How long have you invested in the PP?

[annieB]

For us new folks,can we get some product endorsements?
Just how long (years) you've followed the PP plan and have
your returns approximated the reported returns?Allowing
for the small differences in investment choices.
I'm hoping we haven't all started in the last year.

Maybe knowing this,we can ignore the small drawdowns that
you guys don't even seem to be aware of.Thanks..

[Early Cuyler]

For us new folks,can we get some product endorsements?
Just how long (years) you've followed the PP plan and have
your returns approximated the reported returns?Allowing
for the small differences in investment choices.
I'm hoping we haven't all started in the last year.

Maybe knowing this,we can ignore the small drawdowns that
you guys don't even seem to be aware of.Thanks..

I've been in the PP for about a year and a half now. If my math is correct, last year I hard a 3.5% real return. I'm happy with that because I assume 2% real for planning purposes. What the pp has really given me is peace of mind.

My formative investment experience was plunking 3k into vanguards vtsmx in early 2008. There is nothing more unnerving that seeing 40% of your hard earned money disappear in a matter of months.

Iirc my pp started out slowly too. But I remained calm and it let do it's thing. A year later I'm earning a good amount above inflation, this debt ceiling/fiscal cliff/whatever causes me literally zero stress and I'm mostly focused on other things.

My point is, just sit back and relax.

[ozzy]

1 year, and I'm pleased with the results so far.

[Gosso]

April 1, 2011.  I was feeling foolish that day. 

My CAGR is 7.5%.  Performing as expected.

[AgAuMoney]

Loosely since about 1999.

More rigorously but still not "strict" since 25 Feb 2011.  I did a 401(k) rollover so the money went in all at once and has had nothing added or removed since then (other than brokerage commissions obviously go out).  I decided to make that account my "real" Permanent Portfolio since it was an isolated account of about the proper percentage of my assets, instead of the loose coalition of assets I had been calling a PP before then.

My biggest Permanent Portfolio "violation" now is I have several individual dividend growth stocks in roughly equal amounts and a 2x that sized portion in VBK (small-cap growth).  I also currently have some silver instead of all gold by holding Central Fund of Canada (CEF) instead of IAU (or IAU and SLV).  With that said, my current allocations are 25.8% cash (FDIC insured and SHY), 25.9% gold&silver (CEF), 20.7% LT bonds (6.58% EDV and 14.08% TLT), and 27.6% stocks.

The account is up nominally 22.66% since 25 Feb 2011, for an 11.2% CAGR over the 1.92 years (aka 23 months).  I don't know "real" returns since I have no idea of my "real" inflation rate.  I do know that the account did significantly better in 2011 than in 2012.  In 2012 it was up over 10% at one time, but if I remember correctly it was up less than 8% at the end of 2012.

Oh, and the entire account currently has an expected forward yield on cost of 1.99%, and I do expect an increased payout from my stock holdings during 2013.

[MachineGhost]

For us new folks,can we get some product endorsements?
Just how long (years) you've followed the PP plan and have
your returns approximated the reported returns?Allowing
for the small differences in investment choices.
I'm hoping we haven't all started in the last year.

Since 2006.  Back then it was stocks and PRPFX until I sold PRPFX in 2007 for bonds as it was too commodity-heavy and would have crushed me in the recession.  I adopted the "strict" PP allocation in 2011, but it'll likely be years before I ever get up to a full 25%x4 allocation.

Technically, I did buy gold back around $250 in 2001 right after 09/11, but got scammed (a good thing in hindsight as I could have sent more good money after bad).  My hesitation to get back into gold has cost me, which is why I have to be a little more careful that most about incurring any future capital losses.

[Reub]

MG, what was the nature of the scam when you purchased gold after 9/11?

[annieB]

These answers are really helpful.I've spent years trying to "figure the market out".
Oh my, what an education.I stumbled onto the PP and it was like the bell rung.
I invested 38% of my funds in early January in the four standard ETFs.
My current thinking is I'll add to my accounts as my account grows....I'll
be playing with house money.Of course that thinking could change.

It is so liberating to no that I won't have to spend countless hours managing
this investment.Thank you Harry!

[annieB]

But I sure haven't hit the point where I'll check things once a week!

[Alanw]

About 2 years and am quite happy with the results.  I must admit that I can't quite go all in on the PP so I have a small VP.  Wanting to stay conservative and keep costs low, not wanting to play or time the markets and wanting to keep volatility low, my entire VP consists of VWINX.  This gives my total portfolio a slight stock/bond tilt and leaves cash and gold at about 20% each of total portfolio.  My PP however, is kept seperate for rebalance purposes.

[sophie]

Almost 3 years.  I started with PRPFX and then switched into the 4x25 PP last spring.  It's kind of a relief to have a pre-programmed map to follow.  Even the Boglehead world has too many uncertainties and leads to a lot of tinkering.

One thing to note about what people may regard as a Variable Portfolio.  Harry Browne defined the "core" portfolio as "money you can't afford to lose".  He went on to define investing as accepting the return the market gives everyone, and speculating as trying to beat the market.  The Permanent Portfolio is a good way to invest, but not the only way.  The Boglehead indexing philosophy falls squarely under Harry Browne's definition of investing.  The VP, on the other hand, is for things like buying stocks that you think will go up, investing in Lending Club, etc.  Play money, in other words, that you can afford to lose.

The nice thing about this is that I feel completely free to do whatever I want with my VP money, without concern about safety.  I've already decided that it's ok if I lose it, so I can go for the big gains without fear.

[MachineGhost]

MG, what was the nature of the scam when you purchased gold after 9/11?

Nothing anyone here needs to be concerned about.  It was an extra-legal setup, back when I was rabidly anti-government.

[rickb]

Two years and four months (September 2010).  After getting shellacked in 2008 (actually less than many folks), I searched far and wide for a "don't get fucked" portfolio and eventually stumbled onto the PP.  At the point I found the PP, I had plenty of gold (and silver), stocks, and cash and eased into LT treasuries over many months - turns out I would have been better off just biting the bullet and going 25/25/25/25 but hindsight is, as they say, 20/20.

I track monthly, and rolling 3-month, 6-month, and 12-month, returns of a theoretical 4x25 portfolio of SHY/GLD/TLT/VTI (rebalanced monthly, assuming no taxes and no fees) and of my actual "PP" and actual "VP" (which is now everything that simply doesn't fit as one of the PP assets).  My actual "PP" (not perfectly balanced but within 15/35 bands, and with a gold/silver mix rather than just gold) tracks the theoretical PP fairly well.  My "VP" (everything else, primarily energy-specific and gold/silver mining stocks), is pretty much simply a drag on my PP - it consistently underperforms.  I frequently think I should go 100% PP since it soundly beats my "VP" on a rolling 3-month (and 6-month or 12-month) basis.

[AgAuMoney]

My "VP" (everything else, primarily energy-specific and gold/silver mining stocks), is pretty much simply a drag on my PP - it consistently underperforms.

Those darn mining stocks...  They would have been a drag this past couple of years.  What am I saying!  They WERE a drag.    The only ones that have done any good for me were SLW and SAND.    Luckily I only have about 6 other positions worth in that sector.  (including GDX and GDXJ)  I keep thinking "their day will come."

[HB Reader]

I started loosely following the general PP strategy in the early 1980s, just after PRPFX came out and after reading HB's newsletter for a couple of years (I subscribed from 1980-1995).  I say "loosely" because HB's thinking on the matter really didn't evolve into the completely agnostic 4x25% approach until later in the 1980s.  I essentially used PRPFX as a core fund supplemented with some gold coins, Treasury bills and bonds, and aggressive stock funds.  I also say "loosely" because, although I always kept sizeable positions in the four core asset classes, I did let my stock component get well past where I should have rebalanced a few times and I didn't strictly segregate my PP accounts from my VP accounts like I should have until I retired in 2003 and became much more disciplined in my implementation of both the PP and my VP strategy.

The PP approach was a little difficult to stick with for several years in the late 1990s (it began to seem a little outdated, especially the gold part) when it seemed like everyone was getting rich in technology stocks.  But I think all asset allocation strategies are subject to doubts creeping in when the stock market is booming and your portfolio is only earning low to middle single digit returns.  I'm very glad I became more disciplined about it all in 2003.       

[AdamA]

The PP approach was a little difficult to stick with for several years in the late 1990s (it began to seem a little outdated, especially the gold part) when it seemed like everyone was getting rich in technology stocks.  But I think all asset allocation strategies are subject to doubts creeping in when the stock market is booming and your portfolio is only earning low to middle single digit returns.  I'm very glad I became more disciplined about it all in 2003.     

Seems like a good lesson for those of us who haven't had as much experience with the portfolio.  When people start saying it's outdated is probably the time it's most important to stick to it.

[annieB]

I started loosely following the general PP strategy in the early 1980s, just after PRPFX came out and after reading HB's newsletter for a couple of years (I subscribed from 1980-1995).  I say "loosely" because HB's thinking on the matter really didn't evolve into the completely agnostic 4x25% approach until later in the 1980s.  I essentially used PRPFX as a core fund supplemented with some gold coins, Treasury bills and bonds, and aggressive stock funds.  I also say "loosely" because, although I always kept sizeable positions in the four core asset classes, I did let my stock component get well past where I should have rebalanced a few times and I didn't strictly segregate my PP accounts from my VP accounts like I should have until I retired in 2003 and became much more disciplined in my implementation of both the PP and my VP strategy.

The PP approach was a little difficult to stick with for several years in the late 1990s (it began to seem a little outdated, especially the gold part) when it seemed like everyone was getting rich in technology stocks.  But I think all asset allocation strategies are subject to doubts creeping in when the stock market is booming and your portfolio is only earning low to middle single digit returns.  I'm very glad I became more disciplined about it all in 2003.     

Thanks for this history.

I live about five miles from where Harry lived(Franklin,Tennessee) and had never heard of him until last fall.
That's my loss as I enjoy his thinking on most everything.

[HB Reader]

     

Thanks for this history.

I live about five miles from where Harry lived(Franklin,Tennessee) and had never heard of him until last fall.
That's my loss as I enjoy his thinking on most everything.
[/quote]

I'm not sure any of these observations are particularly germane (or are anything more important than my personal recollections) to the PP, but I'll put them forward here ....
 
I think HB lived in Vancouver, Canada, when I first began reading his books in the early 1970's.  I think he may have found it provided some tax benefits and possibly some personal (i.e., romantic) advantages.  I recall at some point that he said he liked many of the characteristics of North American cities.  Sometime in the late 1970's he moved to Switzerland, but moved back to the US in the early-to-mid 1980's (again, my vague recollections from his newsletter writings) because he missed the general dynamism of the US and its consumer markets, as well as the cultural difficulty of reading news (very slowly) in German.  (FWIW - I love Switzerland and the wonderful Swiss people, but would also much rather live here.)  I'm not sure when he moved to Franklin County, Tennessee -- but I suspect it was for a combination of reasons - personal, financial (high living standards with low costs), and perhaps with an eye toward eventual political action (since it is centrally located in the US) in the Libertarian political party.

At about this time, I continued to find his writings, especially about investments, worth listening to but became a bit put off by his increasingly strident political writings (not that I completely disagreed with all of his views) since he had been so adamant about "dropping out" of political debates earlier in his publishing career.  Although I had generally followed his investment approach since the early 1970s, I sort of renewed and refocused my interest in his investment ideas in 2003.           

[Thomas Hoog]

Stock-invester since 1986. Discovered Bonds in the '90, Gold in 2002
Never heard of HB until 2005 and working on my portfolio in his direction. I'm still stock-heavy (50%) but have lived trough 3 major crashes and recovered all the time. I keep record of my performance since 2002 and it is 7 % average pro year (dividend & cost included, without tax and inflation). I started a VP since 2013. Most important lessons: patience & keep to your strategy (until you have found a better one) & don't think you know what will happen (I was always wrong).

[rocketdog]

As long as we're reminiscing about HB, I don't know if I ever mentioned it on this forum but I met HB back when he was running for president in 1996.  I didn't even know that he was an investment guy, all I knew was that I heard him on Larry Elder's talk radio show on KABC AM in Los Angeles, and I more or less agreed with his politics (I had only recently been introduced to Libertarian ideas).

When I heard he was attending a fund-raiser for his campaign, I took a half day off of work to go.  It was a relatively small gathering of maybe 100 supporters at a hotel conference room.  HB gave a short speech, as did a few others.  I bought 4 copies of "Why Government Doesn't Work" and had him sign all 4 of them while we chatted a bit about his radio appearances on Larry Elder's show.  I eventually gave away 3 of the copies to friends who I thought would be receptive to HB's message and kept the 4th for myself. 

I sure do wish I had gotten my photo taken with him, but at least I have the signed book and the memory of our brief chat.  I also wish I had known about his investing background and looked into the PP way before I did -- it might have saved me some pain over the past 20 years.