Gary wrote:
Pointedstick wrote:
Quite true. If you don't like the PP, what other options are there?
Ya know, that's the response that always turns me against the PP even when I otherwise have a good opinion of it.
Well, you could look at its low volatility, rock solid returns and seeming immunity to any kind of stupidity that politicians and central bankers want to throw at it.
The "what better options are there?" question is normally only posed when for whatever reason a person just doesn't seem willing to recognize that the PP works and has worked for decades.
I think that all we are saying is that if the standard you are going to apply to the PP is complete perfection 24 hours a day, how do other allocations stand up under that kind of scrutiny?
Saying "what else is there?" is a non-answer. Obviously there are plenty of other options out there.
Show me one. Show me one option that has done what the PP has done.
The only advantage the PP has that I can see is that it has a history that dates back to the seventies.
Really? You don't think that the PP's underlying theories are WAY more robust and comprehensive than the framework used to develop most investment strategies?
Most other assets, strategies, funds, etc. that work well now date back to the nineties or maybe the eighties.
That's not true. Investors have been using different strategies to try to beat the markets for as long as markets have existed.
The PP looks better by default over the long term since none of the other alternatives have as long a history. That doesn't mean they are inferior strategies, however.
That's not a good criticism of the PP. If you want to get a good sense of how the PP compares to another popular conservative strategy, compare the annual returns provided by Vanguard's Wellesley fund (which goes back to the early 1970s) and overlay inflation in your analysis and you will see exactly how the PP compares in inflation-adjusted returns to a more popular strategy that has been around a long time. You may find this exercise very eye-opening.
The other response that turns me against the PP -- hey, I might as well get it ALL out while I'm at it lol -- is the response about what happens when all correlations go to one and there are bad weeks and months in the PP. The response is to not look at your portfolio. Come on! That is not a response!
If you are committed to an investment strategy for the long-term, what's the point of looking at it on any particular day if you have satisfied yourself that the strategy is sound?
So many people have spent their whole investment careers bouncing from strategy to strategy that the whole concept of simply sticking with something through the ups and downs seems foreign to them. When you seriously consider the way we are wired as humans, however, and the ways that the market will use this to take investors' money away from them, you see that not looking at your portfolio is more subtle and wise advice than it may at first appear.
This board is full of smart people who spend hours analyzing MMT, plotting sophisticated graphs and doing number-crunching galore and they are not interested in viewing their portfolios?!! It's an odd picture, but I see people with good brains putting their head in the sand.
Perhaps. Or perhaps you just haven't made the investment to actually learn about the overall worldview that we are working from when a particular topic comes up.
When there are better answers to those questions, I might bite, but for now, there are too much unanswered questions regarding the PP, whereas there are other ways to get real returns that suit my comfort level. Mileage varies...
All of your questions have been answered here countless times from countless angles.
What is your basic criticism of the PP?
Has it not provide satisfactory returns for your taste?
Has it not provided satisfactory protection from large losses?
Has it not provided steady inflation-adjusted returns?
Has it not achieved its objectives with low enough volatility?
You can say that the overall style of the PP doesn't suit your tastes, but you really should share with us what works better than the PP, because I think that most of us would be ready to sign up tomorrow.
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