Gyroscopic Investing

Great discussion in this thread. I don't actually have much to add, but I've been lurking very regularly.

A small update. After reading some more of the forum and thinking a lot about the responses I got in this thread I have some thoughts.

I continue to hold an opinion that there's no such thing as a national stock market as long as it's readily investable from abroad. Thus, for the stock portion I will use total world index ETFs, namely Vanguard FTSE All-World (VWCE) and SPDR MSCI ACWI IMI (IMID).

I'm also still positive that for a PP to truly work in all conditions, the bond part must be invested in US Treasuries (with all due respect to Australia and Canada). Thus, it will be invested in iShares USD Treasury Bond 20+ (DTLA), as it's the only Irish-domiciled fund that holds them.

I did reflect on the currency risk involved in keeping all my cash allocation as US Treasury bills. While in the long term donor country currencies are almost guaranteed to appreciate against the aid beneficiary countries' scrip, short term is important if it's also supposed to serve as an emergency fund, as Harry Browne intended. Many people in my country, including myself, got burned on panic-buying hard currencies that subsequently depreciated in value when it became apparent our government has chickened out of starting a regional war.

Thus I will likely limit my US Treasury bill allocation to 15%. The remaining 10% will consist of a regular emergency fund in local currency (some in literal cash, some in a HYSA), escape fund in USD banknotes (for a kind of emergency situation when local currency tends to underperform) and Swiss franc assets (hail Cuggino).

There is a new factor to the decision, though: my fiancee. I explained basics of investing to her and sent her some machine-translated articles. I've assumed it will require some work to sell her on any investment that cannot be held in our credit union or under the mattress. Instead, I had to talk her down from a stock-heavy allocation (80% equities, 20% gold, the woman wants her returns). After that she wanted to know what "small cap value" is (it's untranslatable to a language in which buying stocks and gambling in a casino share the same verb). I have a feeling I might end up with a Golden Butterfly.

For anyone who might have been interested in my thoughts here and on the other thread: the final allocation we have decided on and are investing in right now is: 50% developed country stocks (in which 25% large and mid-cap and 25% small cap), 25% cash, 25% gold. Minor details still to be ironed out: how much physical and paper gold (likely 10% physical), and how much cash is to be held in local currency vs USD and CHF (likely 10% commiebucks and rest hard currency). Ultimately it still resembles the PP somewhat and still fits @Hal's formula of 50% savings, 50% investments, just without the component that has burned nearly all of its fuel (in my and my fiancee's opinion, at least).

Sounds very similar to BelangP's approach, with your cash allocation being 25%.

All the best for your investing success!
Edit: Link for anyone curious => https://palisadesradio.ca/paul-belanger ... ate-hedge/

Thanks for the well-wishes, Hal. You always post the best links.

Hal wrote: ↑Thu Apr 25, 2024 9:57 pm Sounds very similar to BelangP's approach, with your cash allocation being 25%.

All the best for your investing success!
Edit: Link for anyone curious => https://palisadesradio.ca/paul-belanger ... ate-hedge/

The Ball Game demonstrates something we’ve struggled to help Mathjak understand.