The PP Works Even if You Don't Watch It!

[MediumTex]

I have been busy with other things and haven't looked at the markets in a few days.

I was concerned that without my supervision the PP might stop working.

Happily, the PP seems to have continued working, even in the face of wars, revolutions, and oil price spikes.

To me, not having to babysit the PP is one of its most appealing characteristics.

[craigr]

I think I'm only checking actual returns quarterly now at most. I don't watch it at all day to day or even week to week. I only log in to my account to quickly check that no unauthorized activity has gone on. Other than that, I don't look too closely at it.

I have been running the portfolio now for 4-5 years. I use to be very worried about my investments prior to the Permanent Portfolio, now I sleep like a baby. I'd call that a success.

[fundtalk]

I agree with not watching day to day or even week to week (part of the beauty of having PP), but it is also important to monitor rebalancing bands.  It seems like once a quarter would be adequate for that.  Does that seem to be a reasonable time frame?

[moda0306]

I just dove into the PP recently, and am still trying to consider the tax aspects with some money I'll be getting from the sale of a rental, so I'm still looking every day, but with much less worry than I used to.

[Lone Wolf]

Heh.  I experienced the same shock when I learned that the Permanent Portfolio got along just fine whether I stared at charts all day long or not.

I now check no more than once per month, max.  I was surprised by how easy it was to "drop the leash" and just let it do its thing.

[craigr]

I agree with not watching day to day or even week to week (part of the beauty of having PP), but it is also important to monitor rebalancing bands.  It seems like once a quarter would be adequate for that.  Does that seem to be a reasonable time frame?

Once a quarter is fine. Harry Browne actually recommended more like once a year unless you hear about something really big happening in the news. Jack Bogle of Vanguard recommends once a year as well.

There are psychological reasons why checking too frequently is bad for investor performance. Humans react very strongly to something called loss aversion. Watching many small losses each day will be much harder to do emotionally than looking at losses less frequently like a few times, or even once, a year. When you see the portfolio assets going up and down it can drive investors to market timing, etc. Whereas someone not paying attention tends to leave things alone which is usually the best course of action.

[6 Iron]

I find that once a month is a nice compromise; visiting this forum is a nice alternative to checking my returns, and is what I do when/if the urge hits.

[melveyr]

I still check everyday! I have only had the PP for a couple months, but part of me feels like I will always be a market junkie. Once I have enough money I'm sure I will have a Variable portfolio as well. For now it's all PP, but I am still fascinated with the daily interplay between the assets.

Also, I can't help but compare my returns to the stock market... It's really not healthy because the PP is a totally different animal with different goals/risks.

[Coffee]

I have been busy with other things and haven't looked at the markets in a few days.

I was concerned that without my supervision the PP might stop working.

Happily, the PP seems to have continued working, even in the face of wars, revolutions, and oil price spikes.

To me, not having to babysit the PP is one of its most appealing characteristics.

Sarcasm noted.  But I still think you're overselling it, a bit. 

Pretty much any passive investment strategy (investing, in contrast to trading) with a reasonable asset allocation, is not going to require you to check your portfolio everyday.

[MediumTex]

Pretty much any passive investment strategy (investing, in contrast to trading) with a reasonable asset allocation, is not going to require you to check your portfolio everyday.

I think people come to this realization in different ways and at different times.

For the PP invetor, it is such a wacky looking allocation that I think it can take a while to really get comfortable with it.

[Lone Wolf]

Sarcasm noted.  But I still think you're overselling it, a bit. 

Pretty much any passive investment strategy (investing, in contrast to trading) with a reasonable asset allocation, is not going to require you to check your portfolio everyday.

Heh.  That's true, but there are different levels of comfort for different individuals.  Depending on your definition of a reasonable asset allocation, I'd agree completely.

However, in the world as it stands today, I just can't view any AA that doesn't include hard assets as something I'd sleep comfortably with.  There are many "reasonable" portfolios that don't hold hard assets but I think that I'd personally be very nervous holding them.

Likewise, portfolios that hold a lot of hard assets without a broader strategy for properly managing them are perhaps even worse.  Some kind of "run for the hills!" portfolio of 80% gold, 15% silver, and 5% leather chaps as seen in the Mad Max film series is an incredibly dangerous portfolio.

[MediumTex]

Some kind of "run for the hills!" portfolio of 80% gold, 15% silver, and 5% leather chaps as seen in the Mad Max film series is an incredibly dangerous portfolio.

The thought of leather chaps as part of an investment strategy is really priceless. 

As I ponder that idea for a second, the PP suddenly seems like an incredibly easy thing to explain to people.  I'm imagining how much more difficult it would be to describe the PP if I had to overcome peoples' preconceived notions about leather chaps.

"I understand how you feel about leather chaps, but I'm only talking about using them for purely utilitarian purposes, and only as part of a diversified portfolio."

[dualstow]

Chaps are the vestments of investments.

[melveyr]

I'm bullish on chaps for the long run, so I just hold them in my VP. 

[Lone Wolf]

You are not kidding.  I can give the gold speech but chaps take a talent beyond what I've got.

"Leather chaps are nobody else's paper promise to you.  This is why you must never, ever just hold your leather chaps in one of the ETF products (such as ticker symbol CHPZ.)

When you're out on that dusty, post-apocalyptic highway to Thunderdome and boomerang-throwing madmen are trying to kill you for your gasoline, leather chaps ETFs (or, God help you, TIPS) will just not be good enough."

[MediumTex]

"...over hundreds of thousands of years, leather outergarments have proven to be a reliable store of value."

"It has often been observed that in 1900 a pair of well-made leather chaps could be exchanged for a fine men's suit, and today a pair of well-made leather chaps can still be exchanged for a fine men's suit."

"Some people say that leather chaps are only valuable in a doomsday scenario.  This is typical "anti-chapsbug" thinking.  I can take you to any number of clubs this weekend (many of which you may not even be aware existed) and show you that there is a strong leather chaps market out there, whether or not the world ends tomorrow.  I mean, where do you think those guys in the Mad Max movies were going when doomsday struck?  They were on their way to the clubs!"

[Coffee]

I just finished reading Kunstler's "World Made By Hand" -- a post peak oil world fantasy.  I was thinking: If I lived in that world, what would be the best trade to have-- aside from town doctor-- where I wouldn't end up stuck working the fields?

I was thinking horse saddle and tack maker? 

Now I'm just thinking: Chaps.

[fnord123]

I love the Chapsbug stuff!

Do people store them in safe deposit boxes or safes?

[MediumTex]

I love the Chapsbug stuff!

Do people store them in safe deposit boxes or safes?

There is a large ranch complex in western Australia that provides segregated chaps storage.

If you go this route, though, make sure you go with a reputable company.  I have heard rumors about some of these storage companies where the wranglers and other hired hands will sometimes sneak a few pairs of the segregated chaps out for a night on the town.

[6 Iron]

There is a large ranch complex in western Australia that provides segregated chaps storage.

If you go this route, though, make sure you go with a reputable company.  I have heard rumors about some of these storage companies where the wranglers and other hired hands will sometimes sneak a few pairs of the segregated chaps out for a night on the town.

This is actually why some prefer the Austalian storage facility rather than the one in San Francisco.

[moda0306]

BOOM!

Good one 6 Iron.