Gyroscopic Investing

so far it is proving to be exactly the way to go as a conservative investor . it has performed admirably where other supposed portfolios like the pp and all weather dropped the ball.

all results include all expenses. evd is centered around 20-30 year exposure, tyd is centered around 7-10 year bonds . they emphasize different segments of the market

we can say periods of stagflation have gone on for quite long periods of time and stifling the pp so there is always potential for for some time frame to not work .

so far the pp hasn’t come close to providing anything close in risk vs reward to the leveraged risk parity model nor stood up better to our modern day issues

Smith1776 wrote: ↑Sat May 04, 2024 9:12 pm I, too, must confess that I am no longer a user of the pure PP. There are just too many new developments, methodologies, investment paradigms, and considerations for me to warrant sticking with it.

I follow the strategy in my avatar. I genuinely believe that this is not capitulation, but rather an evolution of my thinking. However, only time will tell.

i have been experimenting with the all terrain using american funds .

it’s not a core but i did build it up to a few hundred thousand …

i like the concept although i dont find it a true risk parity portfolio like the carolina reaper is

i used

25% cash instruments

25% vt world stock market

25% bndw world bond , about a 7 year duration unlike the pp long term bond position.

15% PDC commodities

5% gld gold

5% ibit bitcoin .

i had already owned the bitcoin , commodities , cash and gold so it was easy to throw together

mathjak107 wrote: ↑Tue Jun 04, 2024 3:35 pm

Smith1776 wrote: ↑Sat May 04, 2024 9:12 pm I, too, must confess that I am no longer a user of the pure PP. There are just too many new developments, methodologies, investment paradigms, and considerations for me to warrant sticking with it.

I follow the strategy in my avatar. I genuinely believe that this is not capitulation, but rather an evolution of my thinking. However, only time will tell.

i have been experimenting with the all terrain using american funds .

it’s not a core but i did build it up to a few hundred thousand …

i like the concept although i dont find it a true risk parity portfolio like the carolina reaper is

i used

25% cash instruments

25% vt world stock market

25% bond world bond , about a 7 year duration unlike the pp long term bond position.

15% PDC commodities

5% gld gold

5% ibit bitcoin .

i had already owned the bitcoin , commodities , cash and gold so it was easy to throw together

I agree. It's not true risk parity.

Either way I'm honoured and happy to see that someone else is experimenting with it.

it was a no brainer since i already held so many of the holdings . i just beefed them all up enough to make it interesting.

i need enough money in these experiments to make it worthwhile

mathjak107 wrote: ↑Tue Jun 04, 2024 4:06 pm it was a no brainer since i already held so many of the holdings . i just beefed them all up enough to make it interesting.

i need enough money in these experiments to make it worthwhile

Excellent.

Next achievement will be getting the portfolio onto Tyler's illustrious Portfolio Charts website.

for comparison the reaper is up 1.51% right now for the day ,my all terrain .49

Smith1776 wrote: ↑Wed Jun 05, 2024 2:09 pm

mathjak107 wrote: ↑Tue Jun 04, 2024 4:06 pm it was a no brainer since i already held so many of the holdings . i just beefed them all up enough to make it interesting.

i need enough money in these experiments to make it worthwhile

Excellent.

Next achievement will be getting the portfolio onto Tyler's illustrious Portfolio Charts website.

one can even create a version of the butterfly here by increasing equities….overall i think you did a fine job there … it’s very similar to the ray dalio all weather but without that heavy concentration in long term bonds and a heavier weighting to commodities.

overall i think i would consider it a modern day permanent portfolio.

it fixes the overall dependency on interest rates which i have always disliked about the pp in more recent times while employing modern day asset classes like bitcoin and commodities via simple etfs

considering that hit in bonds and gold today with the jobs report ,not to bad

for comparison

reaper is up a bit as dbmf the managed futures fund saves the day .

all terrain down ..39

the interest rate sensitive pp down 1.13

mathjak107 wrote: ↑Fri Jun 07, 2024 4:46 am one can even create a version of the butterfly here by increasing equities….overall i think you did a fine job there … it’s very similar to the ray dalio all weather but without that heavy concentration in long term bonds and a heavier weighting to commodities.

overall i think i would consider it a modern day permanent portfolio.

it fixes the overall dependency on interest rates which i have always disliked about the pp in more recent times while employing modern day asset classes like bitcoin and commodities via simple etfs

Thanks for the kind words!

As for the Golden Butterfly-esque version of this, is this kinda what you were thinking? (just a mock up for visualization)

yes , that would be a version

Ill ask here before bogleheads. then will update this post.

Considering PSLDX. 2x SnP + 2x long bonds. Is this how it works (explain like I'm 12):

I give PIMCO $10,000. They borrow 10k from (a big commercial bank?) at the daily SOFR rate, currently 5.3%

PIMCO buys 10k of SnP 500 and 10K long bond fund w/14 year duration. (Simplified, half VFIAX half VBLAX)

When would a margin call happen. ie how could I get wiped out with no possibility to recover.

This is for long term hold in vanguard IRA.
https://www.optimizedportfolio.com/psldx/

Somewhat similar alternative?


https://monevator.com/asset-allocation- ... -weathers/

The All-Weather portfolio: how it protects what you have
Updated by THE ACCUMULATOR on JULY 16, 2024
Conventional equity / bond portfolio splits did not acquit themselves well during the cost-of-living crisis. When the enemies at the gate were fast-rising interest rates and inflation, standard portfolios looked like a suit of armour missing its faceplate – nominally effective but with a glaring weak spot.

If only someone would invent the faceplate.

Well as it happens, somebody already has.

The All-Weather portfolio integrates a fuller spectrum of defences – including assets with a better record against the withering winds of inflation. (Hmm, smooth metaphor mixology – Ed).

We’ll examine the long-term track record of the All-Weather portfolio in a minute. But first we need to ask…

What is the All-Weather portfolio?
The All-Weather portfolio was popularised by Ray Dalio, the founder of the Bridgewater hedge fund behemoth.

The portfolio is configured to contain downside risk by including a variety of asset classes such that the portfolio as a whole is capable of performing regardless of the macroeconomic conditions.

Bridgewater identified the weather conditions that investors should prepare for as:

Economic growth
Economic slowdown
Inflation
Deflation

yankees60 wrote: ↑Tue Jul 16, 2024 9:22 am Somewhat similar alternative?

The All-Weather portfolio integrates a fuller spectrum of defences – including assets with a better record against the withering winds of inflation. (Hmm, smooth metaphor mixology – Ed).

Not really All-Weather. Ray Dalio now says he doesn't want to hold debt and cash is good....
It would appear Harry Browne was correct in anticipating a High(er) interest rate environment could occur, hence his 25% Cash allocation.

Isn't it great to have 20/20 Hindsight

boglerdude wrote: ↑Mon Jul 15, 2024 5:01 am Ill ask here before bogleheads. then will update this post.

Considering PSLDX. 2x SnP + 2x long bonds. Is this how it works (explain like I'm 12):

I give PIMCO $10,000. They borrow 10k from (a big commercial bank?) at the daily SOFR rate, currently 5.3%

PIMCO buys 10k of SnP 500 and 10K long bond fund w/14 year duration. (Simplified, half VFIAX half VBLAX)

When would a margin call happen. ie how could I get wiped out with no possibility to recover.

This is for long term hold in vanguard IRA.
https://www.optimizedportfolio.com/psldx/

Counterparty risk. PIMPCO & leveraged ETF providers hold contractual obligations (swaps/derivatives) from other financial institutions. In a financial crisis (like the one in 2008) involving one or more of these institutions, a liquidity event could create an insolvency that takes down the entire company, rendering it unable to satisfy derivative obligations to another company such as PIMPCO. That brings into question whether the failing institution would be considered systemically important, in which case a bailout would likely occur and counterparties would likely be made whole, or partially whole. Impossible to know that ahead of time though. I would imagine if the event is isolated, the institution would likely be allowed to fail. But if it became one domino in a series of failures that would threaten the entire system, it would likely be bailed out.

Leverage cuts both ways. It can be great or it can be terrible.