Gyroscopic Investing

Clive wrote: If you consider the PP as a form of business (stocks), commodity (gold), and cash three way Talmud type split, with a 75-25 (Markowitz) split of the stock and commodity parts (that results in 25% stocks, 25% gold, 50% cash) allocation - but apply that same concept to a blend of home, gold and cash (25% home value, 25% gold, 50% cash) then for UK data since 1972 IT yielded a 3.43% real annualised reward (with a -3.95% worse year decline).

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Some like to consider properties they own as part of their total investment. Others prefer to exclude their home value, often on the basis that you can't easily trade your home value. I quite like the idea of including a house as part of the overall package as there are options to enable some degree of trading such as short and double short property prices ETF's (ETN's?) and/or going long via REIT type ETF's. And you could always upsize/downsize periodically if deemed to be appropriate (buying a larger home when prices were relatively cheap, moving to a smaller home and profit taking when prices were relatively high).

In the UK your primary home has tax efficiency benefits, such as you don't pay capital gains (CGT) on profits. Gold Sovereign's/Britannia's are legal tender and exempt purchase tax (VAT) and CGT. Investing in Gilts can be tax efficient (held in ISA and/or IBond type (N&SI) investments.

Unlike commercial REIT's, house prices have somewhat retained an inverse correlation to stocks, but if you consider your home as a business, perhaps with the intent to move into a modestly run down place to do-it-up at your leisure whilst living there and later sell on for a profit, and also hold some gold and cash, then it looks like historically at least you could have done relatively OK and with low levels of risk.

Clive wrote: Hi Maestro G

In the first post in this thread, that paper I linked to indicates that its better to apply Markowitz on top of Talmud. As a 75-25 stock/bond blend can yield similar rewards to all-stock, but typically does so with less risk, then it makes sense to utilise that effect.

That only applies however to untimed asset holdings. Both GTAA and DM utilise timing, for example GTAA will typically be IN for 70% of the time, OUT for 30% of the time, for each of its assets. Which makes it somewhat like a 70-30 blend anyway. So IMO sticking with 33.3% weightings to each would be appropriate for your choice of assets.

Both GTAA and DM are generally low down/stop loss type approaches, but can generate stock like rewards (or potentially more), so my guess an AMTP could serve you well.

Clive wrote: Hi Maestro G

In the first post in this thread, that paper I linked to indicates that its better to apply Markowitz on top of Talmud. As a 75-25 stock/bond blend can yield similar rewards to all-stock, but typically does so with less risk, then it makes sense to utilise that effect.

That only applies however to untimed asset holdings. Both GTAA and DM utilise timing, for example GTAA will typically be IN for 70% of the time, OUT for 30% of the time, for each of its assets. Which makes it somewhat like a 70-30 blend anyway. So IMO sticking with 33.3% weightings to each would be appropriate for your choice of assets.

Both GTAA and DM are generally low down/stop loss type approaches, but can generate stock like rewards (or potentially more), so my guess an AMTP could serve you well.