Gyroscopic Investing

Not wishing to incur the wrath of diehard PP'ers here but I'm curious to hear other's thoughts on using some or all Intermediate-Term Treasuries (e.g. VGIT with ~ 5 year duration) for the LTT part of the PP or GB.

I suppose another idea would be to do the traditional barbell but perhaps reduce the LTT's in the PP to 15% or so, or use a fund like VGLT that has shorter duration than TLT.

As I recall from many previous threads here and on Bogleheads using 100% ITT's for the bond and cash/STT part of either of these portfolios has historically produced nearly identical returns to the barbell but with less volatility. All of that of course is through the rearview mirror what with even newly-issued 30 year Treasuries barely providing a positive real yield.

I like that VGIT is a pure Treasury fund, as opposed to VUSTX, the long term fund that has a lot of non-Treasury bonds and a higher ER to boot. If I were to make any mods to the PP, I'd probably go to a 50% ITT, 25% gold, 25% stock Simple PP.

Kevin K. wrote: ↑Sat Feb 06, 2021 2:53 pm As I recall from many previous threads here and on Bogleheads using 100% ITT's for the bond and cash/STT part of either of these portfolios has historically produced nearly identical returns to the barbell but with less volatility.

My recollection is also that it was perfectly kosher.

I go back and forth on this. Cash is supposed to be for tight money. That’s a laugh in this new world banking order. So I don’t care what anyone does with their cash portion.

LTTs have done their deflation job quite well. Hard to make a case going forward.

To me a five year substitution for both is not a PP. However in a world where risk pricing is so distorted, who knows.

We've got 3 options on this: 1) barbell, 2) ladder, 3) bullet. In the long run you're not likely to find material performances differences between the three. At least, as long as average duration and credit risk are comparable.

In the GoldSmith PP we utilize a bond ladder via Vanguard all-in-one products. I'm satisfied with this approach, but would not be uncomfortable with either the bullet or barbell.

Thanks for the thoughtful responses everyone!

FWIW for those who do want to own LTT's using and ETF, SPTL is pure Treasuries, ~25 years duration and only .06% ER. Seems like a better choice than VGLT and arguably even TLT.

Not inclined to venture into longer-duration bonds myself at the moment. Good article today about some of the dangers to both stocks and bonds as this debt-fueled "recovery" continues:

https://www.bloomberg.com/news/articles ... ond-yields

It was fun comparing my self-managed long term Treasury fund with the institutional ones.
You can tell I bought most of my bonds years ago and haven't been buying many newer ones. My overall duration is right in the middle of VGIT's 5.3 and the current (theoretical?) PP 12.1. Mostly due to derp.

Derp is key.

You get what you pay for

Kriegsspiel wrote: ↑Sun Feb 07, 2021 1:43 pm You get what you pay for

Well, I’m sticking with free. I love buying treasuries directly.