Gyroscopic Investing

Just wanted to get some thoughts on this..
PIMCO 25+ Yr Zero Cpn U.S. Trsy Idx ETF  ZROZ  fell
-9.10% I haven't followed treasuries as long as many of you.

here is the article http://www.bloomberg.com/news/2011-08-1 ... -sale.html

Interesting article.  The 30 year treasuries usually move in exact opposite of the stock market as a whole.  The market was up 4% today, but LT bonds were down about 5%.  If the market drops again tomorrow expect long bonds to rise.

Those of us that have been using the PP for a while now don't really pay much attention to 1 day spikes.  Yesterday the market was in "doom and deflation" mode.  Today they're in "growth and inflation" mode.  Especially in the last couple of weeks it has been fluctuating non-stop.

If you ask my opinion, concerns about inflation are about the last concerns we should have right now.  Deflation is much more likely to happen.  If you ask the Permanent Portfolio's opinion, it doesn't care one way or the other, since it has assets that will do well in either environment. 

LT treasuries gave back a couple of days of gains.

Nothing to get excited about.

Pay attention to the whole portfolio, not the individual assets.

If I got a PP tattoo, I think it would be the sentence above.

what concerns me the most about the PP,  warranted or not, is the behavior of the portfolio on an up day in the overall market. On days where the S&P performs well, the gain doesn't seem to offset the losses in Gold or Treasuries. Conversely, when the market tanks, Gold and Treasuries carry the portfolio.

buddtholomew wrote: what concerns me the most about the PP,  warranted or not, is the behavior of the portfolio on an up day in the overall market. On days where the S&P performs well, the gain doesn't seem to offset the losses in Gold or Treasuries. Conversely, when the market tanks, Gold and Treasuries carry the portfolio.

If that were true, the PP would not have made any gains during the 80s and 90s. The PP did just fine during those decades — a steady gain the entire time.

Gumby wrote:

buddtholomew wrote: what concerns me the most about the PP,  warranted or not, is the behavior of the portfolio on an up day in the overall market. On days where the S&P performs well, the gain doesn't seem to offset the losses in Gold or Treasuries. Conversely, when the market tanks, Gold and Treasuries carry the portfolio.

If that were true, the PP would not have made any gains during the 80s and 90s. The PP did just fine during those decades — a steady gain the entire time.

And more recently the stock market basically doubled in the 2009-2010 period, and the PP had very nice years in 2009 and 2010.