Yay PP!

[mathjak107]

It is a bet on lower inflation and rates not necessarily low prosperity… all assets can move up in prosperity.

Rising rates and moderate inflation are its Achilles heel

You yourself has said that NOTHING is doing well at the moment. So maybe this is the Achilles heel of all investment portfolios?
Is it possible that the current conditions (this so-called Everything Bubble) is bad for all investments, and the PP could still end up being one of the least bad options?

Correct , nothing is doing well but some portfolios are doing worse , despite the fact they are supposed to be quite docile in their yin Yang action …..after today I would say the pp is likely down 2x what my much less rate sensitive core is down with the same equity allocations

- pp is likely down 2x what my much less rate sensitive core is down - Can you give approximate percentages. Is it 5 percent vs 10 percent or .5 percent vs 1 percent?
- Also you have probably already done this but can you discuss your core portfolio maybe in a different thread. Or just point me to the thread if its already started.

I will guess and say pp down about 2 to 2-1/4 % and my core model down 1.25 to 1.50%

[dualstow]

Until 2 pm Friday .

Don’t make me laugh. I’ve got a full stomach!

[mathjak107]

a

It is a bet on lower inflation and rates not necessarily low prosperity… all assets can move up in prosperity.

Rising rates and moderate inflation are its Achilles heel

You yourself has said that NOTHING is doing well at the moment. So maybe this is the Achilles heel of all investment portfolios?
Is it possible that the current conditions (this so-called Everything Bubble) is bad for all investments, and the PP could still end up being one of the least bad options?

Correct , nothing is doing well but some portfolios are doing worse , despite the fact they are supposed to be quite docile in their yin Yang action …..after today I would say the pp is likely down 2x what my much less rate sensitive core is down with the same equity allocations

- pp is likely down 2x what my much less rate sensitive core is down - Can you give approximate percentages. Is it 5 percent vs 10 percent or .5 percent vs 1 percent?
- Also you have probably already done this but can you discuss your core portfolio maybe in a different thread. Or just point me to the thread if its already started.

The core is

26.40% aggressive equity funds ,fidelity

39.2 short term treasuries

17.7% high yield which are more stock like then bond like

16.7% total bond

A smaller portfolio is my inflation hedge which is 25% of the larger portfolio , so 75% in the core , 25% in inflation hedge

Gold 5%

Gbtc bitcoin 5%

Dbc commodities 5%

Strategic real return fund 10%

[yankees60]

I would think most here do look daily ..it is simply because they have an interest in it enough to be here .


They are also using the pp because they are gun shy so I would think they look.

People in forums tend to be active

I never look. I'd not know anything was going on unless I read something here. I'm the ultimate buy-and-holder. Therefore you don't need to know what is going on today.

I've still not changed any of my initial investments I made 19 years ago this month with all subsequent investments going into "cash" since then.

[mathjak107]

I envy you .

Every time I try to do that I end up looking in a day or two ..I hate it but it has been this way for 33 years

[mathjak107]

We are actually seeing both …look at cash in real return , it’s minus 7% as far as what it buys vs what it bought

Every investment that is down is actually. down its nominal return plus another 7% in inflation


The investment world is about real returns

[Pet Hog]

Kitces looked into rebalancing .

Assuming a 50/50 with an average of 10% a year on equities and bonds averaging 5% , over 30 years the 50/50 would become 80/20 just letting assets drift

https://www.kitces.com/blog/how-rebalan ... nt-anyway/

We can see a similar thing in seajay's "non-rebalanced" PP from 1978 to today.

Rebalanced vs non-rebalanced and the two progression lines followed much the same lines, but where the non-rebalanced was seeing increased negative side portfolio volatility as early as the 4th year (-14% vs -5%)

Looking at the "Allocation Drift" tab on Portfolio Visualizer gives the following chart. For a non-rebalanced PP started in January 1978, now 44 years later stocks are at 73%, LTTs at 16%, cash at 6%, and gold at 5%. That's a stock-to-LTT ratio of 82:18.

Looking at the gold allocation, it seems there have been three great times to rebalance: around 1980 (get out), around 2000 (get in), and around 2012 (get out). Looking for a pattern, the last five years look similar to the five years up to around 1998 (with stock allocation up, LTTs sort of steady, and cash and gold both squeezed). So perhaps there'll soon be a next great time to get into gold. It certainly feels that way, intuitively, to me.

[mathjak107]

Meh …..all these charts tell us little …we really are in uncharted waters ….rates this low and equity valuations this high coupled with so many new ways to bet against the market or economic outcomes says just keep your fingers crossed going forward

[mathjak107]

It is a bet on lower inflation and rates not necessarily low prosperity… all assets can move up in prosperity.

Rising rates and moderate inflation are its Achilles heel

You yourself has said that NOTHING is doing well at the moment. So maybe this is the Achilles heel of all investment portfolios?
Is it possible that the current conditions (this so-called Everything Bubble) is bad for all investments, and the PP could still end up being one of the least bad options?

Correct , nothing is doing well but some portfolios are doing worse , despite the fact they are supposed to be quite docile in their yin Yang action …..after today I would say the pp is likely down 2x what my much less rate sensitive core is down with the same equity allocations

- pp is likely down 2x what my much less rate sensitive core is down - Can you give approximate percentages. Is it 5 percent vs 10 percent or .5 percent vs 1 percent?
- Also you have probably already done this but can you discuss your core portfolio maybe in a different thread. Or just point me to the thread if its already started.

I was right

Pp is down about 3% ytd , my core 1.50% …..so that is a 100% difference in returns …so there is no doubt that the assets in the pp are overly rate sensitive as well as sensitive to moderate inflation where gold does little reacting and stocks are losing ground as well as long and short term bonds hit with losses

Eventually a clearer picture as to where we are headed will come out of the fog , but like I said , how much damage will have to be recovered from ?

[dockinGA]

It is a bet on lower inflation and rates not necessarily low prosperity… all assets can move up in prosperity.

Rising rates and moderate inflation are its Achilles heel

You yourself has said that NOTHING is doing well at the moment. So maybe this is the Achilles heel of all investment portfolios?
Is it possible that the current conditions (this so-called Everything Bubble) is bad for all investments, and the PP could still end up being one of the least bad options?

Correct , nothing is doing well but some portfolios are doing worse , despite the fact they are supposed to be quite docile in their yin Yang action …..after today I would say the pp is likely down 2x what my much less rate sensitive core is down with the same equity allocations

- pp is likely down 2x what my much less rate sensitive core is down - Can you give approximate percentages. Is it 5 percent vs 10 percent or .5 percent vs 1 percent?
- Also you have probably already done this but can you discuss your core portfolio maybe in a different thread. Or just point me to the thread if its already started.

I was right

Pp is down about 3% ytd , my core 1.50% …..so that is a 100% difference in returns …so there is no doubt that the assets in the pp are overly rate sensitive as well as sensitive to moderate inflation where gold does little reacting and stocks are losing ground as well as long and short term bonds hit with losses

Eventually a clearer picture as to where we are headed will come out of the fog , but like I said , how much damage will have to be recovered from ?

I hope this was said tongue in cheek. The thought that you can proclaim to know exactly what's going on based off of 18 days worth of data is pretty rich. Especially since you said later on in the post that we're still in a fog, waiting on a clearer picture to form.

[mathjak107]

It is what it is and it certainly illustrates the fact that the pp is experiencing a lot more interest rate drag . Both last year , and so far this year, as last year the pp lagged again with the same equity allocation the only difference being the interest rate and inflation weight on the other assets between the models .

Could things change ? Sure ..but they still show that the pp is effected a lot more by rates and inflation fears

[Xan]

It is what it is and it certainly illustrates the fact that the pp is experiencing a lot more interest rate drag . Both last year , and so far this year, as last year the pp lagged again with the same equity allocation the only difference being the interest rate and inflation weight on the other assets between the models .

Could things change ? Sure ..but they still show that the pp is effected a lot more by rates and inflation fears

Mathjak, I don't believe in looking at that rear view mirror. What happened the last 18 days doesn't matter at all, what matters is what happens the NEXT 18 days.

[mathjak107]

You got that right ……exactly what I keep saying …….forget charts and what was ..we really are in uncharted territory.

Remember how markets tanked first Iraq war ? Second time markets went up on the news …..

Thinking we are going to get a play out the way we did last time is random at best..

Odds are whatever you did to prepare based on last time will play out just different enough …

Although we like to say thinking this time is different , rarely happens , the truth is history rarely repeats itself .

Historians tend to repeat themselves but history tends to play out a bit different each time…

We don’t know if this time gold will respond or long term bonds ,both or neither …..we are just different enough from that rear view mirror

[jswinner]

Until 2 pm Friday .

No idea , perhaps a long time ….no one knows.

Rising rates stink for all segments of the portfolio and can hit 3 out of 4 parts pretty hard ..
Only cash or short term bonds won’t get hit as hard.

It can be a white knuckle ride for some followers

Or, maybe not just cash
https://assets.bwbx.io/images/users/iqj ... /-1x-1.png

[Xan]

Although we like to say thinking this time is different , rarely happens , the truth is history rarely repeats itself .

Not long ago one of your oft-repeated tropes was how much money people lose assuming "this time is different" rather than sticking with "what has been and has a good chance of continuing". Have you changed your mind?

[Don]

I'm glad that I own some gold today. How about you?

[mathjak107]

Although we like to say thinking this time is different , rarely happens , the truth is history rarely repeats itself .

Not long ago one of your oft-repeated tropes was how much money people lose assuming "this time is different" rather than sticking with "what has been and has a good chance of continuing". Have you changed your mind?

Different issue .

Betting that over a typical accumulation stage which spans decades that stocks will be the leader is a pretty good assumption it will continue .

Betting that a particular fed action on rates will have markets act the same as it once did is really not a great bet to make. In fact you can almost bet market reactions will be different this time

[ppnewbie]

Although we like to say thinking this time is different , rarely happens , the truth is history rarely repeats itself .

Not long ago one of your oft-repeated tropes was how much money people lose assuming "this time is different" rather than sticking with "what has been and has a good chance of continuing". Have you changed your mind?

Different issue .

Betting that over a typical accumulation stage which spans decades that stocks will be the leader is a pretty good assumption it will continue .

Betting that a particular fed action on rates will have markets act the same as it once did is really not a great bet to make. In fact you can almost bet market reactions will be different this time

Is there any way you can put your portfolio in portfolio visualizer and compare it directly day by day over a long period to the GB and the PP? And possibly replicate it in portfoliocharts.com. 3.0 vs 1.5 for me is not a signal. It would be good to see max drawdowns, time period to recovery, etc, etc...

It's just helpful to see exactly what is going on (or at least what has happened in the past).

[mathjak107]

It’s multiple portfolios…..and the funds change over time …but I can give you the two portfolios returns since they are tracked right on the fidelity insight website .

I use a mix of the two which varies too ,I keep equities in the 25- 40% range ..times like now I am more towards 30% …so exact numbers are hard since how much of the growth model i season the core with can vary .

So the core is the 25% income model and i season to taste adding more equities with the growth model .


The gb would be more aggressive then I typically average out to

https://www.fmandi.com/about/performance/perf_i.php


https://www.fmandi.com/about/performance/perf_gr.php

[dockinGA]

It’s multiple portfolios…..and the funds change over time …but I can give you the two portfolios returns since they are tracked right on the fidelity insight website .

I use a mix of the two which varies too ,I keep equities in the 25- 40% range ..times like now I am more towards 30% …so exact numbers are hard since how much of the growth model i season the core with can vary .

So the core is the 25% income model and i season to taste adding more equities with the growth model .


https://www.fmandi.com/about/performance/perf_i.php


https://www.fmandi.com/about/performance/perf_gr.php

Do you track your personal performance on a yearly basis?

[mathjak107]

I don’t track performance since I retired and we are drawing out 6 figures a year ..only tracking I do personally is i compare balances left year to year …it’s the only thing that matters now

Any performance tracking I do is done by the newsletter in the models themselves and i use a mix of two of them .

Plus I also have my inflation hedge portfolio which I have in place .

So it really serves me no purpose trying to track what goes on personally ….we also have pension and ss going in to the same accounts too so it would be a crazy amount of work to track it personally and it serves me no purpose.

I care how the portfolios do as a whole so I can see what the income model does based on the newsletter tacking and I can see the growth model ..but how i mix them is not tracked by me

[ppnewbie]

I don’t track performance since I retired and we are drawing out 6 figures a year ..only tracking I do personally is i compare balances left year to year …it’s the only thing that matters now

Any performance tracking I do is done by the newsletter in the models themselves and i use a mix of two of them .

Plus I also have my inflation hedge portfolio which I have in place .

So it really serves me no purpose trying to track what goes on personally ….we also have pension and ss going in to the same accounts too so it would be a crazy amount of work to track it personally since it serves me no purpose

Just to understand a mix of these two funds makes up seventy five percent of your portfolio, correct? Can you reveal the specifics of those two funds because the site just says "Growth and Income" and "Income"?

[mathjak107]

Yes the two models are 75% of the total invested dollars .

Unfortunately when you use a subscription newsletter I can’t disclose the exact funds as everyone pays for that info .
If you want a sample of a very old copy of the models which were once used that I can post so you can kind of see what they do , I can post that

I should have posted the income model , and the growth model numbers ….there is a growth and income model they have but I don’t use it.. I didnt want the 60% or so in equities anymore and the growth and income model is in that area .

[mathjak107]

This is years old but an example , no one should use this as it is not representative of current models

[ppnewbie]

I was just about post that same image. Thanks.