401k Options for PP

[Sherlock]

Hi forum - I am looking to implement the Permanent Portfolio from a traditional 80%/20% Asset Allocation. I have been moving several of my investments over, but I am running into issues with a large portion that is in my work's 401k.

My current portfolio is as follows:

Vanguard IRA
9.8% Gold (Physical & AAAU - Perth Mint Physical Gold ETF)
16.1% Cash (Emergency Fund & VMFXX - Vanguard Federal Money Market Fund)
16.5% Bonds (VLGSX - Vanguard Long-Term Treasury Index Fund)

Fidelity 401k
57.6% Stocks (FSKAX - Fidelity Total Market Index Fund)

My issue is choosing funds that are available in my 401k to construct the PP. There are no adequate bond funds that I can see, no gold funds to choose from, and the only cash option is SPAXX which has a high ER especially considering it is supposed to be for the cash portion.

Does anyone have any suggestions or recommendations to move some of my Stock portion into acceptable PP assets? My 401k investment options are listed below, with the ER listed in the 4th column.

Thanks!

AA.png (42.61 KiB) Viewed 2948 times

Target.png (39.24 KiB) Viewed 2948 times

401k Options.png (129.54 KiB) Viewed 2948 times

[Kbg]

Depending on your employer/provider, it can be almost impossible to do a proper PP and that appears to be the case here. I have one such account and the best that you can do is find a traditional mix you are comfortable with. In theory, emerging markets do well when commodities do well and the dollar is not doing well (or both). However, emerging markets are pretty global now as and highly correlated with the developed world. But, there is a little bit there so it is an option in terms of being lightly (very lightly) 'goldish.'

Another option is to consider all accounts as a single one and go with what you got...in practice that can be very problematic as oftentimes you will not be able to rebalance.

[Sherlock]

Thanks for the reply - I was afraid that a proper PP would not be possible with my assets as they stand today. Moving in the PP direction has given me more motivation to invest more heavily outside my 401k in order to achieve something as close as possible.

[pp4me]

Pretty lousy choices but if I had to choose one fund to reduce my stock exposure I'd go with FIPDX. I know TIPS aren't too popular with PPer's but it's got a good expense ratio and pretty good returns right now.

[Hal]

Hi Sherlock,

I see this is your first post, so welcome

To your query: Would it be possible to have all Intermediate Bonds (PRKIX) in your 401K with Gold & Stocks in your IRA?

Have a read of the attachment for further information.

[Sherlock]

Hi pp4me & Hal,

Thanks for the responses.

The 401(k) lemonade utilizing an intermediate treasury fund looks interesting, and I think may work for me.

It seems I may have to decide which is more important, focusing on the overall strategy or having the "best" individual picks in each category. I am inclined to think that the overall strategy will be more important in the long run.

[Sherlock]

Thanks for the welcome by the way. I have been a Boglehead for many years, but a few years ago I became interested in the PP, and listened to all of Harry Browne's radio shows. It took the COVID downturn to remind me that times are not always good and a portfolio should be positioned for more than just the prosperity side of the market. I am just thankful that my portfolio has returned to my February levels, which gives me a good opportunity to update my AA.

I am currently reading Craig's book and setting my retirement up for the decade(s) to come which should be really interesting.

[Hal]

Wish I had as much forethought as you when I was younger in planning my retirement

You may want to check out Tylers portfolio charts site to help you decide on how to proceed.

https://portfoliocharts.com/2019/08/20/ ... vestments/

https://portfoliocharts.com/portfolios/

[PrimalToker]

Hi pp4me & Hal,

Thanks for the responses.

The 401(k) lemonade utilizing an intermediate treasury fund looks interesting, and I think may work for me.

It seems I may have to decide which is more important, focusing on the overall strategy or having the "best" individual picks in each category. I am inclined to think that the overall strategy will be more important in the long run.

The PP Lemonade is not a bad trade off. Merging cash and long treasuries into one intermediate treasury fund is almost the same performance. You're switching from a treasury barbell, to a treasury bullet.

[Sherlock]

Thanks again to all for the advice in this thread. After considering the helpful recommendations and making several trades over the last couple of weeks, my target AA is reflected in the 1st chart below and my current AA is shown on the 2nd chart. The Stocks and Bonds are in my 401k, with Cash and Gold in my IRA.

I should have room to be able to do a hybrid lemonade approach using approx 12.5% Cash / 12.5% LT Bonds in my IRA (Barbell), and 25% IT Bonds (Bullet) in my 401k, which should more or less split the difference between the approaches. Only one transaction to buy LT Bonds left, and I should have a complete Level 1 PP!

PPTarget.png (41.79 KiB) Viewed 2746 times

PPCurrent.png (40.47 KiB) Viewed 2746 times

[Hal]

Congratulations Sherlock,

I would be very happy with that portfolio myself if I lived in the USA.
All the best for your investing future