Please explain the accumulation phase.

[catacomb]

I started my PP "trial" and invested 25k all at once.  Gold then crashed 15% and I'm still in the red zone.

I have another investable sum of 75k  in my checking account, slowly eroded by inflation. I know its crazy but I simply can't bring myself to put it all in, the PP seems way too dangerous to dive into right now.

The book says you should go all in (which in a sense I did with the smaller portion, that  got burned by gold decline).  If you do that, what is the meaning of "accumulation phase" in the context of the PP?

[dragoncar]

Accumulation phase is the opposite of withdrawal or drawdown phase, when you begin spending your portfolio. 

"All in" means go all in with money you want to invest in the PP.  right now I'd say you have a $75k variable portfolio long cash.  Nothing inherently wrong with that as long as you understand the implications. In other words, When/if you decide to allocate that to the pp, I wouldn't DCA, I'd just buy in.

[annieB]

Pat yourself on the back for avoiding a larger loss.
Now you are in my boat,when do we invest the remaining funds?
You done good in my book...

[rhymenocerous]

Each of the PP assets are supposed to be volatile (aside from cash), and you do not want them to all go up together.  If they did, that means they can all fall together, which would mean you are not diversified.  If you are close to a rebalancing band, I'd take this as an opportunity to at least add to your gold position, if you feel it's too uncomfortable to add the entire $75k at once.

[notsheigetz]

I went "all-in" when I started my PP, and I've usually done this every time I've re-arranged my finances. I've always figured that you determine whether it's a sound strategy using the information you have available and then make your move. What you don't have available, unfortunately, is a crystal ball telling you if the timing is optimal. There is no way to know that.

Somebody above suggested you made the right decision and saved yourself some money but in the long run how does he know that? With the PP down right now it could be the best time to buy. Or not. If you wait until it goes up, is that going to be your signal to buy? Doesn't sound like the best strategy to me though I do understand the psychology of it.

[Tortoise]

catacomb, you are correct that if you are investing a lump sum in a portfolio and do not plan on adding any more contributions to it, the term "accumulation phase" doesn't really apply.

dragoncar's definition of accumulation phase being the opposite of the drawdown phase is certainly a reasonable one. However, on this forum some folks also seem to use the term accumulation phase to refer to the early stages of building up a portfolio, when one's contributions still outpace the compound returns in dollar terms.

For example, the total dollar amount I contribute to my retirement accounts each year is still a bit higher than the dollar amount returned by those accounts in the form of interest, dividends, and appreciation. So I still consider myself to be in the accumulation phase, albeit close to entering what I might refer to as the "compounding phase."

[dragoncar]

So I still consider myself to be in the accumulation phase, albeit close to entering what I might refer to as the "compounding phase."

Also known as the "runaway wealth" phase or "fuck yeah!!!"

[smurff]

I like Tortoise' s definition.  When I use the term, I'm usually referring to contributions from salary, gifts, and windfalls of all kinds that are made before the end purpose of the portfolio--in my case, for retirement, but someone else may have other objectives (college for kids, starting a foundation, leaving an inheritance for survivors, etc.).  But Tortoises definition makes it clear that the portfolio eventually throws off substantial income as it grows that will eventually exceed your usual contributions.

[rocketdog]

"All in" means go all in with money you want to invest in the PP. 

+1

Another way to state it is that when you commit to the PP, you should make all 4 asset purchases at once.  This is because they all work together to counter-balance one another.  It doesn't mean you should put all of your money in the PP. 

So if you decide to add more money to your PP, split it 4 ways and invest each portion into each of the PP assets simultaneously.  As for me, I also maintain a VP that's as big as my PP, and I also have a Boglehead-style portfolio in my 401K (due to the limitations of the plan).  I find it interesting watching them all duke it out with one another.