Are most people here sticking with Treasuries?

[Xan]

Sticking with Treasuries doesn't have to mean sticking with the LTT/MM barbell. Using ITT's (I use VGIT with ~5+ years of duration) instead of the barbell has historically provided essentially identical returns to the barbell with much less volatility.

I'm not sure I agree with you on the much less volatility part. All the data I've looked at shows that substituting ITT's for the barbell provides very similar return AND very similar overall volatility. ITT's are much less volatile than LTT's for sure, but the substitution's impact on overall portfolio volatility is practically nil based on what I've looked at.

There are big disadvantages to losing the cash portion of the portfolio: its flexibility as an emergency fund, the ability to use I-bonds for the cash, a nice on/off-ramp for invested funds.

[Kevin K.]

Sticking with Treasuries doesn't have to mean sticking with the LTT/MM barbell. Using ITT's (I use VGIT with ~5+ years of duration) instead of the barbell has historically provided essentially identical returns to the barbell with much less volatility.

I'm not sure I agree with you on the much less volatility part. All the data I've looked at shows that substituting ITT's for the barbell provides very similar return AND very similar overall volatility. ITT's are much less volatile than LTT's for sure, but the substitution's impact on overall portfolio volatility is practically nil based on what I've looked at.

Thanks dockinGA for the helpful reminder that I ought to have been more clear! When I said "less volatility" I was referring only to the bond and cash part of the portfolio, not the entire allocation. The overall smooth ride that the PP and GB have historically provided depends on volatile uncorrelated assets working in concert.

[I Shrugged]

I'd be lying if I said I feel good about the T Bonds. But I always see the clouds over every investment category so that's not a new feeling for me. I'm a poor enough market timer that I have decided to just run with the PP unless or until it fails spectacularly because of a new paradigm.

I think the abandonment of the PP by most holders over time is to be expected. You either get taken out by comparing it to what's hot and feeling you've missed out, or you get spooked by holding something that scares you.

[Vil]

You either get taken out by comparing it to what's hot and feeling you've missed out, or you get spooked by holding something that scares you.

I see other possibility too (assuming nested egg cannot still cover early retirement) - if one see PP as substitute of earning money from other sources. Personally, I take it as - get back to work mate and leave LTTs falling Joke aside, with my US PP I am happy so far with ITTs (approx 7-8 years).

By the way, have seen some synthetic EU ETFs that hold long positions in inflation protected government bonds and short in the normal government bonds with the same duration of both. For me they sound as trying to reflect the inflation break even rate - think of it as the gap between the yield curve of those - if it increase more than anticipated (as its the case for now) - you profit, otherwise you lose .. Anyone have experience with those ?

[murphy_p_t]

If you sell your LTT because you don't envision a future for them, do you also sell stocks and gold when they are declining and apparently don't have a future?

That behavior has pretty much nothing to do with the whole idea of the PP.

I'm not saying that you are wrong, or that the PP will actually "work" for its intended purpose. How could I know what will actually happen?

But buying and selling various assets based on where you think they are going isn't the point of the "permanent portfolio." So like most of the stuff that gets brought up in this forum, it really belongs in the VP forum.

Agreed. I indicated somewhere else on this forum that I'm no longer investing according to the Harry Brown permanent portfolio. Already sold the remainder of my total stock market alocation that I purchased in 2011.

[mukramesh]

...

Now people are either selling some or all of their LTT’s down 15%+ and locking in losses. Makes me think it’s a reasonable time to start buying.

I'm with you. I will likely make a big purchase of LTT's soon.

[jalanlong]

I am out of the PP and moved towards what I consider the safest thing I can at the moment: Cash + a portfolio of conservative, dividend paying stocks. Within those stocks is a healthy dose of energy and precious metal royalty companies that should help to deal with inflation a bit. Although it doesn't make me comfortable that when inflation hits and those companies begin to make money (after years in the doldrums) that all of the internet (and certain politicians) begin to scream about greedy oil companies and "record profits." I am afraid the next trick in the politician's bag is going to be price controls and I am not sure what I move to then!

[GT]

I am out of the PP and moved towards what I consider the safest thing I can at the moment: Cash + a portfolio of conservative, dividend paying stocks. Within those stocks is a healthy dose of energy and precious metal royalty companies that should help to deal with inflation a bit. Although it doesn't make me comfortable that when inflation hits and those companies begin to make money (after years in the doldrums) that all of the internet (and certain politicians) begin to scream about greedy oil companies and "record profits." I am afraid the next trick in the politician's bag is going to be price controls and I am not sure what I move to then!

Can you keep us posted on the new portfolio? Where did you come up with the strategy?

[murphy_p_t]

Everything is down; and TLT twice as much.

We're witnessing what effect the loss of reserve currency status and death of the petrodollar he has on the US treasury bond / PP.

[Jack Jones]

We're witnessing what effect the loss of reserve currency status and death of the petrodollar he has on the US treasury bond / PP.

This is why we hold gold, right?

I'm sticking w/ treasuries, and the PP in general:

Stocks: 25%
Gold: 20%
Bonds: 20%
Cash: 20%

[barrett]

We're witnessing what effect the loss of reserve currency status and death of the petrodollar he has on the US treasury bond / PP.

This is why we hold gold, right?

I'm sticking w/ treasuries, and the PP in general:

Stocks: 25%
Gold: 20%
Bonds: 20%
Cash: 20%

Those figures only add up to 85%! I am confused, though I have wished at times that I could hold LESS of everything!

[dualstow]

Those figures only add up to 85%! I am confused, though I have wished at times that I could hold LESS of everything!

Always remember, no less than 15% in chaps.

[buddtholomew]

The PP has been neutralized.
Talk of rising interest rates has turned the bond market upside down. Gold will face headwinds with yields rising as it does not pay a dividend. Stocks will continue to fall until rates stabilize and inflation subsides. Cash is the only true diversifier and I don’t but the argument about cash losing to inflation. It loses less to inflation than assets declining in value lose to inflation.

[dualstow]

The PP has been neutralized.
Talk of rising interest rates has turned the bond market upside down. Gold will face headwinds with yields rising as it does not pay a dividend. Stocks will continue to fall until rates stabilize and inflation subsides. Cash is the only true diversifier and I don’t but the argument about cash losing to inflation. It loses less to inflation than assets declining in value lose to inflation.

I have always felt the same about your last line. I can lose a bit to inflation knowing it won't be cut in half in a riskier asset. But, "the pp has been neutralized"-? It sounds like you view the pp as a hostile enemy.

[buddtholomew]

The PP has been neutralized.
Talk of rising interest rates has turned the bond market upside down. Gold will face headwinds with yields rising as it does not pay a dividend. Stocks will continue to fall until rates stabilize and inflation subsides. Cash is the only true diversifier and I don’t but the argument about cash losing to inflation. It loses less to inflation than assets declining in value lose to inflation.

I have always felt the same about your last line. I can lose a bit to inflation knowing it won't be cut in half in a riskier asset. But, "the pp has been neutralized"-? It sounds like you view the pp as a hostile enemy.

Not a hostile enemy, but rather in the sense that it can no longer perform as advertised. It’s like a leaf blowing in the wind, directionless.

[murphy_p_t]

We're witnessing what effect the loss of reserve currency status and death of the petrodollar he has on the US treasury bond / PP.

This is why we hold gold, right?

I agree.

From my perspective, it is equivalent to putting on body armor and allowing someone to shoot you repeatedly in the chest, just to prove that the body armor will stop the bullets.

To me, it is more prudent to stay concealed behind the concrete barrier.

Better yet, to capitalize on the (obvious) opportunity by holding producing gold / silver miners.

[murphy_p_t]

For someone who chooses to stick with the agnostic HBPP, I think they will lose less than 15% of their purchasing power, on a yearly basis.

[Kbg]

We're witnessing what effect the loss of reserve currency status and death of the petrodollar he has on the US treasury bond / PP.

Evidence?

If you say because Russia is making people pay for their oil/gas products in Rubles then you don't understand how foreign exchange works.

The question you should ask yourself is why did Russia build up a huge cache of US dollars for this exact situation? They could have "required" that their products be paid for in Rubles before the war. Why didn't they just do that so that they "had control"?

Final question...what does a government or country do with its own money with regard to foreign exchange and international trade?

The only thing you are witnessing is the Fed destroying the amount of liquidity in the system and raising the FFR due to out of control inflation.

[murphy_p_t]

Yes, an internet search engine will help you find that Russia is not the only country looking at moving away from transacting in US dollars for oil.

Feel free to explain the system since you have determined that I don't understand it.

Tell me more about all the US Dollars which Russia has accumulated (or shed) to make a substantial (?) portion of their foreign currency reserves.


(Following the de-dollarization of Russia’s reserves over the past years, dollar assets made up only around 16 percent of Russia’s stockpile. The U.S. was holding only 6.6 percent of Russia’s reserves as of last year, with other dollar reserves held elsewhere) https://www.statista.com/chart/26940/ru ... holder/the


Ps. Now that the whole world sees that Russian dollar assets have been frozen, what is the likelihood that other countries are looking to increase / decrease their US dollar holdings?

[murphy_p_t]

In light of the announcement by Russia to defend the ruble by the purchase of gold, and the dramatic appreciation of the ruble versus the US dollar since that time... Even in light of the Draconian measures to damage the Russian economy and the ruble... Can you draw any conclusions about the viability the US dollar maintaining world reserve status?

[Jack Jones]

Those figures only add up to 85%! I am confused, though I have wished at times that I could hold LESS of everything!

Always remember, no less than 15% in chaps.

I only listed the PP assets because this is the PP sub forum after all.

[Kbg]

Feel free to explain the system since you have determined that I don't understand it.

Apparently you do, so we're good.

[buddtholomew]

Just as I thought, PP is completely and utterly useless.
Where’s MT...I’m sure he thinks it’s doing just fine.
Blah, blah, blah...spring, coil, rebound, bullsh*t.

[murphy_p_t]

https://nitter.net/graddhybpc/status/15 ... 92906241#m

Ominous chart, in my opinion

[murphy_p_t]

https://www.zerohedge.com/markets/israe ... s-renminbi


This is what "greatest ally" in the Middle East is doing