Gyroscopic Investing

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm
It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

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How so? Compared to the other two alternatives presented it seems to be the least volatile?

yankees60 wrote: ↑Thu Feb 25, 2021 1:38 pm

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

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How so? Compared to the other two alternatives presented it seems to be the least volatile?

Lower volatility at expense of lower returns..

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

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I don’t run 60/40 in retirement..I am retired and run 30-40% equities ..I was closer to 30 and the portfolio is far less volatile then the pp has been and so far with way better gains since I made the change , even before I made the change it beat the pp but I am more concerned with now.

mathjak107 wrote: ↑Thu Feb 25, 2021 1:53 pm

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

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I don’t run 60/40 in retirement..I am retired and run 30-40% equities ..I was closer to 30 and the portfolio is far less volatile then the pp has been and so far with way better gains since I made the change , even before I made the change it beat the pp but I am more concerned with now.

What does the other 60 or 70 go into? Cash?

What if equities tank 50%?

Usually good years follow bad years for PP. Unfortunately, many people never make it through the bad years and miss out once the sun starts shining again. This happened in 2008 as well though. All the assets dropped momentarily as there was a rush to cash...I have a feeling that will adjust once things start to shake out.

I was almost 40% in cash up until a few days ago...I guess I should have stayed there a bit longer....oooopss.

Who knows? I wanted to sell stocks down to 15% but would have felt crappy missing out on a further surge to 4300 or 4500 on SP....so I held off.

I wanted to hold off on buying bonds a bit longer but would have felt bad missing out on a sharp drop down below 1% if stocks got hammered.

Who could have predicted which way any of this was going to go?

Focus in on 2008...this might be a similar moment. Everything sort of dropped in unison for a while there as well..

Keep getting cut by the falling knife....ouch.

doodle wrote: ↑Thu Feb 25, 2021 2:09 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 1:53 pm

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

4.jpg

I don’t run 60/40 in retirement..I am retired and run 30-40% equities ..I was closer to 30 and the portfolio is far less volatile then the pp has been and so far with way better gains since I made the change , even before I made the change it beat the pp but I am more concerned with now.

What does the other 60 or 70 go into? Cash?

What if equities tank 50%?

Usually good years follow bad years for PP. Unfortunately, many people never make it through the bad years and miss out once the sun starts shining again. This happened in 2008 as well though. All the assets dropped momentarily as there was a rush to cash...I have a feeling that will adjust once things start to shake out.

When I ran the other models the other 60-70% were in short term treasuries, high yield bonds , total bond fund ... they carried not much weight as far as interest rate sensitivity so they did not grab equities by the collar and undo their positive returns ytd

mathjak107 wrote: ↑Thu Feb 25, 2021 3:03 pm

doodle wrote: ↑Thu Feb 25, 2021 2:09 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 1:53 pm

doodle wrote: ↑Thu Feb 25, 2021 1:23 pm It's also important to remember that this comes with a cost...if you are ok with wild swings late into retirement then the PP might not be what you are looking for.

4.jpg

I don’t run 60/40 in retirement..I am retired and run 30-40% equities ..I was closer to 30 and the portfolio is far less volatile then the pp has been and so far with way better gains since I made the change , even before I made the change it beat the pp but I am more concerned with now.

What does the other 60 or 70 go into? Cash?

What if equities tank 50%?

Usually good years follow bad years for PP. Unfortunately, many people never make it through the bad years and miss out once the sun starts shining again. This happened in 2008 as well though. All the assets dropped momentarily as there was a rush to cash...I have a feeling that will adjust once things start to shake out.

When I ran the other models the other 60-70% were in short term treasuries, high yield bonds , total bond fund ... they carried not much weight as far as interest rate sensitivity so they did not grab equities by the collar and undo their positive returns ytd

But in other moments it's been the long bonds portion of the barbell that held the portfolio afloat....back in April didn't they spike 30-40 percent?

Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

It sounds like you're saying when you get in a car and drive, until you reach your destination you are lost.

mathjak107 wrote: ↑Thu Feb 25, 2021 5:24 pm Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

I completely understand what you are saying...but your approach requires one to commit to a full time job trading and following the market, analyzing companies etc. If you want to earn a greater return by spending your time on earth doing that, then that's fine. Personally I can think of a million things I'd rather do than have to figure out where to commit my money on a daily basis. I'm happy with an overall portfolio that grows my money slightly faster than rate of inflation...hence my resignation to occasionally having down days, weeks, or months

Actually the portfolio I used pre pp was just plain ole fidelity funds...it requires no action other than an occasional fund swap one or twice a year ...that is my investment x.

It simply uses the fidelity insight newsletter models ..I have used them since 1987 ....my aunt in her 80’s follows the same models.

A 30 second read in an email is all it takes . There is nothing else to do

doodle wrote: ↑Thu Feb 25, 2021 5:32 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 5:24 pm
Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

I completely understand what you are saying...but your approach requires one to commit to a full time job trading and following the market, analyzing companies etc. If you want to earn a greater return by spending your time on earth doing that, then that's fine. Personally I can think of a million things I'd rather do than have to figure out where to commit my money on a daily basis. I'm happy with an overall portfolio that grows my money slightly faster than rate of inflation...hence my resignation to occasionally having down days, weeks, or months

Matchjak has stated the same innumerable times. And, I completely agree with him.

He is not saying that what you go on to describe is his approach or recommending it to others.

He is simply saying that each day you think you are just staying course and not making any changes...However, you are, in effect, deciding to re-invest in those investments that day. And, the day after that....and, the day after that...and, the day after that.

You think you are not making any investment decisions each one of those days because you don't say anything explicitly or do anything. But implicitly you are making an investment decision every single day, even on all those days when you make no portfolio changes.

Am I correctly interpreting you, Mathjak?

yankees60 wrote: ↑Thu Feb 25, 2021 5:51 pm

doodle wrote: ↑Thu Feb 25, 2021 5:32 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 5:24 pm Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

I completely understand what you are saying...but your approach requires one to commit to a full time job trading and following the market, analyzing companies etc. If you want to earn a greater return by spending your time on earth doing that, then that's fine. Personally I can think of a million things I'd rather do than have to figure out where to commit my money on a daily basis. I'm happy with an overall portfolio that grows my money slightly faster than rate of inflation...hence my resignation to occasionally having down days, weeks, or months

Matchjak has stated the same innumerable times. And, I completely agree with him.

He is not saying that what you go on to describe is his approach or recommending it to others.

He is simply saying that each day you think you are just staying course and not making any changes...However, you are, in effect, deciding to re-invest in those investments that day. And, the day after that....and, the day after that...and, the day after that.

You think you are not making any investment decisions each one of those days because you don't say anything explicitly or do anything. But implicitly you are making an investment decision every single day, even on all those days when you make no portfolio changes.

Am I correctly interpreting you, Mathjak?

I'm committing to a strategy or long term plan of action because I recognize that I and really no one else has any idea what tomorrow will bring. I thought that was a central tenant to all passive investing strategies whether that be this one or Bogles etc. It doesn't make much sense to change strategies every day...especially if one is making determinations by the seat of ones pants.

doodle wrote: ↑Thu Feb 25, 2021 5:57 pm

yankees60 wrote: ↑Thu Feb 25, 2021 5:51 pm

doodle wrote: ↑Thu Feb 25, 2021 5:32 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 5:24 pm
Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

I completely understand what you are saying...but your approach requires one to commit to a full time job trading and following the market, analyzing companies etc. If you want to earn a greater return by spending your time on earth doing that, then that's fine. Personally I can think of a million things I'd rather do than have to figure out where to commit my money on a daily basis. I'm happy with an overall portfolio that grows my money slightly faster than rate of inflation...hence my resignation to occasionally having down days, weeks, or months

Matchjak has stated the same innumerable times. And, I completely agree with him.

He is not saying that what you go on to describe is his approach or recommending it to others.

He is simply saying that each day you think you are just staying course and not making any changes...However, you are, in effect, deciding to re-invest in those investments that day. And, the day after that....and, the day after that...and, the day after that.

You think you are not making any investment decisions each one of those days because you don't say anything explicitly or do anything. But implicitly you are making an investment decision every single day, even on all those days when you make no portfolio changes.

Am I correctly interpreting you, Mathjak?

I'm committing to a strategy or long term plan of action because I recognize that I and really no one else has any idea what tomorrow will bring. I thought that was a central tenant to all passive investing strategies whether that be this one or Bogles etc. It doesn't make much sense to change strategies every day...especially if one is making determinations by the seat of ones pants.

Neither Mathjak or myself are disputing any of that. What each of us are saying that when you commit to something long-term implicitly each day you are deciding to invest all over again in the same assets as you possessed the day before. It's not advocating not adopting a long-term strategy.

yankees60 wrote: ↑Thu Feb 25, 2021 6:21 pm
Neither Mathjak or myself are disputing any of that. What each of us are saying that when you commit to something long-term implicitly each day you are deciding to invest all over again in the same assets as you possessed the day before. It's not advocating not adopting a long-term strategy.

so how does it help your investing ? is it actionable information? does thinking repeating this mantra provide stress free investing some how?

yankees60 wrote: ↑Thu Feb 25, 2021 5:51 pm

doodle wrote: ↑Thu Feb 25, 2021 5:32 pm

mathjak107 wrote: ↑Thu Feb 25, 2021 5:24 pm Think of it this way .

If you had 100k in investment x and you decide to try investment y , and investment y falls 5k and investment x goes up 5k , would you feel you made a mistake UP TO THAT MOMENT ?.

Of course you would , until the day comes , if it comes that investment y is at least doing as well as your original investment x .

So each day our balance is what it is until it’s not ....

Each day it is all our money the same as money in a bank and each day we recommit it at the ring of the bell gives us a new balance and that balance either leaves us higher than we had or lower ....looking in the rear view mirror and going well I made that money over the last 30 years so I am not really down is just mental masturbation ....we do the same when we go well last year I was up 15% so it is not really down this year .

That is bad investor logic when it’s done .

Pretend each day that money came from your bank account as it is all your money just the same

I completely understand what you are saying...but your approach requires one to commit to a full time job trading and following the market, analyzing companies etc. If you want to earn a greater return by spending your time on earth doing that, then that's fine. Personally I can think of a million things I'd rather do than have to figure out where to commit my money on a daily basis. I'm happy with an overall portfolio that grows my money slightly faster than rate of inflation...hence my resignation to occasionally having down days, weeks, or months

Matchjak has stated the same innumerable times. And, I completely agree with him.

He is not saying that what you go on to describe is his approach or recommending it to others.

He is simply saying that each day you think you are just staying course and not making any changes...However, you are, in effect, deciding to re-invest in those investments that day. And, the day after that....and, the day after that...and, the day after that.

You think you are not making any investment decisions each one of those days because you don't say anything explicitly or do anything. But implicitly you are making an investment decision every single day, even on all those days when you make no portfolio changes.

Am I correctly interpreting you, Mathjak?

You got it perfectly

l82start wrote: ↑Thu Feb 25, 2021 6:30 pm

yankees60 wrote: ↑Thu Feb 25, 2021 6:21 pm

Neither Mathjak or myself are disputing any of that. What each of us are saying that when you commit to something long-term implicitly each day you are deciding to invest all over again in the same assets as you possessed the day before. It's not advocating not adopting a long-term strategy.

so how does it help your investing ? is it actionable information? does thinking repeating this mantra provide stress free investing some how?

I had not realized that what you stated are supposed to be the standards for stating any facts?

l82start wrote: ↑Thu Feb 25, 2021 6:30 pm

yankees60 wrote: ↑Thu Feb 25, 2021 6:21 pm
Neither Mathjak or myself are disputing any of that. What each of us are saying that when you commit to something long-term implicitly each day you are deciding to invest all over again in the same assets as you possessed the day before. It's not advocating not adopting a long-term strategy.

so how does it help your investing ? is it actionable information? does thinking repeating this mantra provide stress free investing some how?

Well , how is looking at your balance at any point helping you invest ? It really isn’t , but it is informative as to whether you made a good investing decision or a poor one especially if you have a comparison to something else you could have done up to that moment .

How often you check is up to you but you can have false hopes dig you in a hole if you wait to long .... but never forget all we have is each days balance and a hope it changes if we are losing money.

By that standard me switching to the pp has been a poor decision right up to today and until that changes it is what it is, in comparison a poor decion ..it is way to interest rate sensitive for this environment...could it change ? Sure , but until it does , it is a loser for me in comparison

I understand what you say, mj, but I don't agree.

You just said switching to the pp was a poor decision up to today.

On a 24 hour basis or what?

Tomorrow let's say gold and bonds jump. Was it then a good decision to be in the pp, because your investment started at market open tomorrow morning?

I don't get it. You are obviously factoring in some time in your mind greater than one day in almost all decisions I see you talk about?

Cortopassi wrote: ↑Thu Feb 25, 2021 8:44 pm I understand what you say, mj, but I don't agree.

You just said switching to the pp was a poor decision up to today.

On a 24 hour basis or what?

Tomorrow let's say gold and bonds jump. Was it then a good decision to be in the pp, because your investment started at market open tomorrow morning?

I don't get it. You are obviously factoring in some time in your mind greater than one day in almost all decisions I see you talk about?

It is not a time measurement, it is a dollars measurement .


It is based on a rolling daily balance when compared to the alternative I left for the pp ..we are now talking about a 135k difference between what I was using which was the effortless insight models and left for the pp ...

Between what the pp is down and what the old model is up that is a serious reduction in balance by switching..

So the comparison is a rolling balance daily

Maybe. The pp will have its day in the sun , maybe not ,AND IF the pp does better and it changes, then my view may change of it, and hopefully at some point the amounts get closer but so far BAD MOVE.

As far as my investing benchmark I am down 135k switching from my other conservative model to the pp ...that is all that matters

It is no different then when I go to the gym ..each day is gauged by the day before it and logged as far as what I lift or how far I run ...it does not matter if a year from now I may or may not lift more , or what I did last year or the year before , the benchmark is today .

Otherwise it reminds me of my friend ...he used to tell me how great his mother rose did just buying a bunch of blue chips and never looking at them .

So I said well how do you know she did well ...so he says well she was up and made quite a bit of money .

So I benchmarked them against a simple S&p fund .... once we had something to compare to she did not do well at all ...so just being up does not mean to much unless it is up against what? Other wise you don’t know how you are doing with your plan and you are like rose...you very well may be swimming against the tide , you may be making progress but nothing like you could or should have and actually may have taken on more risk and volatility for less return .

So far this is how the pp is performing compared to my benchmark portfolios.

The income model after yesterday is up 1% , the growth model 3.76% ytd

the other models insight has are the growth and income model up 2.53% and the riskier unique opportunity model up 5.33% ..


The permanent portfolio is down 4% ytd including all dividends ...

Tlt minus 12%

Iau minus 7%

Shy minus .16%

Vti plus 3.25%

So until something bad happens that sparks gold and tlt, the pp may just grow worse and worse in a loss ..you kind of hope that you don’t wait so long for that ship to come in the pier collapses in this environment..we all can speculate all we want about what may cause gold or Tlt to soar but until it happens all we have is a wish

Setting up a little better this morning MJ.
Hopefully TLT will hold these gains.

I saw ...so watch gold sell off lol

mathjak107 wrote: ↑Fri Feb 26, 2021 8:09 am I saw ...so watch gold sell off lol

I have a buy order for IAU this morning.
Time to start shoring up some of the losses.