Gyroscopic Investing

Kel wrote: furgality - why do you say that - (there's no smiley with horns)

frugal wrote:

Kel wrote: furgality - why do you say that - (there's no smiley with horns)

I didnt find any better portfolio. Did you?

Regards

Pointedstick wrote:

frugal wrote:

Kel wrote: furgality - why do you say that - (there's no smiley with horns)

I didnt find any better portfolio. Did you?

Regards

The PP isn't perfect for everyone. I happen to find that it helps me achieve my goals better than any other one I've found, but my goals are very conservative. Someone with a higher appetite for risk tolerance could easily construct a portfolio with a higher CAGR. Heck, it would be as easy as taking the PP, removing cash, and substituting small-cap stocks for the total market allocation. It wouldn't be a PP anymore, but it would still be informed by Harry Browne's thinking, of course. Here's how it would fare (the regular PP is portfolio A, the one outlined above is portfolio B):

frugal wrote: Big PS,

and for your hard earned money you can see it losing 40% ?

frugal wrote: And for active daytrading do you have any strategy?

Pointedstick wrote:

frugal wrote: Big PS,

and for your hard earned money you can see it losing 40% ?

I certainly hope it doesn't, and that's why the PP appeals to me, but anything can happen. Maybe it will turn out that 40% of my money that's with a particular broker is overseen by a crook with political connections to the president who steals it but goes unpunished (coughMFGlobalcough). I hope for the best, prepare for the worst, and expect that nothing is guaranteed.


IF PP HAS A DD OF 30% IT WILL BE HARD TO HANG ON TO IT AND REBALANCE, THAT'S THE MOST BIG ISSUE I FORSEE

frugal wrote: And for active daytrading do you have any strategy?

No, absolutely not! I have no interest in day-trading. I can think of many, many preferable day jobs than buying and selling stocks.

JUST CURIOSITY, TELL ME SOME

frugal wrote:

Pointedstick wrote:

frugal wrote: Big PS,

and for your hard earned money you can see it losing 40% ?

I certainly hope it doesn't, and that's why the PP appeals to me, but anything can happen. Maybe it will turn out that 40% of my money that's with a particular broker is overseen by a crook with political connections to the president who steals it but goes unpunished (coughMFGlobalcough). I hope for the best, prepare for the worst, and expect that nothing is guaranteed.

IF PP HAS A DD OF 30% IT WILL BE HARD TO HANG ON TO IT AND REBALANCE, THAT'S THE MOST BIG ISSUE I FORSEE

frugal wrote: And for active daytrading do you have any strategy?

Pointedstick wrote: No, absolutely not! I have no interest in day-trading. I can think of many, many preferable day jobs than buying and selling stocks.

JUST CURIOSITY, TELL ME SOME

Pointedstick wrote: It will? I don't think so. If the PP falls 30%, that implies that one asset has gone to zero, or all assets have fallen 30%, or something in between. If something that disastrous is happening, the economy is probably in very bad shape. I'm willing to bet that all other portfolios are doing even worse and people are running around terrified, trying to sell ASAP. Sounds like a great opportunity to buy some more assets at rock-bottom prices!

Gumby wrote: The site seems to make the backtesting graphs look extremely smooth. If you had a much higher resolution — say day-to-day or even month-to-month — every portfolio would look far more erratic. For most people, it's the erratic movements between the shown data points that tends to throw people off their game. Combine that with constant media bombardment and you can see why typical investing isn't so easy.

For instance, here is my monthly backtest for the PP (inflation-adjusted) — up to 2011, as I haven't updated it in awhile.

[align=center][/align]

Notice the increased volatility? While the backtesting site is certainly helpful, I don't think it's a realistic view of what it's like to own one of those backtested portfolios.