Permanent portfolio poll

[jalanlong]

Interesting that 45% of people on a Permanent Portfolio forum don’t adhere to a traditional PP. May I ask the reasons some of you have decided to tinker or not follow it at all? Were you in it and decided to tinker or were you never in a traditional 4x?

25% is too much gold IMO, although a few here prob think it's not enough at this moment in time.

I use a risk parity allocation, but hold all 4 assets and have no VP.

Care to share that allocation?

[yankees60]

Interesting that 45% of people on a Permanent Portfolio forum don’t adhere to a traditional PP. May I ask the reasons some of you have decided to tinker or not follow it at all? Were you in it and decided to tinker or were you never in a traditional 4x?

25% is too much gold IMO, although a few here prob think it's not enough at this moment in time.

I use a risk parity allocation, but hold all 4 assets and have no VP.

Care to share that allocation?

35% Stocks, 50% Bonds (1/3 LTT, 2/3 ITT), 15% Gold. Then on top of that, I also keep about 10-15% of that total value in cash.

Therefore one would need to multiply each of those percentages by 85 to 90% to get their true %'s of the total value?

I.e., if 10% cash, then 31.5%, 45%, 13.5%?

[jalanlong]

Interesting that 45% of people on a Permanent Portfolio forum don’t adhere to a traditional PP. May I ask the reasons some of you have decided to tinker or not follow it at all? Were you in it and decided to tinker or were you never in a traditional 4x?

25% is too much gold IMO, although a few here prob think it's not enough at this moment in time.

I use a risk parity allocation, but hold all 4 assets and have no VP.

Care to share that allocation?

35% Stocks, 50% Bonds (1/3 LTT, 2/3 ITT), 15% Gold. Then on top of that, I also keep about 10-15% of that total value in cash.

Interesting. That backtests very well. What is your feeling as to why a portfolio with 50% in govt bonds with an avg maturity of around 14 years would be the optimal one going forward?

[DoomVoyager]

I don't believe in holding large quantities of cash.

Beyond my bank account with a few months' worth, my portfolio is thirds of stock/bonds/gold.

If we were going to ever see significant deflation, covid lockdown would've been the time for it, yet, we didn't. I just don't believe it's sensible to expect deflation at all, honestly.

Is the money supply going to contract? It theoretically could, but what about the last 20 years has led us to believe that is likely?

Will decreased demand for goods (due to mass poverty, lockdowns etc) cause it? Not for any sustained period of time, both as we have seen during covid lockdowns, and because of the fact that businesses produce products seeking ROI. If I need to sell my product for $10 but people will only buy it for $5 due to whatever combination of reasons, I will sell off my shipment for what I can get, but unless I can get a profitable price, I am not going to resupply the product. This is why during both 2008 and 2020, we didn't see massively decreased prices for everyday goods, we just saw bare shelves. Decreased demand, I acknowledge as a theoretical cause of deflation but in real practice it will never be seen for more than a week at a time, I am sure of it.

Consider also - even in the event of sustained deflation, wouldn't my bonds denominated in dollars just benefit from it in lieu of my cash?

These combined factors are why I am thirds stock/bonds/gold and entirely reject the cash part.