vanguard, TDAmeritrade, and Schwab that have commission-free ETFs for everything you need but gold. Although it's true that you really can't beat the convenience of just buying shares of a single commission-free ETF like PERM.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
GT wrote:
Perm trades for free at e trade and I wanted to make small contributions each month.
If I set up a 4x25 using eft's i would have to pay a 9.00 trade fee each time i wanted to add the planned 50 bucks a month.
Not a bad way to get started, if that works better for you. E-trade doesn't sound like such a good deal for you though. If you don't mind setting up 4 automated contributions at, say, Vanguard, you could accomplish the same thing for 40 fewer basis points and and no transaction costs (not 100% sure if there is a no-fee gold fund though).
If you have small amounts to invest, an alternative is to put the money into a cash account, wait for it to accumulate and then buy the other assets periodically.
"Democracy is two wolves and a lamb voting on what to have for lunch." -- Benjamin Franklin
Ad Orientem wrote:
I have been ill and have spent very little time on the internet for over a month but I too would be interested if anyone has some observations on PERM's performance.
If I set up a 4x25 PP at Vanguard, I would get 25 trades for $7 to purchase the gold ETF. After the 25 trades the price goes up to $20 per trade. The Vanguard ETF's do not have a trade fee.... I guess I could over purshase gold on my first $2k to 3k portfolio start up, up to the 35% band, and then add the monthly $50 amount to the Vanguard ETF's to balance out the portfolio. That would get around the trade fees but increase the risk. .....Might be more trouble than it's worth but I like the idea of a super savings account.
JonathanH wrote:
After all this Cyprus stuff, PERM is up and PRPFX is down! Perhaps a correlation with long term treasuries going up at this time as well?
I think you're seeing the bears and the inflationists have thrown in the towel and accepted that QE is happening. Therefore money has rotated into stocks, and out of gold, PRPFX, and cash in recent months.
JonathanH wrote:
After all this Cyprus stuff, PERM is up and PRPFX is down! Perhaps a correlation with long term treasuries going up at this time as well?
Yes, and PRPFX's 10% Swiss Franc assets are not helping.
JonathanH wrote:
After all this Cyprus stuff, PERM is up and PRPFX is down! Perhaps a correlation with long term treasuries going up at this time as well?
Yes, and PRPFX's 10% Swiss Franc assets are not helping.
Some may recall me debating endlessly what to do with my medium term savings - PERM, PRPFX or 4x25 PP. I went with a 4x25 PP. I put the money in just a few weeks ago. So far I'm up and can't complain!
I feel good about the decision overall and would recommend it. I need to stop checking it so often, but you really can see the asset classes working their magic as a whole from day to day. I feel good knowing I have some institutional diversification and not plunking it all in the hands of one fund/set of managers. It's also easy to do. I agree with others that said if you're making small monthly contributions and don;t want to pay transaction fees, just dump it into cash until it accumulates, then buy the other assets. Could be a good way of buying other assets when they're low too.
