Gyroscopic Investing

Just for my interest, how many people here run a basic PP with only 4 ETFs? Do you feel comfortable with your funds in only a limited number of vehicles?

I run it with three ETFs, personally. I have replaced the t-bills part with real cash, meaning a savings account. I don't see anything wrong with that, and I'm surprised that you'd say "only 4 ETFs".

Isn't that the beauty of the PP, its simplicity?

I have three as well - as due to some limitations have bond bullet, instead of the LTT/cash separation.

You could go for the Smith PP with only two components

europeanwizard wrote: ↑Mon Apr 27, 2020 12:22 am I run it with three ETFs, personally. I have replaced the t-bills part with real cash, meaning a savings account. I don't see anything wrong with that, and I'm surprised that you'd say "only 4 ETFs".

Isn't that the beauty of the PP, its simplicity?

It is but a huge amount of posts in this forum are about splicing/dicing/tweaking the PP with savings bonds, TIPS, small cap funds, dividend stocks etc. I was wondering how many people still run a basic 4x ETF PP and if they are satisfied with the risks and returns without any tweaking.

jalanlong wrote: ↑Mon Apr 27, 2020 7:53 am I was wondering how many people still run a basic 4x ETF PP

Honestly, I decided for myself I do not care about the exact percent of forum members that follow the pure PP doctrine. Going too much in such a "investigation" is simply not worth, methodology is clear, graphics are all there, numbers too, not to say anyone can run any sort of back-testing and decide for him/herself. I always put anything said or written under a healthy dose of suspiciousness and hope that all should be fine

Hal wrote: ↑Mon Apr 27, 2020 6:47 am You could go for the Smith PP with only two components

Like a mechanic that really likes a particular model of car, I really enjoy thinking about and analyzing the Goldsmith variation of the PP.

It's really satisfying to think about a strategy that manages to combine two diametrically opposed results together into one allocation.

1) A simpler portfolio
2) Significantly improved diversification

Those two things don't normally happen together. Diversification usually means adding in more securities and increasing complexity. It's really a best of both worlds scenario.

I also think that a Goldsmith approach can make it easier to stay the course overall. Having only two securities can significantly mask the fluctuations in NAV of the underlying asset classes. The investor is less likely to worry about whether, say, stocks are overvalued at current prices when they've been lumped in with bonds and cash.

Smith1776 wrote: ↑Thu May 07, 2020 10:33 pm I really enjoy thinking about and analyzing the Goldsmith variation of the PP.

I can recall when Vanguard introduced the new series of ETFs (VBAL, VCNS, VGRO, etc) - it was a year ago I think (or two?) when they were exposed. They looked really nice, simple and lazy and caught my attention "Only" problem was that those were not listed on any EU market. Haven't checked since then, but I guess nothing has changed, as opposite to BlackRock, Vanguard are not really interested in the EU market. All the recent years' EU market analysis show a steep increase of retail interest about ETFs and still we appear really a small piece of the pie.. that small to not be considered worth the effort ...

Vil wrote: ↑Fri May 08, 2020 2:53 am

Smith1776 wrote: ↑Thu May 07, 2020 10:33 pm I really enjoy thinking about and analyzing the Goldsmith variation of the PP.

I can recall when Vanguard introduced the new series of ETFs (VBAL, VCNS, VGRO, etc) - it was a year ago I think (or two?) when they were exposed. They looked really nice, simple and lazy and caught my attention "Only" problem was that those were not listed on any EU market. Haven't checked since then, but I guess nothing has changed, as opposite to BlackRock, Vanguard are not really interested in the EU market. All the recent years' EU market analysis show a steep increase of retail interest about ETFs and still we appear really a small piece of the pie.. that small to not be considered worth the effort ...

Vil, do you reside in Europe? I just find it curious that someone has intimate knowledge of the ETF landscape on both sides of the pond.

What is the composition of the Goldsmith PP?

ppnewbie wrote: ↑Sat May 09, 2020 11:34 pm What is the composition of the Goldsmith PP?

The composition would vary slightly depending on the Vanguard fund (or equivalent) available in your country.
Here is the link for The Australian version.

https://gyroscopicinvesting.com/forum/v ... 1&p=185313

Mr Goldsmith himself can enlighten you further.
I believe he is now in Canada studying engineering

Smith1776 wrote: ↑Sat May 09, 2020 5:07 pm Vil, do you reside in Europe? I just find it curious that someone has intimate knowledge of the ETF landscape on both sides of the pond.

Yes, I do. Did bussiness travelling for quite a while (lived abroad as well..and still have US visa), but currently I am settled here, where I was born as well. Regarding my interest in the ETF landscape... well, retail investing in EU is not quite comparable with retail investing in US, in a way that you have more instruments available, more liquidity 'accessible', etc. etc. and normally the innovations in the market first come to you. Though, still I keep trying being informed what eventually may land up here in EU .
On the other hand, there are certain EU regulations (as UCITS, PRIIPS, KIDs, etc.) that EU bureaucrats were very happy to create several years ago - those regulations make the US ETF providers even more unwilling to list those ETFs on our stock markets.. Anyway, the only positive thing is that we have here the 'accumulating' ETFs available - you have the dividends automatically reinvested and that has both the advantages of convenience and in certain cases - relaxed taxation.

Hal wrote: ↑Sun May 10, 2020 12:47 am

ppnewbie wrote: ↑Sat May 09, 2020 11:34 pm What is the composition of the Goldsmith PP?

The composition would vary slightly depending on the Vanguard fund (or equivalent) available in your country.
Here is the link for The Australian version.

https://gyroscopicinvesting.com/forum/v ... 1&p=185313

Mr Goldsmith himself can enlighten you further.
I believe he is now in Canada studying engineering

Perfect - thanks Hal. I also followed the thread back to the original post.

Yeah, that original post pretty much covers the gist of it!

Overall I think us non-U.S. PP investors benefit a lot from having international diversification. Beyond that, The Goldsmith variation simultaneously improves a portfolio's simplicity.

It's probably my overall favourite PP implementation, and I'm happy to have made my own little contribution to implementation methodology.

U.S. investors need not apply. It must be nice when your home country has over 50% of global equity capitalization!

EDIT: spelling

Hal, that picture is hilarious. lmao.

Vil wrote: ↑Sun May 10, 2020 8:06 am Yes, I do. Did bussiness travelling for quite a while (lived abroad as well..and still have US visa), but currently I am settled here, where I was born as well. Regarding my interest in the ETF landscape... well, retail investing in EU is not quite comparable with retail investing in US, in a way that you have more instruments available, more liquidity 'accessible', etc. etc. and normally the innovations in the market first come to you. Though, still I keep trying being informed what eventually may land up here in EU .
On the other hand, there are certain EU regulations (as UCITS, PRIIPS, KIDs, etc.) that EU bureaucrats were very happy to create several years ago - those regulations make the US ETF providers even more unwilling to list those ETFs on our stock markets.. Anyway, the only positive thing is that we have here the 'accumulating' ETFs available - you have the dividends automatically reinvested and that has both the advantages of convenience and in certain cases - relaxed taxation.

Very interesting. It amazes me how much the PP philosophy has spread to people all over the world. This also makes our community better since it means we have local experts from just about everywhere.