Gyroscopic Investing

I just finished reading Craig's book after hearing about the Permanent Portfolio a year ago. I have decided to switch my IRA completely to the PP. However, at the moment, 3 of the four pieces are at or near 5 year highs. Stocks (S&P just went over 1500 today), Gold (not at record but close), and Long bonds are all at multi year highs. Is this a good time to start or should I wait a bit. I know that Craig says jump in feet first, but I'm wondering if anyone else had similar hesitations when starting. Thanks for your input.

Fred

fpugh1950 wrote: I just finished reading Craig's book after hearing about the Permanent Portfolio a year ago. I have decided to switch my IRA completely to the PP. However, at the moment, 3 of the four pieces are at or near 5 year highs. Stocks (S&P just went over 1500 today), Gold (not at record but close), and Long bonds are all at multi year highs. Is this a good time to start or should I wait a bit. I know that Craig says jump in feet first, but I'm wondering if anyone else had similar hesitations when starting. Thanks for your input.

Fred

Fred, anyone who says that they did not have some concern about buying one or more of the assets when they started the permanent portfolio is either lying, or a savant. And I can almost guarantee you that one of them will be a dog this year. I could offer a guess as to which it will be, but it would be just that, a guess. When you are considering starting, it is very difficult, but after you are in for a few months, those feelings of insecurity, and the need to predict the future start to fade. All the faster if you don't focus on the movement of the individual components, but focus on your work skills, saving, and the bottom line. Good luck, and welcome, and know that your concerns are not unique.

You are not alone. I have gone in incrementally over the past 2 years. About everything except cash has gone up in price over that time, so it fits well with my strategy of consistently buying high and selling low. 

I am also struggling getting started esp. with the Dow almost at an all time high, all the dire warnings about LT treasuries, and the constant media hype about the US defaulting.  I did open IAU but keep second guessing going further.

scubablue wrote: I am also struggling getting started esp. with the Dow almost at an all time high, all the dire warnings about LT treasuries, and the constant media hype about the US defaulting.

Your first task is to ignore that nonsense and come here for your financial news.  People have been predicting a treasury crash for years, decades, even. With the recent slight uptick in interest rates, I think now would be a great time to buy in. Same with gold, which has declined in the past few weeks relative to its recent highs. Take the plunge!

Thanks!  I have been in PRPFX for several years and quite happy with the results.  I know all common sense goes against trying to "time" the investments but it's still a bit disconcerting.

Getting comfortable with the PP just takes some time and humility.

It's also helpful to have had some really bad investing experience with conventional strategies.

As far as buying all of the PP assets, if you just accept that at least one will always be doing poorly, the way the portfolio behaves after you set it up will be less stressful.

The PP creates an entirely new pattern of thought for most investors.  It takes some time to hammer your brain into a new way of thinking about something as emotional and stressful as investing.

MediumTex wrote: Getting comfortable with the PP just takes some time and humility.

It's also helpful to have had some really bad investing experience with conventional strategies.

As far as buying all of the PP assets, if you just accept that at least one will always be doing poorly, the way the portfolio behaves after you set it up will be less stressful.

The PP creates an entirely new pattern of thought for most investors.  It takes some time to hammer your brain into a new way of thinking about something as emotional and stressful as investing.

True, boss MT.

The difficulty I found was to set up all the positions at the same time. Using different instruments is not easy to make all them working at simultaniously.




rgds

frugal wrote: True, boss MT.

This is how I picture boss MT:

MediumTex wrote: Getting comfortable with the PP just takes some time and humility.

It's also helpful to have had some really bad investing experience with conventional strategies.

As far as buying all of the PP assets, if you just accept that at least one will always be doing poorly, the way the portfolio behaves after you set it up will be less stressful.

The PP creates an entirely new pattern of thought for most investors.  It takes some time to hammer your brain into a new way of thinking about something as emotional and stressful as investing.

I may need a 12 step program to give up the old buy high,sell low investment program....

MG,

normally I don't understand your jokes.

Maybe because I'm from another continent

Sorry.

I have the same question. In fact with stocks, bonds, and gold all at near record highs, (and cash always stable)
which of the classes is doing poorly now?

TennPaGa wrote:

frugal wrote: MG,

normally I don't understand your jokes.

Maybe because I'm from another continent

Sorry.

He was playing on your referring to MediumTex as "Boss MT".  It was a reference to "Boss Hogg", a character from a late 1970's American TV show, the Dukes of Hazzard.

There are multiple levels of comedy and absurdity in comparing me to Boss Hogg.

My convertible Cadillac isn't even white (it's satin black) and I have mountain goat horns on the hood, as opposed to the more common bull horn hood ornamentation favored by those of Boss Hogg's ilk.

frugal wrote: Maybe because I'm from another continent

What continent and what country are you in?