Gyroscopic Investing

I was wrapping my head around constructing a global PP and I came up with a super easy allocation that gets you pretty close. Before proceeding it is worth noting that I think an intermediate bond fund is extremely similar to the barbell of bills and 30 years. Essentially interchangeable.

Domestic PP:
25% VTI
25% GLD
50% TLH (intermediate fund)

International PP:
25% VEU
25% GLD
50% BWX (international treasury fund)

Now, you simply allocate to each portfolio based off how much time you plan to spend out of the US (because of currency risk).

So if I were planning to spend half of my time outside of the country I would end up with the following allocation:
12.5% VTI
12.5% VEU
25% TLH
25% BWX
25% GLD

The important takeaway is that going international is riskier if you plan to spend all of your time in the US, but it reduces your risk if planning to spend some time abroad.

A great name for an international sovereign debt fund would be the "James Bond Fund."

The thing with the international bond ETFs is that they tend to move in correlation with stocks (I tried using BWZ a while as cash and leaves him for this reason, since the PP was going up or down following this phenomenon and long bonds failed by themselves to make the necessary counterweight).
Since the idea of cash is to find an inverse correlation with gold the only thing that occurred to me at the time is to let the stocks spread internationally with VT and use UUP to achieve inverse correlation with gold. But I never apply this because I don´t understand well which may be the long-term behavior introducing this variation.

Slotine wrote: Within each currency zone, the negative correlation seems to be holding fine.  But you have to have use for those currencies, otherwise you are exposing yourself to some unneeded currency risk.

Yup. That is why I proposed weighting based off of much time you would spend overseas (spending in currencies other than dollars!)

Slotine,
I am still grappling with gold in an international context. I still think that it is largely dominated by the US... which complicates this super simple construction I laid out. It might take some time for me to stew on your international equity for gold substitution... One thing to keep in mind is that gold protects you from supply induced inflations as well. For example, a sever shortage of energy would drive up all prices including the price of gold (because it takes energy to mine). I don't think equities would be a substitute in this scenario.