PP is around flat for past 24 months

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Gosso
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Re: PP is around flat for past 24 months

Post by Gosso »

TennPaGa wrote: Gosso:

What data did you use for each of the 4 components?  And where did you get the monthly data?
I use Yahoo! Finance for SPY, TLT, SHY and GLD (LINK).  For data before these ETFs existed I use FRED.  The "Download Data" link can be used to download a *.csv file.  Just make sure "Monthly" and "End of Month" are selected.

S&P 500:
- Index from FRED.
- Dividends (manually entered into excel and assumed constant yield per month, ie 4.5%/12).

Gold:
- Index

30 Year Bonds:
- Yield back to 1977.
- Pre-1977. Need to use 20 year yields, since 30 year only go back to 1977 (also the 20 year can fill in the gap between 2002 and 2005).  In excel you can then solve for the 30 year bond price using the 20 year bond yield (use the PRICE function).  I'm assuming the long-end of the yield curve was relatively flat between 1969-1977 and 2002-2005, which seems reasonable given how close the yields are when graphed together.

[img width=400]http://research.stlouisfed.org/fred2/gr ... 2014-02-05[/img]

Cash:
- 1 Year Treasury.  I went through the same process as with the 30 year treasury.

Intermediate bonds: 

- I simply use a 50/50 blend of the 1 year and 30 year treasuries.

Inflation:
- CPI Index.  I calculate the monthly change in the index and subtract that from the monthly return.

It's not perfect but it's fun to tinker around with once in a while.

Edit: Fixed link for 20 year treasuries.
Last edited by Gosso on Wed Feb 05, 2014 8:09 pm, edited 1 time in total.
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