Permanent Portfolio Forum
https://www.gyroscopicinvesting.com/forum/
https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=4654
Bitcoin:
There are +ve and -ve sides. Tangible in-hand assets have distinct advantages/disadvantages, ditto intangible. In hand physical assets have the advantage that for someone else to take some/all of that they have to physically come and prise them out of your hands, with digital/intangible they might take some/all of the value remotely by pressing buttons. When fungible, moving tangible assets across international borders might be performed by conversion to intangible, digitally transferring that and then converting to tangible again at the desired target location - sell physical gold for PAXG locally, convert PAXG to physical gold at the target destination.
seajay wrote: ↑Tue Oct 21, 2025 12:46 amThere are +ve and -ve sides. Tangible in-hand assets have distinct advantages/disadvantages, ditto intangible. In hand physical assets have the advantage that for someone else to take some/all of that they have to physically come and prise them out of your hands, with digital/intangible they might take some/all of the value remotely by pressing buttons. When fungible, moving tangible assets across international borders might be performed by conversion to intangible, digitally transferring that and then converting to tangible again at the desired target location - sell physical gold for PAXG locally, convert PAXG to physical gold at the target destination.
Divisibility …
I'm so glad I have rebalanced! :-)
Amazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.flyingpylon wrote: ↑Tue Oct 21, 2025 11:45 am Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.
I made the same trade in March 2020 but it was more of a “YOLO” that worked out. I have since created this “may rebalance” thing to give myself some flexibility. If I wasn’t in the zone I would just chalk it up to market noise and ignore it as far as trading was concerned. But it also points out that there’s value to paying at least some attention to what markets are doing despite having a “lazy portfolio”. In this case I just felt that gold had jumped too far too fast so it was worth making a move. If it shoots up tomorrow or next week or whatever I would have had to rebalance anyway. Trades like this are fun but I hold other assets that prove I’m not so smart or lucky.dockinGA wrote: ↑Tue Oct 21, 2025 2:49 pmAmazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.flyingpylon wrote: ↑Tue Oct 21, 2025 11:45 am Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.
As an aside, it's just another example of the importance of having some type of plan, written or otherwise, and then sticking to it through good times and bad. When I bought a bunch of stocks in 2020 it felt like I was just lighting cash on fire, but I did it anyway because that was the plan. Yesterday felt like I was taking tons of future gains off the table (and I still feel that way), but there is at least some vindication today and increased resolve to just stick with the plan.
I've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.flyingpylon wrote: ↑Tue Oct 21, 2025 11:45 am Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.
My friend, who is another member here, did a post a while ago. Should be possible to find it through search.stpeter wrote: ↑Tue Oct 21, 2025 6:32 pmI've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.flyingpylon wrote: ↑Tue Oct 21, 2025 11:45 am Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.
In my experience with the PP/GB so far, it has really paid off to give close attention to times of crisis or irrational exuberance. I too rebalanced in March or April of 2020 because things were so far out of whack. (I almost rebalanced in April of 2025 during the "Liberation Day" madness, but I had recently switched from PP to GB and didn't want to rock the boat quite yet.) Following a "lazy portfolio" strategy doesn't mean you shouldn't stay alert.flyingpylon wrote: ↑Tue Oct 21, 2025 4:53 pmI made the same trade in March 2020 but it was more of a “YOLO” that worked out. I have since created this “may rebalance” thing to give myself some flexibility. If I wasn’t in the zone I would just chalk it up to market noise and ignore it as far as trading was concerned. But it also points out that there’s value to paying at least some attention to what markets are doing despite having a “lazy portfolio”. In this case I just felt that gold had jumped too far too fast so it was worth making a move. If it shoots up tomorrow or next week or whatever I would have had to rebalance anyway. Trades like this are fun but I hold other assets that prove I’m not so smart or lucky.dockinGA wrote: ↑Tue Oct 21, 2025 2:49 pm Amazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.
As an aside, it's just another example of the importance of having some type of plan, written or otherwise, and then sticking to it through good times and bad. When I bought a bunch of stocks in 2020 it felt like I was just lighting cash on fire, but I did it anyway because that was the plan. Yesterday felt like I was taking tons of future gains off the table (and I still feel that way), but there is at least some vindication today and increased resolve to just stick with the plan.
Yes, there are always tradeoffs. Plus, I'm not smart enough to understand all the tax implications.Ugly_Bird wrote: ↑Tue Oct 21, 2025 6:38 pmMy friend, who is another member here, did a post a while ago. Should be possible to find it through search.stpeter wrote: ↑Tue Oct 21, 2025 6:32 pm I've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.
The post was showing the analysis of differences between using different rebalance bands.
There wasn't much advantage in narrower bands. Also, they may add tax liability from more frequent trading if some portion of the portfolio is not in tax differed account.
However, from the perspective of sleeping well at night (a big draw of PP/GB for me), I don't want to get all stressed out about that last 1-2% with the wider bands. YMMV.I found it! :-) It's tested from 2004-2011 (the year of the post) but I do not think running it to 2025 would significantly change anything.stpeter wrote: ↑Tue Oct 21, 2025 6:47 pm Yes, there are always tradeoffs. Plus, I'm not smart enough to understand all the tax implications.
Completely agree. When I started with the PP back in 2014 I, by chance, picked the 20th of each month to assess the portfolio. When I had lots of extra income coming in and not as much in the portfolio, I let the composition of the portfolio drive what I bought for that month. Now that I've semiretired, I still do the monthly checkup on the 20th each month, but it's rare that I need to do anything, even though I use the tighter +/-5% bands. Again, make a plan and stick to it. Check it monthly, yearly, daily, never, whatever you want to do. Just make sure emotion stays out of your investment decisions.
