Converting from PRPFX to HBPP

[buddtholomew]

What distinguishing factor drove you to convert from PRPFX to the HBPP (or vice versa)? I would like to understand the thought process used transition from one investment to the other.

Best,
Budd

[chrikenn]

I can't tell you what caused me to convert, because I never invested in PRPFX.  But what caused me to choose the typical 4x25 over PRPFX was cost.  See this thread: http://gyroscopicinvesting.com/forum/in ... opic=622.0.

It seems to me that over a lifetime of investing, the costs saved by using 4x25 versus PRPFX are substantial.  If PRPFX could lower its expense ratio to 0.5% or so, I would give it more thought.  But until then, 4x25 for me.  Oh, and full disclosure: I'm nowhere near 100% in 4x25.  I'm slowly DCA'ing from a more typical 70/30 equity/bond portfolio into a 4x25 portfolio.  Ultimately, when all is said and done, the 4x25 portfolio will make up about 50% of my total assets, and what remains of the 70/30 portfolio will make up the other 50%.

[buddtholomew]

The differences between PRPFX and the HB 4x25 PP are significant enough to warrant a second look. I am happy with the way PRPFX has performed, but would prefer to eliminate the active management variable and have a larger allocation to long-term treasuries. Rather than hold EDV or TLT to compliment PRPFX, why not move 100% to the HB 4x25PP? I am wondering whether others initially invested in PRPFX and then switched at a later date.

[SmallPotatoes]

Though initially reluctant I found that converting my shares of PRPFX into stocks, bonds, cash, and physical gold was an easy, comforting move.

It's welcome to see PRPFX charted over 2 years and know you've been along for the ride. More so, I feel comforted knowing that only a hallway stands between me and my gold, that I OWN 30 year treasuries  and have total control over how long and how many, that my cash can be accessed in minutes at the bank I work for, and that ol' John Bogle et al have annice slice of the S&P for me at a fraction of a per cent per year.

[MediumTex]

Budd,

I think your experience is pretty typical of the PRPFX-to-HBPP crowd.

One day you just get scared and decide you want something a little safer, cheaper and less volatile.

[Reub]

Personally, I like the added diversification of PRPFX.

[longeyes]

The advantage of PRPFX comes, to my mind, with systematic withdrawal upon retirement.  Withdrawals at capital gains rates are a significant benefit.

[guineapig]

The advantage of PRPFX comes, to my mind, with systematic withdrawal upon retirement.  Withdrawals at capital gains rates are a significant benefit.

i think a little twist to 25% strategy could be more tax efficient. for example using GTU instead of IAU, and put the TLT into tax deferred account or Roth. Steve also mentioned save by harvesting loss from time to time. However, i agree prpfx is more tax efficient over the simple 25% each strategy, and with little hassle.