Gyroscopic Investing

My intention a few posts back was not to talk up gold in particular, but rather to talk up asset diversification in general. Gold is an example of a diviersifier which is largely ignored by financial advisers - allegedly because they cannot make much money from advising you to invest in it.

Meb Faber has an interesting post https://mebfaber.com/2020/03/05/the-sta ... portfolio/:

Nearly every allocation (or single asset class) will likely decline by at least 30% on a real basis – and probably more – in your lifetime.

He also has some sobering figures about the max drawdown of conventional portfolios like 60/40.

Following up on the data for portfolio drawdowns, I just posted a new article looking at the recovery side of the equation. I figure you guys will find it interesting as well.

Welcome to the Big Bounce

Tyler wrote: ↑Mon Jun 08, 2020 1:40 pm Following up on the data for portfolio drawdowns, I just posted a new article looking at the recovery side of the equation. I figure you guys will find it interesting as well.

Welcome to the Big Bounce

I'm tempted to say you've outdone yourself with this post Tyler but I know better by now because I think that after just about every new post on your site. But this one is a keeper that I so wish all my stoic Bogleheads friends would read.

And how's this for interesting timing? Your post arrived in my in box just a few hours after this one from Chris Mamula over at "Can I Retire Yet?" about his process of looking into adding gold to his portfolio. Porfolio Charts is prominently mentioned in the article and you'll note that a couple of us fans have hijacked the comment section as well. It's fascinating to see a small portion of the "stocks for the long run" crowd slowly opening their minds to broader possibilities.

https://www.caniretireyet.com/going-for-gold/

Awesome work!

The Deepest Drawdown chart is sorted differently than the others; may want to consider same sorting for continuity.

I wonder what impact rebalancing would have on these results. During the recent decline, I rebalanced a 70/30 to 80/20 and increased stocks in the PP to 40%.

buddtholomew wrote: ↑Mon Jun 08, 2020 3:28 pm Awesome work!

The Deepest Drawdown chart is sorted differently than the others; may want to consider same sorting for continuity.

I wonder what impact rebalancing would have on these results. During the recent decline, I rebalanced a 70/30 to 80/20 and increased stocks in the PP to 40%.

Yeah, I found that sorting that last one by deepest drawdown told the story a little better. But since you asked, here it is sorted in the same order as the other charts in the article.



And yes, rebalancing could certainly affect the numbers. I stayed away from that in the monthly data, but all annual numbers have it built in.

Kevin K. wrote: ↑Mon Jun 08, 2020 3:20 pm And how's this for interesting timing? Your post arrived in my in box just a few hours after this one from Chris Mamula over at "Can I Retire Yet?" about his process of looking into adding gold to his portfolio. Porfolio Charts is prominently mentioned in the article and you'll note that a couple of us fans have hijacked the comment section as well. It's fascinating to see a small portion of the "stocks for the long run" crowd slowly opening their minds to broader possibilities.

https://www.caniretireyet.com/going-for-gold/

Awesome article. Thanks for sharing! I really enjoy stories like that where people walk through their thought process for how they changed their mind with new information. And good conversation in the comments, too.

Tyler wrote: ↑Mon Jun 08, 2020 4:41 pm

Kevin K. wrote: ↑Mon Jun 08, 2020 3:20 pm And how's this for interesting timing? Your post arrived in my in box just a few hours after this one from Chris Mamula over at "Can I Retire Yet?" about his process of looking into adding gold to his portfolio. Porfolio Charts is prominently mentioned in the article and you'll note that a couple of us fans have hijacked the comment section as well. It's fascinating to see a small portion of the "stocks for the long run" crowd slowly opening their minds to broader possibilities.

https://www.caniretireyet.com/going-for-gold/

Awesome article. Thanks for sharing! I really enjoy stories like that where people walk through their thought process for how they changed their mind with new information. And good conversation in the comments, too.

Tyler, great article. I’d add that your writing and formatting have become excellent. That doesn’t come easy. Good work!