Desert Portfolio Question

General Discussion on the Permanent Portfolio Strategy

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Jeffreyalan
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Re: Desert Portfolio Question

Post by Jeffreyalan » Mon Jan 07, 2019 6:39 pm

Kbg wrote:
Mon Jan 07, 2019 11:01 am
Jeffreyalan wrote:
Mon Jan 07, 2019 8:53 am
Kbg wrote:
Sat Jan 05, 2019 5:40 pm


I think funds like BIL or SHY are brilliant replacements for cash.
How do you feel about the safety of ETFS that hold Treasuries? I am contemplating keeping a stash of cash there and sucking up the .15 expense ratio instead of having to managing a 1-2 year treasury ladder.
VGSH is .07.

If you go with one of the big ETF companies I wouldn’t have any concerns safety wise and as mentioned it becomes cost vs hassle factor.

I was looking at shorter duration ETFs like BIL or GBIL. I understand the mechanisms behind ETFS but still have some nervousness (probably unfounded) about putting a huge chunk of my savings into them.
Kbg
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Re: Desert Portfolio Question

Post by Kbg » Mon Jan 07, 2019 9:12 pm

Jeffreyalan wrote:
Mon Jan 07, 2019 6:39 pm
Kbg wrote:
Mon Jan 07, 2019 11:01 am
Jeffreyalan wrote:
Mon Jan 07, 2019 8:53 am


How do you feel about the safety of ETFS that hold Treasuries? I am contemplating keeping a stash of cash there and sucking up the .15 expense ratio instead of having to managing a 1-2 year treasury ladder.
VGSH is .07.

If you go with one of the big ETF companies I wouldn’t have any concerns safety wise and as mentioned it becomes cost vs hassle factor.

I was looking at shorter duration ETFs like BIL or GBIL. I understand the mechanisms behind ETFS but still have some nervousness (probably unfounded) about putting a huge chunk of my savings into them.
While they are not very fun or interesting to read, I recommend reading the full prospectuses of the ETF s you are considering. I would be cautious about going too short in duration with a fund. At least with the data I have and on Mornignstar, BIL lost a small percent for six years in a row as fees were higher than interest received and SHV basically returned nothing.

If you are nervous about treasury ETFs then go with CDs at a bank where you have FDIC insurance backing.
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