So in plain English, the 40% refers to swings, not bands? I posted something about that above and then swiftly deleted that part, plagued by self-doubt.
Golden Butterfly
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Re: Golden Butterfly
- LittleDinghy
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Re: Golden Butterfly
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.
Re: Golden Butterfly
Hi LittleDinghy,
Hope this snippet from WiseOnes earlier post helps explain her rebalancing rationale
Hal
Re: Golden Butterfly
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.
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.
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Re: Golden Butterfly
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.