Golden Butterfly

[LittleDinghy]

I believe WiseOne means "40% bands" for the PP as 0.25 ± 40% (or 0.25 ± 0.10, from 0.35 to 0.15). And "30% bands" for the GB as 0.20 ± 30% (or 0.20 ± 0.06, from 0.26 to 0.14).

Yes, I'm confident that is what she meant. However, what I don't understand is her reasoning for using "30% bands" for her GB. I implemented the GB for my portfolio and decided to use 40% bands (yielding 0.2 ± 0.08 = 0.12 to 0.28) simply because that is the band percentage recommended for the PP. For some reason that I don't understand, WiseOne decided to use 30% bands for her GB rather using 40% bands. I'd really like to understand her reasoning. It may be that I should use 30% bands as well, but I don't want to make that decision without understanding the reason why.

[Hal]

As far as rebalance bands - the 40% bands that work well for the PP won't work as well here, because 8% of any one asset is too little. So I set mine for 30% bands (14-26%).

Hi LittleDinghy,

Hope this snippet from WiseOnes earlier post helps explain her rebalancing rationale

Hal

[WiseOne]

Thanks Hal!

That was indeed my rationale. I wanted the GB asset allocations to stay within the "safe" range established for the Permanent Portfolio. I sort of consider it a PP with stocks kept on the high end of the range, and the other assets kept on the low end. Plus, my read of Tyler's real return charts suggests that 10% gold (for example) isn't enough to prevent the portfolio from suffering multi-year losses in eras like the 1970s.

[LittleDinghy]

WiseOne, please see my more complete original questions at the post by LittleDinghy on Sat Dec 28, 2019 8:43 am. Thank you. I'd really like to more thoroughly understand your reasoning.