Gyroscopic Investing

Gold is 2% below my recent sale price.
The PP is positive YTD.
I have cash to invest in Gold and LTT's.
Oh the dilemma...

Cortopassi wrote: Just doing the change slowly.  I added about 3% more stocks right before the low in stocks whenever that was, late Jan or so, and have dropped cash to do that.  But not near the levels I want to be at.  I figure if I have it close by the end of the year I'll be good.

My targets, based off some 401k limitations are:

Total Market 15.0%
LT Bonds         25.0%
LgCap Blend 10.0%
EmMkt/IntlSmal7.5%
SmCapVal 7.5%
Cash 10.0%
Gold         25.0%

Basically less cash and more US/EM diversification.

buddtholomew wrote: Gold is 2% below my recent sale price.
...
I have cash to invest in Gold...
Oh the dilemma...

Are you sure you want to keep getting in and out of gold like that?

Pet Hog wrote: ↑Sat Mar 19, 2016 4:00 pm Uncork the champagne!  According to peaktotrough.com, the PP started on January 1 1972 with 35/15 bands and reinvested dividends reached its all-time high (nominally) yesterday, surmounting the previous peak established on February 2 last year.  Hopefully, your portfolio is at its all-time high, too.  I know mine is, and it's a relief after the big plunge (almost 8%) last year.

(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Congratulations, PP!

Almost three years later and I could write a similar post again today. I follow two PPs (mine and a theoretical one started on a different day) and they both reached their all-time highs on Friday. The previous highs were toward the end of January 2018, so again it took just over a year to get back here.

Although the drawdowns I've experienced as a PP investor have been pretty small, I've noticed a psychological effect where a 2% decline now bothers me as much as a 20% decline did before I invested this way. Silly, I know. But I am very happy with my investments. I never think about changing the asset mix. For me that's the number one advantage of PP investing: no desire to tinker!

I'm optimistic about the portfolio's return for 2019. Hope to have a solid year -- a 10% gain would be welcome -- so that my real CAGR gets above 4% again and stays there. It's been stuck in the 1-3% range for too long (I started in May 2013).

Pet Hog wrote: ↑Sun Feb 17, 2019 10:27 pm

Pet Hog wrote: ↑Sat Mar 19, 2016 4:00 pm Uncork the champagne!  According to peaktotrough.com, the PP started on January 1 1972 with 35/15 bands and reinvested dividends reached its all-time high (nominally) yesterday, surmounting the previous peak established on February 2 last year.  Hopefully, your portfolio is at its all-time high, too.  I know mine is, and it's a relief after the big plunge (almost 8%) last year.

(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Congratulations, PP!

Almost three years later and I could write a similar post again today. I follow two PPs (mine and a theoretical one started on a different day) and they both reached their all-time highs on Friday. The previous highs were toward the end of January 2018, so again it took just over a year to get back here.

Although the drawdowns I've experienced as a PP investor have been pretty small, I've noticed a psychological effect where a 2% decline now bothers me as much as a 20% decline did before I invested this way. Silly, I know. But I am very happy with my investments. I never think about changing the asset mix. For me that's the number one advantage of PP investing: no desire to tinker!

I'm optimistic about the portfolio's return for 2019. Hope to have a solid year -- a 10% gain would be welcome -- so that my real CAGR gets above 4% again and stays there. It's been stuck in the 1-3% range for too long (I started in May 2013).

Pet Hog,

Is it yet time for another update from you regarding this?

Vinny

Sure, Vinny -- it does seem like a good time for an update.

I'm at an all-time high again. It looked like the PP had peaked in early September 2019, but it ended the year with a surge during the the last few trading days. My PP gained a nominal 16.7% in 2019 (about 14.3% real -- I'll know more accurately when the CPI for December comes out next week). It was my best year since adopting the strategy, and now my real CAGR is about 4.2% over the six years and seven months since May 2013.

I was always hoping to get into -- and stay in -- the range of 4-6% real annualized. My long-term target for real CAGR is 5.2%. That's the number I got a few years back from a lot of spreadsheeting of the data. I think Tyler's Portfolio Charts gives a real CAGR of 4.9% or thereabouts for the PP rebalanced annually. The extra 0.3% should come from using 35/15 bands and rebalancing only when they are breached. I'm still accumulating and adding to lagging assets, so my PP is getting rebalanced less than annually and perhaps I will underperform for a while longer. Nevertheless, I'm happy with my progress and have no regrets.

This year I'm up 1.5% already. Another good January? I'm hoping for another above-average year to get my real CAGR up a bit higher. Since I hoped for, and received, a 10+% year last year, I'll wish for one again -- for all of us -- in 2020!

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EDIT: With today's CPI number for December, my real PP return for 2019 was 14.4% and my real CAGR since May 2013 has been 4.2%.