Gyroscopic Investing

I commented on other posts that I learned of the PP about 2 years ago.  To gain comfort over the concept, I kept tabs on the PP results for those two years, and then decided to invest a portion of my portfolio - about 6% - in early September.  I am using ETFs - GLD, SHY, VLT and VTI.

Although others comment that you should not look at the PP results every day, I have been.  As is my luck, the PP declined in early September.  Gold took a dive, although that was somewhat offset by bonds and equities.  So I went through all of September and the better part of October before my PP went positive.  As of today I am up 2% YTD.  2% in two months is pretty good nowadays.

It is interesting to watch the interaction of the four PP componets.  On any given day some are up while others are down.  The volitility of the PP is quite low compared to the S&P 500, for example.  The volitility of my other investments looks like a wild roller coaster ride.  Yesterday the Wall Street Journal tracked a $10,000 investment in the S&P 500 from June 30, 2011 to date.  On any given day it was up or down 15%.  Like a roller coaster, that could make you barf.

Although two months experience is not long, I like what I see in the PP.  I am 54 years old and hope to retire by the end of 2012.  Most of my investments are held inside 401(k) accounts and some deferred compensation accounts, where my investment options preclude using the PP.  But I will likely move more dollars into the PP when I do retire and have more flexibility.

So, to all those who are looking at the PP, I hope my experience helps in your decision-making process.

Thanks for sharing!

Glad to hear that you are happy so far!  Big congratulations on your upcoming early retirement, BTW.  That's a great achievement.

Starting off with the PP is hard.  It requires you to reject many layers of conditioning about markets, investing, and the role of experts.

It's easy to forget that the confidence long use of the PP provides an investor is not normally there at the very beginning.  What is there on day one is often an uneasy experiment with an investment strategy that most people would say is crazy (and it certainly looks crazy).

Congratulations on making the plunge.  I'm glad to hear you have been pleased with the results thus far.

EdwardjK wrote: Although others comment that you should not look at the PP results every day, I have been.  As is my luck, the PP declined in early September.  Gold took a dive, although that was somewhat offset by bonds and equities.  So I went through all of September and the better part of October before my PP went positive.  As of today I am up 2% YTD.  2% in two months is pretty good nowadays.

Funny, when I started my PP nearly a year ago I encountered similar results.  Lots of doubts during that time.  Then a series of surges occurred over the next 8-10 months of accumulation (bonds, gold, and stocks each had a turn) which made me especially appreciate the quote below.

jackh wrote: Right now I would liken the PP to a surfer waiting for the next big wave to ride, not knowing when or from which direction it is going to come but having faith that it eventually will. The only thing I know for sure is that if you're not in the water you're not going to catch it.

You may very well be surprised how well your initial investment does over time.  For me, my initial investment that began with negative to fairly modest returns is now culminating in a ~13% gain 10 months later.  It is fun watching the PP components do their thing over time.