The 50-50 Solution

[Greg]

I also think the "bond" portion of way too many portfolios tends to be 1) too short in duration (even when they ARE long duration, they're callable so it's pointless), and 2) too risky (mortgages, munis, corporates, foreign, etc).

I think the fact that the 50% bond portion is longer in duration and 100% treasury makes this a pretty solid portfolio.

Besides, if you're trying to get someone into the PP, and you tell them the 4x25 assets, it can sound crazy, but if you tell them "50% stocks, 50% treasury bond ladder... oh, and make sure you have a 6-month cash-cushion and some gold coins in a safe" you could basically have a PP for this person without them even realizing it.  Maybe we should be presenting the PP in that context to our friends, not starting the whole thing off trying to explain why you want 50% of your portfolio in 30-year bonds yielding less than 3% and a shiny yellow metal.... oh and another 25% in bills .01%.

As a sidenote to this older post, I'm still quite new to the PP, but have trouble explaining my newfound investment decisions to others. I feel at times like it is a cult as a small minority of investors versus the conventional "wisdom" of all other investors out there. I gotta figure out how to spin the idea of buying 30 year bonds and gold and t-bills to others in a non-crazy way hah.

[hoost]

Ha, I usually start with the premise that there are four possible economic scenarios.  Once you embrace this, the rest is intuitive.

[christina]

I also think the "bond" portion of way too many portfolios tends to be 1) too short in duration (even when they ARE long duration, they're callable so it's pointless), and 2) too risky (mortgages, munis, corporates, foreign, etc).

I think the fact that the 50% bond portion is longer in duration and 100% treasury makes this a pretty solid portfolio.

Besides, if you're trying to get someone into the PP, and you tell them the 4x25 assets, it can sound crazy, but if you tell them "50% stocks, 50% treasury bond ladder... oh, and make sure you have a 6-month cash-cushion and some gold coins in a safe" you could basically have a PP for this person without them even realizing it.  Maybe we should be presenting the PP in that context to our friends, not starting the whole thing off trying to explain why you want 50% of your portfolio in 30-year bonds yielding less than 3% and a shiny yellow metal.... oh and another 25% in bills .01%.

As a sidenote to this older post, I'm still quite new to the PP, but have trouble explaining my newfound investment decisions to others. I feel at times like it is a cult as a small minority of investors versus the conventional "wisdom" of all other investors out there. I gotta figure out how to spin the idea of buying 30 year bonds and gold and t-bills to others in a non-crazy way hah.

To go for the PP, I think you need to have this combination of features in your personality:
1. humble, and not think you're smarter than everyone else
2. be interested enough in investing to take control of your investments yourself

It's a rare type of person who has both traits, because if you have #2, you almost never have #1.

[Greg]

To go for the PP, I think you need to have this combination of features in your personality:
1. humble, and not think you're smarter than everyone else
2. be interested enough in investing to take control of your investments yourself

It's a rare type of person who has both traits, because if you have #2, you almost never have #1.

That's a great way to put it Christina. Perhaps that's why there aren't more PPers out there. The "AND" gate is just too much for people (a little logic humor there, haha)