Gyroscopic Investing

Hi everyone,

Has anyone here tried integrating uncorrelated strategies — such as Carry Trade (e.g., FX carry, bond carry, etc.) or Trend Following (CTA-style, managed futures, etc.) — within a Permanent Portfolio framework?

The idea is to see if these approaches, which theoretically have low correlation with stocks, gold, bonds, and cash, could:

improve risk-adjusted returns,

reduce volatility during stress periods,

or simply add additional diversification without significantly altering the core of the PP.

I’d love to hear if anyone has tested this (backtests, historical data, personal experience) or if there’s any literature exploring the inclusion of systematic, uncorrelated strategies in this type of more classic portfolio.

Thanks in advance!

I started this thread eight years ago. This is what I do - bonds, gold, cash, and trendfollowing equity. Almost zero buy and hold equity. There is a tiny sliver of global equities in my wife's TIAA, I don't manage that.

Right now it's 53% trendfollowing equity, and the other three things held roughly equally, though I pervert it further by having shorter duration bonds, not TLT. We've had long discussions over the years about TLT, for me it's a hard one to own. Some who owned it on 1/1/2022 is still down -33% even after interest payments.

big difference buying tlt today then when rates were in the 1% range .

we are up near historical averages today not way below them like back then.

we saw rates soar in 2022.

i am not a fan of long term bonds but i can see tlt today with the fed more inclined to lower rates or hold them as opppsed to raising them