I have a short term gain/loss of -$2,252

[Demp]

Hello,

I am new to investing in the Permanent Portfolio but have done a lot of research on it beforehand and really liked what I saw and read.  I especially liked the simple, safe and stable investing of this portfolio.  I have only began investing in September 2012 and since then I have always had a negative in my short term gain/loss.  I currently have a negative $2,252 short gain loss.  I realize that I have to wait the storm and keep this in for the long haul, but just starting in the investment allocation and loosing this amount makes me a bit nervous.  I have put in a fairly large amount of cash into this portfolio since 09/2012 and my investments are as follows: 
12.5% in VTI: (VANGUARD TOTAL STK MKT ETF)
12.5% in VXUS: (VANGUARD TOTAL INTL STK ETF)
25% in SHV: (ISHARES BARCLAYS SHORT treasury)
25% in TLT: (ISHARE BARLCYS 20+ YR TREAS INDEX FUND)
25% in SGOL: (ETFS GOLD TR SHS)

I know I have my investments correctly from my research but is this normal to have a loss from September 2012 - today February 17 2013?  Thank you for any input and I just need reassuring that this is ok and it will soon bounce to a gain in the market.     

[Demp]

Sorry, I just realized I posted this in the wrong section.

[craigr]

These things are always time dependent. The last few months have been very good for stocks and not that great for gold and bonds. The next six months it could shift the other way. But over time I have found the portfolio tends to edge upwards.

I personally am an "all in" kind of guy. This is simply because the probabilities long-term work out in the favor of the person who starts earlier vs. the one that trickles things in. Plus, it helps emotionally because you are not second-guessing your decision each month with new money.

But I understand the concern and we've all been there with our investments. It's the kind of thing were we know *now* after the fact what would have been the best asset to choose the past few months (stocks). But months back was the crystal ball so clear? Probably no. And six months into the future it will look obvious again, but do we know today what will happen? No.

So I understand how you feel, but I think the bigger picture really is to look at the assets in total and realize that some go up and some go down and this is just the nature of things. But over time the losing assets tend to settle into a certain window where they just don't seem to decline any further, but the winners seem to go up and eventually overtake the losses.

[melveyr]

Also keep in mind that the PP isn't risk free and it has lost money intra year many times. It usually makes it back up before the end of the calendar year, but not always. However, the same can be said of any strategy that is not 100% T-Bills and even that has unique real risks. I would spend more time exploring the intrayear performance of the PP to better understand its level of risk. It isn't doing anything that it hasn't done in the past.

[Pointedstick]

I second what others have said. It isn't really that much different from going all into any portfolio with multiple assets only to see one take off and the other(s) drop like a rock. It's not a risk unique to the PP, but the PP rebalancing bands eventually compel you to harvest those gains and buy the loser that's stinking up the place, which, while it seems counter-intuitive, is usually the best thing to do.

[Demp]

Thank you guys, appreciate the replies..  My Perm. Portfolio is in a non-retirement fund.  I have extra cash to put in monthly and I won't touch this cash for a good 10 - 15 years.  Do you suggest to keep plugging it into the PP each month?  I realize that no portfolio is risk proof, but for a non-retirement account I have not seen or read about one that is "more" safe than the PP. 

[frugal]

Like me you began in a PEAK 

It's also not easy for me ... I look to the PP every day probably 6 times.

I also have ETF's because it is more simple and less expensive, but not so safe.

[MediumTex]

Like me you began in a PEAK 

It's also not easy for me ... I look to the PP every day probably 6 times.

I also have ETF's because it is more simple and less expensive, but not so safe.

Looking at any portfolio multiple times a day is never going to lead to anything good for 99% of investors.

Humans are really good at many things, but watching a pot in anticipation of future boiling is rarely one of them.

[Bean]

Create a VP that you can focus on, it has saved me from my worst investing enemy...me.

Also, you could start a coin collection.  The PP portfolio doesn't have silver, I think it should, but I am going to follow the rules.  So, I started a silver coin collection as a hobby, lol.  It has nothing to do with my investing activities, or at least that is what I am currently telling myself. 

[MomTo2Boys]

I have only began investing in September 2012 and since then I have always had a negative in my short term gain/loss.  I currently have a negative $2,252 short gain loss.  I realize that I have to wait the storm and keep this in for the long haul, but just starting in the investment allocation and loosing this amount makes me a bit nervous.  I have put in a fairly large amount of cash into this portfolio since 09/2012...

I know I have my investments correctly from my research but is this normal to have a loss from September 2012 - today February 17 2013?  Thank you for any input and I just need reassuring that this is ok and it will soon bounce to a gain in the market.   

Dude, I am **so** right there with you. In fact, can I just say that I started at the exact same time as you (I started on Sept 11th, 2012) and I'm actually down a little more than you are! I'm down a touch over $3,000, though I think one difference may be that I have DCA'd (dollar cost averaged) in over September, October, and November. Oh, yeah - seeing that -$3,000 sucks bad.

I don't look very often and I'm keeping the faith (and I'm busy with a zillion other things each day) but UGH. I actually started a thread about my various UGH feelings a couple of months ago (I think it's called "I'm sorry you guys, I think I broke the PP" or something). People keep saying it's normal, etc., so it's normal. What am I going to do? Sell? And do what? There's nothing else I believe in as much as this. So I'm staying put with my negative balance and that's just the way it is right now. But yeah, you're not the only one.

Hope that makes you feel better!! Misery loves company, right? 

And actually, if my holdings were up, I think I'd be feeling bad but in another way. I've held back investing some money because my family's life is sort of upside-down right now (think it will get more cemented soon, though) and I've been thinking it's possible we may need the cash, but if the PP was UP (rather than down) I think I would be having regrets that I didn't just shovel it all in there when I had the chance, LOL.  We can't win with this investing stuff, can we? LOL! Oh, well...

[MomTo2Boys]

So here's the thread I started in November when everything had been down for me for two months:

http://gyroscopicinvesting.com/forum/ht ... ic.php?t=4

Hope I stuck that link in here the right way.

ANYHOO, like I said, I started that thread after just two months of everything being down. Now it's been five months. And I'm just gonna be patient and hang in there like I'm supposed to be/do.

[frugal]

Like me you began in a PEAK 

It's also not easy for me ... I look to the PP every day probably 6 times.

I also have ETF's because it is more simple and less expensive, but not so safe.

Looking at any portfolio multiple times a day is never going to lead to anything good for 99% of investors.

Humans are really good at many things, but watching a pot in anticipation of future boiling is rarely one of them.

Boss,

I invested a lot in PP, that's not easy to close the eyes and forget.

Create a VP that you can focus on, it has saved me from my worst investing enemy...me.

Also, you could start a coin collection.  The PP portfolio doesn't have silver, I think it should, but I am going to follow the rules.  So, I started a silver coin collection as a hobby, lol.  It has nothing to do with my investing activities, or at least that is what I am currently telling myself. 

Hi,
which kind of silver coins? Can you give me examples?




tks

[MediumTex]

Like me you began in a PEAK 

It's also not easy for me ... I look to the PP every day probably 6 times.

I also have ETF's because it is more simple and less expensive, but not so safe.

Looking at any portfolio multiple times a day is never going to lead to anything good for 99% of investors.

Humans are really good at many things, but watching a pot in anticipation of future boiling is rarely one of them.

Boss,

I invested a lot in PP, that's not easy to close the eyes and forget.

Yes, it is easy to do.

It is only the belief that by watching you will be able to somehow get a better result that makes you keep watching. 

Once you fully internalize the concept that nothing good comes from watching your portfolio, you will naturally lose interest in watching.  After you stop watching your mind will become interested in other things and eventually you will check in on your portfolio a few times a year just to make sure that everything is in order.  This is what PP investors should strive for--a truly stress free investing experience.

I understand, though, that watching it frantically is part of what happens when you first get started.

[Bean]

Create a VP that you can focus on, it has saved me from my worst investing enemy...me.

Also, you could start a coin collection.  The PP portfolio doesn't have silver, I think it should, but I am going to follow the rules.  So, I started a silver coin collection as a hobby, lol.  It has nothing to do with my investing activities, or at least that is what I am currently telling myself. 

Hi,
which kind of silver coins? Can you give me examples?




tks

http://www.coinflation.com/unitedstates/

[frugal]

Looking at any portfolio multiple times a day is never going to lead to anything good for 99% of investors.

Humans are really good at many things, but watching a pot in anticipation of future boiling is rarely one of them.

Boss,

I invested a lot in PP, that's not easy to close the eyes and forget.

Yes, it is easy to do.

It is only the belief that by watching you will be able to somehow get a better result that makes you keep watching. 

Once you fully internalize the concept that nothing good comes from watching your portfolio, you will naturally lose interest in watching.  After you stop watching your mind will become interested in other things and eventually you will check in on your portfolio a few times a year just to make sure that everything is in order.  This is what PP investors should strive for--a truly stress free investing experience.

I understand, though, that watching it frantically is part of what happens when you first get started.

Great words to help me, i will try

Tks Boss.





Bean, i am out of US...

[Ariadne22]

Gold is taking quite a beating right now.  I started my PP on 6/1/2012 and still am up 2.9% -  VTI carrying the entire portfolio.  But, even VTI dropped 1.33% today.  For a long while, GTU showed a huge gain.  First TLT and then GTU carried the portfolio nicely through some very choppy days last year. 

If you watch regularly, it's hard not to push the button when an asset class shows a huge gain.  Today, of course, I'm remembering GTU last year and wondering if I should have done just that.  But, asset classes were not even close to rebalancing bands, so I did nothing.  Also, wondered many times, if I shouldn't have sold Treasuries when they were break even because, clearly, they had no place to go but down.  Didn't do that either.    So, what had been an annualized return of 8.4% is now more in the area of 4%.  I expect gold will reverse fairly soon - it's just the traders having fun right now with their short selling.  So, I'm staying put.  This is money I don't need.  Being disciplined.

[portart]

PP has outperformed over the last ten years.  You knew at some point the S/P would get back to where it was years ago and wasn't going to down forever. So it caught up and gold sold off. Thats the cycle were in. However gold moves down more dramatically and faster then stocks, usually that is, so yes, you are going to have issues showing gains in this environment. But your 25% in gold so you only losing a percentage of a percentage, not the whole portfolio lowing your exposure to any major catastrophy which could easily be on the horizon as stocks move into nosebleed territory. They are still printing dollars, bullish for gold and you could see another massive upleg in gold, the lower it goes, the more powerful the snapback.  It hurts less to miss profits then it does to lose 40% of your life savings so this is the smart place to be. Like Harry says, the number one rule in investing is don't lose money. Make your money earning it with your skills and buy in at different prices as you keep the balance growing and stable over time. The PP has a lifetime average of 9% before expenses and taxes. Far better then being in cash or risking your mental health in stocks.

[craigr]

The longer you don't touch anything, the longer the gains have a chance to compound. Selling down stocks before their bands reduces collected dividends and capital gains. Selling down bonds before their bands reduces interest income compounding. Selling down gold before the bands can reduce capital gains. Selling out of assets early can hurt the bottom line as often as it helps.

It's very easy to look back and do hindsight analysis. In fact, I give myself a 100% probability that I could have made the right calls what to do six months ago with the information I have today. However we just don't know what the next 6, 12 or longer time will do. It's just a seriously bad idea to get into this market timing stuff. It doesn't work. It has never worked. And it's not going to work any better going into the future. Humans tend to remember their good calls but always forget the bad ones. It's like de ja vu moments where you think about a friend of yours and the phone rings with them on the other line. Surely it's a psychic connection, right? No, it's not. Because you probably thought of that person many other times in the past but they never called. You just didn't remember it.

Market timing is the same way. You look back at the good calls and think there is a magic touch at hand. But people really never keep track of their bad calls and how much it hurt them.

My experience continues to be that doing nothing until a rebalancing band is hit is often the most profitable strategy with investing in general and the Permanent Portfolio in particular. Slow and steady is the winning long-term strategy.

[Reub]

Craigr, your words are like the voice of reason in a sea of chaos and panic. Thanks to you, also MT, and, of course, Mr. Browne.

[Bean]

A high volume forum appears to be the worst enemy of a low trade volume portfolio

[frugal]

Craigr, your words are like the voice of reason in a sea of chaos and panic. Thanks to you, also MT, and, of course, Mr. Browne.

+1


I don't want to see my portfolio numbers today!

Jesus might be low low... 

[MediumTex]

PP has outperformed over the last ten years. 

Let's check that one out.

Using Craig's excellent PP performance chart, we see that over the last 40 years, the PP has provided an annual average return of 9.7%.

When I tighten up the time frame to the last ten years to check the claim above, I get an average annual return of 9.42%.

In other words, the PP has not outperformed over the last ten years.  It has done about the same thing that it has been doing for the last 40 years.

[Demp]

I have a non-retirement account set up with the PP.  Even in these times when I am experiencing a loss with the PP, and I have extra cash each month to invest, do you recommend still investing each month in the PP?  I realize it is the long run and sticking to it that counts but in times like these it makes it difficult. 

[MediumTex]

I have a non-retirement account set up with the PP.  Even in these times when I am experiencing a loss with the PP, and I have extra cash each month to invest, do you recommend still investing each month in the PP?  I realize it is the long run and sticking to it that counts but in times like these it makes it difficult.

Wouldn't times when the portfolio is down be the best times to add more money to it?

That's true of any strategy, not just the PP.

To me, what you are asking is sort of like saying: "They've marked down the price of beef, produce, toilet paper and gasoline.  Do you think I should go stock up on those items or just wait for the price to go back up before buying anything?"

Note that no one here is making any investment recommendations.  Each person has to figure out for himself what is right for him, but I would say that if you have decided that the PP is the right strategy for you, why wouldn't you be happy with the opportunity to buy the four PP assets at favorable prices?

[Pointedstick]

When investing, we are so often our own worst enemies.