Faith-Based Investor Radio: Looking for a More Consistent Investment Strategy?

[LifestyleFreedom]

The Permanent Portfolio investment strategy is discussed briefly (in a positive manner) starting at about 18 minutes into this commercial broadcast:

http://jayperoni.com/wp-content/uploads ... ow-100.mp3

I agree with the broadcast in that the Permanent Portfolio is one way to invest successfully; it's just not the only way to invest successfully.

[MediumTex]

I agree with the broadcast in that the Permanent Portfolio is one way to invest successfully; it's just not the only way to invest successfully.

That's absolutely true.

The PP is just one solid option for someone looking for a safe and stable investment method.  There are others.  The most similar to me would be something like a 65% bond index and 35% stock index (though this allocation may underperform the PP during periods of high inflation).

[LifestyleFreedom]

The PP is just one solid option for someone looking for a safe and stable investment method.  There are others.  The most similar to me would be something like a 65% bond index and 35% stock index (though this allocation may underperform the PP during periods of high inflation).

As someone getting closer to retirement (where I will have to depend entirely on investment income and no "human capital" income from a job), I look at the cashflow that an investment can generate.  This concept "lifestyle-based investing" was covered pretty well recently in one of my favorite financial programs (note that the Permanent Portfolio was not discussed in the program):

http://www.youtube.com/watch?v=nZhOSZZdAys

I prefer publicly-traded securities for generating my cashflow, but my barber is a real estate investor who does not trust paper assets.  I, on the other hand, know that I would not be a good landlord, so each of us uses an approach to investing that works for us.

The book Work Less, Live More describes how to live on investment income.  It discusses how to withdraw 4 percent of the portfolio's value the first year and then index the withdrawal to the rate of inflation in subsequent years.  If you assume the rate of inflation is 3 percent, investment fees are 1 percent, and the withdrawal rate is 4 percent, then you need a portfolio that grows 8 percent a year (i.e., 3% + 1% + 4% = 8%) to make it work and theoretically never run out of money.  The Permanent Portfolio historically fits this average 8 percent annual growth rate requirement.  Note that the first edition of the book does not discuss the Permanent Portfolio and I don't believe the second edition of the book (which I have not read) discusses the Permanent Portfolio either.

I like the concept of "strategy diversification" because I really don't know what works (the investment world is full of too many surprises that are sometimes referred to "rogue waves" or "black swan events").  So I like index investing, dividend growth investing, and the Permanent Portfolio.  I'm also looking at various trading techniques (such as trend following) to determine if any of them are right for me.

I've been invested in a small way in PRPFX for almost two years now and am happy with the results.  I intend to increase my investment in the Permanent Portfolio in future years and am looking forward to the new Permanent Portfolio book that is coming out later this year.

[MediumTex]

Those are good observations and I think you are in a situation that is similar to many people.

I personally find the PP to be unique in its resilience in the face of every kind of bad thing that can happen to your investments.

The same thing that makes me admire a building that can withstand 150 mph winds makes me admire the PP.