PP Performance for 2016

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sophie
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PP Performance for 2016

Post by sophie » Mon Jan 02, 2017 11:13 am

How did you all do investing-wise this year?

Despite the recent market downturns, I was pleasantly surprised by my calculated returns for this year (1/1/16 - 1/1/17). Here's my results:

PP (standard 25x4): 5.88%
TIAA-CREF (a mix of 60% stocks and real estate, and 40% guaranteed income - no bonds): 6.02%
Vanguard (standard 3 fund portfolio with 40% US total market, 10% international, 50% total bond): 6.53%

Edit to answer Desert's question: The PP encompasses my taxable savings plus accounts over which I have full control e.g. Roth IRA and HSA. The other two are typical active employer 403b accounts (read: non PP-friendly). The PP is a little over one third of the total. Yes I would like for more of my savings to be in the PP, but tax deferral is the higher priority.

The PP is slightly underestimated as the interest on about half the cash ends up getting counted in a non-PP bucket, so the true return is closer to 6%. This is a real return of just over 4%, if you accept last month's CPI of 1.7% for the 2016 inflation rate.

And, what's your "investing todo list" for 2017? I think I'd like to pull the TIAA-CREF investments down to 50% stocks/real estate. Also my next gold purchase is going to be through an international depository. The top candidate right now is the Perth Mint certificate program via a US distributor, but I'd prefer the Perth Mint depository program if the minimum has come down from $50K.
Last edited by sophie on Mon Jan 02, 2017 12:12 pm, edited 2 times in total.
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Desert
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Re: PP Performance for 2016

Post by Desert » Mon Jan 02, 2017 11:39 am

It's interesting to see that the returns from the three buckets were nearly identical this year. I'm curious what percentages you hold in each bucket.

My portfolio of 10/10/10/10/10/50 EM/SCV/TSM/GLD/LTT/CD's returned 6.57% this year. I'm happy with anything around 4% real return in this era of low rates. For 2017, I'll continue buying LTT and equity in the tax-deferred accounts, and stashing as much cash away as possible after tax in preparation for a long overdue career change.
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I Shrugged
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Re: PP Performance for 2016

Post by I Shrugged » Mon Jan 02, 2017 12:55 pm

5.4%

25% cash and short bond fund
33% stocks, about 1/3rd intl
25% LT bonds, split between Treasuries, Munis, and others
17% gold

The international has dragged me down a bit over the past 2-3 years, I think. I don't know all the breakdowns.

I've had roughly the same AA, within rebalancing bands, since 2009. Prior to that I was a basic Boglehead, probably 60-40 ish.

Longer term:
3 years 3.1%
5 y 3.2%
10y 3.9%
15y 5.9%
20y 5.8%

Honestly I don't know if those are good, or not. It could be worse, that's for sure.
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Cortopassi
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Re: PP Performance for 2016

Post by Cortopassi » Mon Jan 02, 2017 1:21 pm

6.17%,

5 EM
5 SCV
25 TSM
25 LTT
25 GOLD
5 SILVER
10 CASH
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Re: PP Performance for 2016

Post by drumminj » Mon Jan 02, 2017 6:33 pm

Huh. Y'all are making me feel worse about my outcome this year :-\ Mine was 2.8% with a pretty much standard 4x25 PP.

I think the difference in outcomes is that I invested another 70% into the PP on top of my starting balance on 1/1/16 (been averaging into the PP over the past 2 years now), buying the lagging asset(s) to try to keep roughly at 4x25. I also record the cost basis for gold as the price paid (for coins), but track value based on spot, so this definitely accounts for some of it as well.

I guess the trick is to "lump sum" into the allocation when it's going to be a positive year or two. If only someone had told me!
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Re: PP Performance for 2016

Post by barrett » Mon Jan 02, 2017 8:15 pm

drumminj wrote:Huh. Y'all are making me feel worse about my outcome this year :-\ Mine was 2.8% with a pretty much standard 4x25 PP.

I think the difference in outcomes is that I invested another 70% into the PP on top of my starting balance on 1/1/16 (been averaging into the PP over the past 2 years now), buying the lagging asset(s) to try to keep roughly at 4x25. I also record the cost basis for gold as the price paid (for coins), but track value based on spot, so this definitely accounts for some of it as well.

I guess the trick is to "lump sum" into the allocation when it's going to be a positive year or two. If only someone had told me!
Certainly if you had money going into the PP in June or July of 2016, you were buying high. peaktotrough.com shows a return of 5.15% for the year so that is a good benchmark. My IRAs, which is the one thing in life that I seem to obsess about, were up 6.56%, but I only hold about 10% cash in there. Looks like the other percentages are roughly 36% in stocks, 27% in gold and 26% in LTTs. My PP is spread out over non-retirement assets as well but I am definitely a bit light on long duration bonds. The IRAs clearly benefited in 2016 from having more stocks and lower bond exposure (my target for the IRAs is 30/30/30/10).

So, to Sophie's question about the 2017 to-do list, I guess I'll rebalance a bit. I also have my IRA "cash" in short-term treasuries and have been thinking that I will use Craig's tweak of moving that to 1-3 year treasuries. That should take care of my urge to tinker.

drumminj, FWIW, I think my wife's PP probably returned close to your numbers. It's mostly made up of IRAs and by the time we get her yearly contributions in, the portfolio seems to have amassed most of it's yearly gains (2014-2016 were all great in the early going). Fortunately she doesn't seem to give a rat's ass how it's doing as long as she is working and making money!
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drumminj
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Re: PP Performance for 2016

Post by drumminj » Mon Jan 02, 2017 8:27 pm

barrett wrote: drumminj, FWIW, I think my wife's PP probably returned close to your numbers. It's mostly made up of IRAs and by the time we get her yearly contributions in, the portfolio seems to have amassed most of it's yearly gains (2014-2016 were all great in the early going). Fortunately she doesn't seem to give a rat's ass how it's doing as long as she is working and making money!
Thanks for the comments. Yeah, I don't feel bad about it overall -- without the PP I likely wouldn't have much exposure to stocks, so I definitely did better this year than I would have "on my own". Plus, the money I'm moving into the PP is largely from a one-time stock windfall (company IPO), so I'm doing all right O0

I think the toughest part has been watching the big gains we had earlier this year evaporate...

No big 2017 TODOs on my plate. Staying the course, though perhaps also moving to slightly longer-term treasuries for my 'cash' (I already have cash in a mix of STT's, CDs, and a high-yield savings account).
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Re: PP Performance for 2016

Post by Kbg » Mon Jan 02, 2017 10:07 pm

If anyone is interested, the performance of more aggressive versions of the PP (read leveraged) can be found in the VP section in the 20% returns for 40 years thread. I also did a good, bad, ugly 2016 EOY write-up and have posted my personal results after 3 years of live.
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Re: PP Performance for 2016

Post by mathjak107 » Tue Jan 03, 2017 3:18 am

the golden butterfly ,which at least makes more sense to me than the pp clocked in for 2016 with a 10.67% gain despite the drop in gold and LT'S .

that is very good results ,because small cap value was insane .

there is no hiding from volatility anymore in any models . someone who decided to try the pp after brexit saw insane volatility as the portfolio whacked them with relatively heavy losses for the pp for 2016.
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Re: PP Performance for 2016

Post by I Shrugged » Tue Jan 03, 2017 8:14 am

drumminj wrote:Huh. Y'all are making me feel worse about my outcome this year :-\ Mine was 2.8% with a pretty much standard 4x25 PP.

I think the difference in outcomes is that I invested another 70% into the PP on top of my starting balance on 1/1/16 (been averaging into the PP over the past 2 years now), buying the lagging asset(s) to try to keep roughly at 4x25. I also record the cost basis for gold as the price paid (for coins), but track value based on spot, so this definitely accounts for some of it as well.

I guess the trick is to "lump sum" into the allocation when it's going to be a positive year or two. If only someone had told me!
Yeah I was up 10% or more in mid-year, then fell back to 5%, so your averaging worked against you. But I like averaging in.
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sophie
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Re: PP Performance for 2016

Post by sophie » Tue Jan 03, 2017 8:50 am

drumminj wrote:Huh. Y'all are making me feel worse about my outcome this year :-\ Mine was 2.8% with a pretty much standard 4x25 PP.

I think the difference in outcomes is that I invested another 70% into the PP on top of my starting balance on 1/1/16 (been averaging into the PP over the past 2 years now), buying the lagging asset(s) to try to keep roughly at 4x25. I also record the cost basis for gold as the price paid (for coins), but track value based on spot, so this definitely accounts for some of it as well.

I guess the trick is to "lump sum" into the allocation when it's going to be a positive year or two. If only someone had told me!
It might be that you bought in at the high points, but still that doesn't sound feasible if you played an agnostic lagging asset strategy. Check your math? Also, I use bid prices for the gold coins I hold from the company I bought from (Colorado Gold) to determine their value, not spot gold. That's a few percent difference right there.

I imagine PointedStick is pretty happy with the small cap value tear as well. That's quite a boost for the Golden Butterfly.
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Re: PP Performance for 2016

Post by dualstow » Tue Jan 03, 2017 10:12 am

I don't know how to calculate the real performance of my holdings because of little purchases, sales and reinvestments. Micropurchases?
I can tell that I did well in stocks, lost a ton of value in long bonds (unrealized profit), and a bit in gold. But, my spreadsheet shows an overall profit and I'm not too worried about the specifics.
And, what's your "investing todo list" for 2017?
It has been easy for me to adhere to rebalancing bands, but I struggle with the dilemma of whether or not to make the pp a larger share of my total. If I do that, I have to buy a lot more gold. Expanding might be an excuse in the back of my mind to load up on gold, a way of tinkering and telling myself that I'm not.

Then come the voices that say gold might stay down for my lifetime.

I do like the idea of putting more in the pp while it's unpopular and stocks are beloved.

Finally, I have flirted with the idea of using Citadel storage, a subsidiary of APMEX, my most recent dealer. I think I feel better just holding my own gold, though, and keeping all but a single coin in a bank safe deposit box.

I suppose I only have a To Don't list, and that has but one item: don't do anything drastic.
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