Universal PP

[Hal]

On considering a PP that could be used in multiple countries, came up with this concept for critique by the forum.

25% Cash in your local currency, 25% each Gold, International Shares & Intermediate bonds.
Thoughts?

PS: What would happen if you used International LT bonds hedged to your local currency? eg:https://www.betashares.com.au/fund/beta ... cy-hedged/

Edit: This video prompted the variation on Smiths 2 fund PP now I discovered International Gov't Bond ETF's exist in Australia
https://www.youtube.com/watch?v=FAZjlxWNszw

[I Shrugged]

I think the bond allocation is the stickiest issue. I have no problem with the other three. The reserve currency deal is a game changer. So far, in times of trouble, money flows into US Treasuries. Can that be said of any other sovereign bonds?

[Hal]

What surprised me is how well this allocation did with some of the PIGS countries....
It appears International Bonds do better than local bonds.

[Vil]

Local currency hedge have to be well taken into account, IMHO. See EUR/USD in the recent months. While its not the wildest swing ever seen, it definitely is a game changer in a way that brings extra unknown variable in the PP equation set - nothing more, nothing less ... Regarding bonds - I would agree that US Treasuries are the main target during market turmoils, also with diversified international bonds you get almost always decent percent of laggards and credit risk too...

[Hal]

Good point I Shrugged & Vil,

Replacing the bonds with US LT's doesn't look too bad