Nowhere to hide?

[Mayday_I]

Hi everyone,

The current situation in Iran and the resulting oil shock have highlighted a frustrating reality: there are times when traditional "safe haven" assets simply fail to perform. Over the past two weeks, we’ve seen red across almost every asset class.

While the current drawdown isn't worrying for me, it does raise a question: Have we seen this kind of correlation in the past, or are we witnessing a new phenomenon?

I’m beginning to wonder if the safe havens of the past still hold the same weight today. I’d love to hear your thoughts on whether diversification into the four of the PP assets still provides the protection it used to.

Best,
Mayday

[boglerdude]

How did asset classes behave during Iraq war?

With 30y near 5% PP theory is sound. At 2% no room to fall.

[mathjak107]

today there are just to many ways for investors to easily and reliably bet against the market .

inverse funds are everywhere. safe haven assets are not the most reliable way to run to cover anymore

[Mayday_I]

The PP is designed to perform reasonably well across all economic regimes. It achieves this by including a dominant 'safe haven' for every market condition. Historically, one of the four asset classes was most likely performing reasonably well, in my opionion not least due to a scarcity of alternatives.

However, as the variety of hedging strategies against market downturns is signifikant nowdays, does this challenge the core logic of the PP? Is its underlying philosophy perhaps becoming obsolete in today's market?

[AdamA]

Over the past two weeks, we’ve seen red across almost every asset class.

I have been in the PP for 15 years.

It's always when people think it's going to break that it performs the best.

You can't look at how the assets behave over just 2 weeks.

You have to look over at least a year.

Over that past year:

GLD up 68%
SPY up 20%
SHV flat
TLT down 5%

Looks good to me!