Gyroscopic Investing

Just had a thought about seasonal trends.  Different asset classes sometimes exhibit seasonal tendencies that could be taken advantage of to a certain extent. 

For instance, gold demand is notoriously soft during June and July.  If you were looking to buy gold around May, it might make sense to wait until mid-July.  Not always, but often.  In equities, September is typically a poor performing month, but could be a good month to buy on the dip.  So the thought is that perhaps the entire permanent portfolio might exhibit those same tendencies.  The problem is I don't have the data to run on it.  Anyone want to check it out?

One shortcut on this would be to observe the asset classes as a whole.  If two or three are performing well together, it might make sense to keep accumulating cash until the portfolio as a whole begins to suffer--at which point it would be wise to buy lagging assets. Of course this applies to those initially looking to deploy into the portfolio from a traditional portfolio or from all cash--not as much those already in the portfolio.  In the latter camp it would be a good exercise to observe your rebalance bands.

Anyway, just a random thought....

Wonk,

This is an intriguing thought and could easily be incorporated into a methodology for investing with the PP. There are lots of differing opinions on investing/rebalancing such as Dollar Cost Averaging (DCA) and Lump Sum Investing.

The more I read about the different methods, the more I'm convinced that having a consistent technique is the most important, and try to ignore all the noise as the PP is designed to help you do. The method that I've become the biggest fan of is Value Averaging. It's a little different take on the Dollar Cost Averaging, and seems to provide some marginal benefits as well.

Here's an intriguing read about this subject, and some support for it. I know that William (Bill) Bernstein is an advocate for it as well. Requires more work, but is more than doable with the PP or any other for that matter.

http://www.studyfinance.com/jfsd/pdffil ... rshall.pdf

Happy investing!

-b