Has The PP Restored Your Confidence As An Investor?

[MediumTex]

I think this part of the PP story is very important. 

Part of the reason that investing can be so frustrating is the tendency of retail investors to seemingly buy and sell every asset at exactly the wrong time. 

The PP provides a reliable way of avoiding this tendency to buy and sell at the wrong times.  Over time, I think this element of the PP's structure can allow the PP investor to turn frustration into confidence. 

For many investors, I think that a deep sense of confidence in their investments is something they may NEVER have felt.  Thus, the peace of mind that the PP provides is probably something new for many fresh PP converts.

[Pkg Man]

I agree MT, although I do have a bit of apprehension that stocks, bonds, and gold seem to have become positively correlated of late.  In my case, each is up between 6-8% from the time I started the PP.  As I am planning on putting most of my remaining VP into the PP soon I would feel a bit better about the timing if at least one asset were a loser. 

In the long run though it probably won't make much difference.  And from what I have seen so far I do have far more confidence that I can meet my retirement objectives and with much lower risk that I was previously exposed to.

[LNGTERMER]

I agree MT, although I do have a bit of apprehension that stocks, bonds, and gold seem to have become positively correlated of late.

I second that. The fact that LG treasuries did not counteract by much the huge rise in stocks is interesting. Can any one venture to explain the fundamentals behind the correlation of late between these 3, GLD, TLT and VTI?

[Reido]

I noticed that as well...  my only guess is that people may have moved into cash and now that their interest yields have fallen - perhaps they're moving out into all the other asset classes...

While the PP has a cash section, this doesn't necessarily benefit when others move into cash - is this a fair assumption??

[Pkg Man]

I noticed that as well...  my only guess is that people may have moved into cash and now that their interest yields have fallen - perhaps they're moving out into all the other asset classes...

That makes sense to me.  Given the more than usual uncertainty about the direction of the economy (Bernanke's words), it would appear that various bets are being placed simultaneously as there is not a general consensus about what is even likely to happen. 

[craigr]

I think the Fed is behind the scenes causing a lot of interesting things to happen in the bond market. Just a guess.

But the uncertainty makes me happy to know I'm placing bets across the entire board (even on the house numbers) with my asset allocation.

[Pkg Man]

I agree MT, although I do have a bit of apprehension that stocks, bonds, and gold seem to have become positively correlated of late.

I second that. The fact that LG treasuries did not counteract by much the huge rise in stocks is interesting. Can any one venture to explain the fundamentals behind the correlation of late between these 3, GLD, TLT and VTI?

Another day where one asset had a sizable jump (LT Treasuries today) while the other (stocks) saw only a small decline.  I know Clive has commented on the issue of correlations before.  At some point we may see all assets move downward together or least one moves down and another barely moves up.  Of course, we don't know if this might occur tomorrow or a year from now when everything might be at an even higher level than it is today. 

As for me I still intend to bring most of the VP funds into the PP and hope for the best.

[6 Iron]

My confidence has been restored, while my attitude towards my investments has changed.  We are all so used to having one or more parts of the portfolio zig while the others zag, it can be disturbing as noted above to not see it. I now like for some part of the portfolio to go down, so that I can buy assets when they are out of favor. I do not think that I had a true understanding of diversification until watching the portfolio work for me. I would have never previously thought "great! 25% of my portfolio is tanking".