Always respected your thoughts, Ryan. Congrats on getting your CFA. Since you are no longer in favor of gold, I am curious what portfolio you would advise someone in the following 2 circumstances. Low tolerance for sustained drawdown in both scenarios.melveyr wrote: I don't think the PP is a good strategy right now. The PP is only different from BH strategy because it advocates for a bond barbell and gold ownership; neither make sense to me now. Holding an intermediate term bond portfolio instead of the cash/ltt has a higher sharpe ratio and I am very confident it will continue to do so in the future. LTT treasuries act like a levered version of intermediate term bonds, so why would you want to delever that with cash that is earning 0%? The cost of implicit leverage in the LTT is higher 0%, so if you really wanted less leverage why not just use ITT? I posted about that in 2012 here
http://gyroscopicinvesting.com/forum/pe ... cal-logic/
and the intermediate term bond portfolio has continued to outperform since then (just go to ETF replay and test the sharpe ratio of 100% TLH vs the 50/50 blend of TLT and SHY).
A heavy gold weighting has really hurt the PP. I am always trying to learn more about how the monetary system works and I found that the main advocates for gold were using old models that have already been proven wrong. I am young and always trying to learn more (going for CFA level 3 this June), and it would be a shame to not incorporate new knowledge into how I make decisions. Gold ownership can still make sense, especially if you hold LTT, but the weighting in the PP is too high.
1. Someone who is nearing retirement and has accumulated, say a million or two distributed evenly among taxable and tax deferred accounts. Age 60.
2. Someone without a lot of saving who recently entered the beginning of the most productive phase of career, say age 37.