Worst investing year ever...

[Smith1776]

For what it's worth, Harry Browne in Best Laid Plans said that he hoped the reader would put no less than 20% and no more than 35% in each of the given asset classes.

Maybe that changed in the intervening time between that book and his radio show.

[drumminj]

For what it's worth, Harry Browne in Best Laid Plans said that he hoped the reader would put no less than 20% and no more than 35% in each of the given asset classes.

Maybe that changed in the intervening time between that book and his radio show.

If I could just figure out how to put 35% in each of the asset classes, I'd be set!

[buddtholomew]

For what it's worth, Harry Browne in Best Laid Plans said that he hoped the reader would put no less than 20% and no more than 35% in each of the given asset classes.

Maybe that changed in the intervening time between that book and his radio show.

If I could just figure out how to put 35% in each of the asset classes, I'd be set!

In Mr. Smith’s defense, I believe he meant don’t let any asset drift lower than 20% or higher than 35% - Ive heard something similar but with 10% re-balance bands the lower end of the range is 15%, higher end 35%

[drumminj]

In Mr. Smith’s defense, I believe he meant don’t let any asset drift lower than 20% or higher than 35% - Ive heard something similar but with 10% re-balance bands the lower end of the range is 15%, higher end 35%

Yes, I was not meaning to give Smith a hard time, was just making a bad joke

[buddtholomew]

In Mr. Smith’s defense, I believe he meant don’t let any asset drift lower than 20% or higher than 35% - Ive heard something similar but with 10% re-balance bands the lower end of the range is 15%, higher end 35%

Yes, I was not meaning to give Smith a hard time, was just making a bad joke

It was funny though haha

[flyingpylon]

How much flexibility, though, fp?

You don’t have to have the 25%, but you need to have the 4.
Remember all those threads like “pp with no cash”?
I don’t know what that is, but it’s clear from the radio archives that it’s not a pp.

A little more solid than state of mind.

Well, as long as one self-identifies as a Permanent Portfolio investor it's probably okay.

I agree that having the 4 assets is key, as is the hands-off approach. I just don't get that hung up on the individual percentages if they remain within the rebalancing bands. If you're someone that checks your portfolio infrequently and only rebalances when a band is hit then the percentages can be pretty far off from 4x25 at any given time.

I'm probably just grouping a lot of "lazy portfolios" together in contrast to some of the other approaches out there. It's a big tent that can accommodate some variation. It works for me but I realize others like to stick with strict definitions.

[buddtholomew]

70/10/10/10 holds all 4 asset classes but many would not consider this a permanent portfolio.

35/15/15/35 or 15/35/35/15 for that matter I would consider a permanent portfolio-like AA. For me, it’s an allocation between 15 and 35 to all 4 assets that distinguishes the PP from other portfolios.

[jacksonM]

Got up the nerve to do my yearly portfolio review. This is the second year since my switch to the Golden Butterfly so I was worried about what would be the effect of the increased stock allocation given current events in the stock market.

Was pleased to learn the overall portfolio was only down about 3.4%. Given that I was up about 11.5% last year I'm pretty happy with the two year result.

Reminds me of the year that gold crashed a few years ago and I was pleasantly surprised to see I was only down about 2% overall.

This is basically why I use the PP strategy. So far it has succeeded very well in protecting me in volatile situations.

[Hal French]

Well whaddya know? The 4x25 HBPP works.

Without touching a thing(*) my personal portfolio was down only 1.97% for 2018, and it actually rebalanced itself. I only check my portfolio twice a year-- when I do my yearly rebalance and my year end check-in.

Stocks: IWV(*)
Bonds: TLT(*)
Cash: Capital One 360, SCHO(*), SHY(*), ETrade cash reserves(*)
Precious Metals: Physical gold, tiny amount of silver

(*) The lone X-factor was when Capital One Sharebuilder was taken over by ETrade earlier this year, any fractional shares of stock were converted to cash at the time, so that got lumped in with my year-end cash numbers-- has these fractional shares remained, the numbers would have been different.

Also, I did not add to my portfolio/rebalance in 2018, though I plan to do my 2018 contribution within the next 2 months.

I was a little heavy on precious metals and TLT going in to the year; the tumult of the market took care of that. As of this evening, my 4 asset classes are a statistical dead heat-- no more than 26.1%; no less than 24.2% in any one category... and stocks are exactly at 25%. Crazy.

When I started with the PP way back when, I felt more comfortable buying PRPFX. I still have a sizable chunk over there-- and even with automatic dividend reinvesting factored in, I lost over 6% on that fund for the year. 4x25 is the way to go.

[drumminj]

Well whaddya know? The 4x25 HBPP works.

I didn't end up quite as balanced as you (I did contribute some to lagging assets this year), but look to have ended up down ~1.91% on the year, heaviest in cash at 28.33%. Note that I haven't annualized/pro-rated my contributions, just assume they were all purchased on 1/1 at whatever I actually paid for them, so the math is a bit fuzzy there..

Net worth ended up positive on the year given additions to cash savings outside of the PP (PP is about 75% of my overall portfolio at this point). Not gonna complain one bit.

[yankees60]

I was surprised at how good the HBO movie from "Too Big To Fail" was. Strong performances by William Hurt as Treasury Secretary Hank Paulson and Paul Giamatti as Fed Chair Ben Bernanke. My favorite scene was Paulson (R) literally getting down on his knees and begging Nancy Pelosi (D) to support the TARP bill in the US House.

Unfortunately, stock market crashes, bank panics, and depressions have been more common in American history than most people think. After the Civil War, the triumphant North went on a speculative and highly-leveraged railroad building binge that ended with a stock market crash in 1873. The depression that followed went on for five years and wiped out half of the railroad companies in the US.

Thanks for this review. Will start watching it tonight until my eyes can no longer stay open.

Vinny

[dualstow]

If only we could have the economic equivalent of controlled “cool burns” in the forest, maybe we wouldn’t have to experience full on market crashes.
Until then, all we have is rebalancing.

[jhogue]

From a historical standpoint, it has proved impossible to repeal the business cycle. Think of it this way: the guys (in this case, central bankers), who are trying to do the controlled burn are just as likely to start a fire so big it gets out of their control and they themselves get roasted alive. The forest will re-grow eventually, but it may take more time than you can afford to wait.

[dualstow]

^ Yes! ^

[Smith1776]

I personally think that the economic equivalent to small and controlled burns is the natural business cycle.

The way I see it, it is only when government gets involved that we get these massive booms and busts.

I mean, don't get me wrong, I do think there is validity to the idea of applying a modicum of "pump priming" to get the economy on track when a recession hits. But we've pushed the idea waaaay too far. 24/7/365 economic stimulus is the name of the game now.

[yankees60]

I personally think that the economic equivalent to small and controlled burns is the natural business cycle.

The way I see it, it is only when government gets involved that we get these massive booms and busts.

I mean, don't get me wrong, I do think there is validity to the idea of applying a modicum of "pump priming" to get the economy on track when a recession hits. But we've pushed the idea waaaay too far. 24/7/365 economic stimulus is the name of the game now.

You do read Rickards's books, correct? What you just wrote seems to go along the recurring themes in his books (on my third one so far).

Vinny

[Smith1776]

I personally think that the economic equivalent to small and controlled burns is the natural business cycle.

The way I see it, it is only when government gets involved that we get these massive booms and busts.

I mean, don't get me wrong, I do think there is validity to the idea of applying a modicum of "pump priming" to get the economy on track when a recession hits. But we've pushed the idea waaaay too far. 24/7/365 economic stimulus is the name of the game now.

You do read Rickards's books, correct? What you just wrote seems to go along the recurring themes in his books (on my third one so far).

Vinny

Yes! I do enjoy his work. I don't agree with everything I've heard him say, but his general foundation I think is actually quite sound.

Jim Rickards is like the crazy uncle who warned you about the government when you were growing up. And then the Internet came along and you read Edward Snowden's revelations about massive surveillance. The "crazy" uncle wasn't so crazy after all.

Rickards is like the economic equivalent of that.

Most of his economic writings can be boiled down to this: buy some gold. Don't bet the farm on it or anything. That would be crazy. But a solid 10% is decent place to start.

Funny enough, some of his recommendations regarding alternative investments sounds an awful lot like the alternative investments that Larry Swedroe recommends.

[yankees60]

I personally think that the economic equivalent to small and controlled burns is the natural business cycle.

The way I see it, it is only when government gets involved that we get these massive booms and busts.

I mean, don't get me wrong, I do think there is validity to the idea of applying a modicum of "pump priming" to get the economy on track when a recession hits. But we've pushed the idea waaaay too far. 24/7/365 economic stimulus is the name of the game now.

You do read Rickards's books, correct? What you just wrote seems to go along the recurring themes in his books (on my third one so far).

Vinny

Yes! I do enjoy his work. I don't agree with everything I've heard him say, but his general foundation I think is actually quite sound.

Jim Rickards is like the crazy uncle who warned you about the government when you were growing up. And then the Internet came along and you read Edward Snowden's revelations about massive surveillance. The "crazy" uncle wasn't so crazy after all.

Rickards is like the economic equivalent of that.

Most of his economic writings can be boiled down to this: buy some gold. Don't bet the farm on it or anything. That would be crazy. But a solid 10% is decent place to start.

Funny enough, some of his recommendations regarding alternative investments sounds an awful lot like the alternative investments that Larry Swedroe recommends.

He is currently one of my favorite authors of any type book. His writing style is excellent. He packs so much substance into each of his books. I cannot fight or question his persuasive logic based upon all that substance he provides the reader.

Vinny