Is this a crazy idea?

General Discussion on the Permanent Portfolio Strategy

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HB Reader
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Re: Is this a crazy idea?

Post by HB Reader »

DonM wrote: HB Reader...You really are way ahead of me.  I may have come across Harry Browne, but was too stubborn to seriously consider it. 
Well, I guess what I meant was that you appear to have started investing a few years ahead of me.

I read my first HB (and investment) book in 1974 and that led me to some fairly successful precious metals investments in the late 1970s, but since I was in school during most of that decade I didn't have much to invest.  Even during the 1970s it wasn't easy though, as there were some prolonged bear stretches in the precious metals.

I read about and flirted with a lot of different investment approaches over the years, but ultimately kept coming back to HB's 1980s PP/VP approach because I always really liked the rigor of formally dividing investments into a PP and a VP.  I began using PRPFX as the core position in our PP not long after it came out in the early 1980's.  I converted most of that to a straight 4x25% portfolio about eight years ago.

I've had some successes and some failures in our VP, but the successes have seldom been consistent and often haven't seemed worth the time, effort and stress.  I have seen a few successful "value" investors over the years for whom I have great respect, but for a variety of reasons I've never been able to recreate their success consistently.

At any rate, like you I've concluded it makes sense to keep most of our money in a PP (far away from the "experts" in the financial services industry) that doesn't require constant attention and to "play" a little on the side with a VP.                   
beafet
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Re: Is this a crazy idea?

Post by beafet »

I think what I will do is use my Roth IRA for a HBPP, and use my wife's to try this out with.
DonM
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Re: Is this a crazy idea?

Post by DonM »

HB Reader...you've got some good comments there.
I always really liked the rigor of formally dividing investments into a PP and a VP.
I also find that to be an experience I enjoy. 
I've had some successes and some failures in our VP, but the successes have seldom been consistent ...
And that is the problem of all 'variable' approaches...the last 2 or 10 year average doesn't do me any good when I am trying to decide where to put money for next year.  My stock portfolio gains are all over the place.  The portfolios with the best overall returns are those with a blended set of assets.  All stock does really well when I get it right.  The blended does okay most of the time.  I needed to build multiple portfolios and found myself naturally gravitating toward a blended/more balanced and a variable approach. 

Fisher Investments, which I think most would agree is a highly respected growth portfolio manager.  2008 wasn't a good year.  Management wrote a letter and told investors that they missed the mark somewhat.  And the growth since 2008 has been very good.  The best can be wrong and what does that do for you?  After 2000 the marketing of this portfolio was it's defensive nature.  That sells well, but then perhaps a HB PP would have been a better choice.  (maybe I need to build a graph)

I'm use to thinking about portfolio goals as: income, growth, growth and income, small stock, aggressive growth, Pan Pacific.  I'm still pondering the idea of using a HB portfolio for retirement, withdrawing from the cash position. 
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