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Permanent Portfolio Strategy
Posted: Mon Feb 11, 2013 8:47 am
by portart
I wrote Harry Browne before he died and paid him to rebalance my portfolio. This was in the days before ETF's. After receiving the spreadsheet, It was too much work and Harry was not up to helping me anymore so I decided to just get PPRFX. As you know my timing couldn't have been better as I made it through the financial storm with an average of just under 10% a year on my entire portfolio since 2004. Although the market has recovered, I still have it beat by two percentage points since that time without all the mental turmoil. Now things are changing as gold is dropping and stocks are looking to put in new highs. I am making around 5 to 6 percent over the last year and the could drop more if gold has a serious fall.
Its protecting what I have though which is good thing and I am 64, not wanting to risk losing to get more aggressive on stocks with all my money PRPFX. The thing to note is that in the history of the fund, it has never had a big losing year, 8.30% is the worst with the market dropped four times as much. It's tempting to try to read the future and get more aggressive on stocks, especially for my son who also is in PRPFX. Its hard to be disciplined but it always hurts more to lose money then miss gains.
Re: Permanent Portfolio Strategy
Posted: Mon Feb 11, 2013 2:10 pm
by melveyr
Good point. With the PP you don't have to worry about "fear" but you definitely have to worry about "greed" causing you to jump ship and do something reckless.
Re: Permanent Portfolio Strategy
Posted: Mon Feb 11, 2013 4:52 pm
by notsheigetz
portart wrote:
I wrote Harry Browne before he died and paid him to rebalance my portfolio. This was in the days before ETF's. After receiving the spreadsheet, It was too much work and Harry was not up to helping me anymore so I decided to just get PPRFX. As you know my timing couldn't have been better as I made it through the financial storm with an average of just under 10% a year on my entire portfolio since 2004. Although the market has recovered, I still have it beat by two percentage points since that time without all the mental turmoil. Now things are changing as gold is dropping and stocks are looking to put in new highs. I am making around 5 to 6 percent over the last year and the could drop more if gold has a serious fall.
Its protecting what I have though which is good thing and I am 64, not wanting to risk losing to get more aggressive on stocks with all my money PRPFX. The thing to note is that in the history of the fund, it has never had a big losing year, 8.30% is the worst with the market dropped four times as much. It's tempting to try to read the future and get more aggressive on stocks, especially for my son who also is in PRPFX. Its hard to be disciplined but it always hurts more to lose money then miss gains.
I'm also 64 in a few months and I wish I had been invested in PRPFX back when the SHTF in 2008. I don't know that I would be all that much better off in the long run but I would have at least avoided the painful experience of seeing the huge drop in my nest egg as I was nearing retirement.
I started out with PRPFX but I am now doing the DIY HB PP. One reason for that is because the HB PP did quite a bit better in the first year I started but also because I can't see forking over .71 percent of your portfolio in fees every year to implement such a simple concept. Doesn't sound like a lot but if I do the math assuming I live as long as my dad (who is still alive at age 94), 30 years * .71%of my portfolio is a LOT of money.
Re: Permanent Portfolio Strategy
Posted: Tue Feb 12, 2013 4:12 am
by MachineGhost
portart wrote:
I wrote Harry Browne before he died and paid him to rebalance my portfolio. This was in the days before ETF's. After receiving the spreadsheet, It was too much work and Harry was not up to helping me anymore so I decided to just get PPRFX. As you know my timing couldn't have been better as I made it through the financial storm with an average of just under 10% a year on my entire portfolio since 2004. Although the market has recovered, I still have it beat by two percentage points since that time without all the mental turmoil. Now things are changing as gold is dropping and stocks are looking to put in new highs. I am making around 5 to 6 percent over the last year and the could drop more if gold has a serious fall.
Its protecting what I have though which is good thing and I am 64, not wanting to risk losing to get more aggressive on stocks with all my money PRPFX. The thing to note is that in the history of the fund, it has never had a big losing year, 8.30% is the worst with the market dropped four times as much. It's tempting to try to read the future and get more aggressive on stocks, especially for my son who also is in PRPFX. Its hard to be disciplined but it always hurts more to lose money then miss gains.
You should consider buying 10% EDV to balance out the PRPFX, which is overweighted to commodities.