Gyroscopic Investing

mathjak107 wrote: ↑Wed May 06, 2020 2:34 pm
to take it a step further , not only does what happens before and after the time frame you are looking at matter but so does how much you have invested at the time matter .

what happens now to my portfolio in dollars up or down is far greater of an impact then the same moves 30 years ago .

so it is all well and good i was part of th 1980's bull market , but the time frame leading in was some of the worst in history with markets dead for 20 years ... we had little money yet to take part in the great bull ... the size of your portfolio and when , can matter more than the market return itself .

mdwilson1991 wrote: ↑Wed May 06, 2020 7:24 pm I don't guess it matters anymore, but really this belongs in the Vp forum. It is not the PP.

dualstow wrote: ↑Wed May 06, 2020 8:04 pm

mdwilson1991 wrote: ↑Wed May 06, 2020 7:24 pm I don't guess it matters anymore, but really this belongs in the Vp forum. It is not the PP.

No, you're right. It really does.

In 2001, the United States' military airdropped 2.4 million Pop-Tarts in Afghanistan during the US invasion.[11]

Smith1776 wrote: ↑Thu Jul 02, 2020 4:13 am Libertarian666, do you mind sharing a bit more about your thoughts and reasoning behind your portfolio? What's the overall thesis?

How arbitrary are the percentages? Do you have a threshold/target price for gold? What would the rest of the capital markets have to look like for you to put some money into the more traditional assets? Even if you continue to eschew the most common equity funds, would you consider gold miners as part of your portfolio?

Very interested in hearing your perspective.

Libertarian666 wrote: ↑Thu Jul 02, 2020 8:23 am

The overall thesis is that when things are normal, missing out on maximum portfolio performance isn't disastrous.

But when things are insane, it's very important to have a portfolio that can handle such insanity. The last thing I need in a crisis is to have to worry about whether my savings are secure.

As for percentages, those are a byproduct of my foreseeable cash needs and available investing opportunities.

I.e., I bought the Swiss Franc annuity when it was available because I thought it combined low risk and possible capital gains (not for tax purposes but for portfolio purposes). I consider it "deep cash" that can go up in value but should not be accessed except in an emergency or when I can no longer defer taking payments (my age 85). When that happens, I'll probably cash it in rather than take the annuity payout, which isn't very attractive.

Other than that, until recently I've generally kept as much cash as I thought I might need in a couple of years, with the rest being in gold.

Recently I've upped that amount to about 7 years of excess expenses (after Social Security payments). I don't want to have to sell gold at a low point and having that much cash reduces how closely I have to monitor my cash balance.

jalanlong wrote: ↑Fri Jul 03, 2020 7:44 am I am VERY drawn to a portfolio of cash and gold right now along with paying off all of my existing debt. The PP has served me well. And I am well aware of the money lost over the years thinking "this time is different." I didn't think this time was different in the tech bubble nor in 2008. But I just cannot shake the feeling that this time IS different.

Looking at a populace (and media) that seems to be taking a hard left politically and wants no end of "free" stuff that our govt is willing to provide with no way to pay the bill. And with an economy drunk on low interest rates and debt, I just don't see any way that gold and cash (and zero debt) are not the places to be for the forseeable future. I mean the Fed may prop up the markets for a while buying corp bonds and eventually stocks because those are also "too big to fail" given pensions etc. But ultimately can those type of party tricks work forever? My lifetime maybe. But not my child's lifetime and I am accumulating a nestegg for him to receive as well.

jalanlong wrote: ↑Fri Jul 03, 2020 7:44 am I am VERY drawn to a portfolio of cash and gold right now along with paying off all of my existing debt. The PP has served me well. And I am well aware of the money lost over the years thinking "this time is different." I didn't think this time was different in the tech bubble nor in 2008. But I just cannot shake the feeling that this time IS different.

Looking at a populace (and media) that seems to be taking a hard left politically and wants no end of "free" stuff that our govt is willing to provide with no way to pay the bill. And with an economy drunk on low interest rates and debt, I just don't see any way that gold and cash (and zero debt) are not the places to be for the forseeable future. I mean the Fed may prop up the markets for a while buying corp bonds and eventually stocks because those are also "too big to fail" given pensions etc. But ultimately can those type of party tricks work forever? My lifetime maybe. But not my child's lifetime and I am accumulating a nestegg for him to receive as well.

Smith1776 wrote: ↑Fri Jul 03, 2020 8:05 am

jalanlong wrote: ↑Fri Jul 03, 2020 7:44 am I am VERY drawn to a portfolio of cash and gold right now along with paying off all of my existing debt. The PP has served me well. And I am well aware of the money lost over the years thinking "this time is different." I didn't think this time was different in the tech bubble nor in 2008. But I just cannot shake the feeling that this time IS different.

Looking at a populace (and media) that seems to be taking a hard left politically and wants no end of "free" stuff that our govt is willing to provide with no way to pay the bill. And with an economy drunk on low interest rates and debt, I just don't see any way that gold and cash (and zero debt) are not the places to be for the forseeable future. I mean the Fed may prop up the markets for a while buying corp bonds and eventually stocks because those are also "too big to fail" given pensions etc. But ultimately can those type of party tricks work forever? My lifetime maybe. But not my child's lifetime and I am accumulating a nestegg for him to receive as well.

If I may make a suggestion, if you are currently invested in the PP but want to express an active view on the economy, I think it's best to do it by tilting. This is in contrast to totally dumping the assets you don't feel comfortable with. Keep the target allocation of each asset between 20% at least and 40% at most. So, if you like gold, put 40% of the portfolio in gold and 20% in each of the rest. You mentioned both cash and gold though. So how about 30% each in cash and gold, and 20% in stocks and long bonds.

Interestingly, this approach has Browne's blessing. In Best Laid Plans he briefly covers different PP tilts that can allow one to express an active view without breaking the overall balanced nature of the PP. Just make sure to keep the assets between 20% and 40%. Like prosperity? Go 40% stocks ala the Golden Butterfly. Like cash? Tilt 40% to that asset. You get the picture.

Remember that a truly diversified portfolio is likely always going to have at least one asset that you are not comfortable with. Once you go beyond the 20% and 40% ranges it's really not balanced anymore and you've lost the PP "warranty". Don't get me wrong, I'm not saying don't do that. You're a smart and independent thinker who has good judgment to exercise. I'm just offering my 2 cents is all.

buddtholomew wrote: ↑Fri Jul 03, 2020 4:24 pm
Is it 20/40 or 15/35?
I would expect all assets to fall within 15/35% to correspond with recommended rebalancing bands. I am on the fringes with a 40/15/15/30 allocation