Gyroscopic Investing

Year todate I have the PP down 6%.

SHY flat,TLT down 11%,and gold(IAU) down 27%.

Neat how it all works together.

Who knows when this bleeding stops.

I started my PP in January and I knew the risk of buying into an extended rally.

Only regret is not finding the concept years ago.

Down 6% in 6 months? I don't see what the problem is. 6 months is far too short a time period to judge the performance of an investment portfolio, especially a newly-adopted one. If your time horizon is that short, you need to be in bank savings accounts, T-bills, CDs, and I-bonds.

Congrats on staying the course annieB. That's all I can say at this point.

Pointedstick wrote: Down 6% in 6 months? I don't see what the problem is. 6 months is far too short a time period to judge the performance of an investment portfolio, especially a newly-adopted one. If your time horizon is that short, you need to be in bank savings accounts, T-bills, CDs, and I-bonds.

Did you take annieB's post as sarcastic in some way? It seems you're trying to defend the Permanent Portfolio against an affirmative compliment.

Ha!
---------

Hang in there, Annie. It's only been a few months.

This thread has broken my sarcasm detector.

Xan wrote: This thread has broken my sarcasm detector.

Heh, mine too... I think?

annieB wrote: Year todate I have the PP down 6%.

SHY flat,TLT down 11%,and gold(IAU) down 27%.

Neat how it all works together.

Who knows when this bleeding stops.

I started my PP in January and I knew the risk of buying into an extended rally.

Only regret is not finding the concept years ago.

It seems there are a few of us who just bought into the Permanent Portfolio.  I also implemented the PP in January of this year and, actually, I feel really great about it now, despite the -6% or so that I'm down.  Honestly, I'm not even really calculating the exact numbers.  I'm not in this strategy for the next 6 months or even 6 years.  I'm in it for the rest of my life.  I'm on a time horizon of 50-80 years.

Back in 2008/09, I (incorrectly) believed the stock market was going to tank even more than it did.  I shorted SPY (a very large position relative to my investable assets) in December 2008 and held that position until November 2010.  I don't think I have to point out to anyone that I lost my shirt on that trade.  Well, it didn't wipe me out, but I did lose about 1/3 of what I "invested."  I hate the fact that I lost that much money, but it taught me a very valuable lesson.  It taught me that no matter how much I believe something just has to happen, it doesn't mean that it will.  Even if what I believe will happen does happen, I could be way off in the timing.  So I have to get two things right: the effect as well as the timing.  "The markets can stay irrational longer than you can stay solvent" is something I think about every time I think back on that experience.

Funny thing is, I still believe stocks are overvalued relative to the economic fundamentals.  But I went all-in on the PP anyway in January.  Buying all those shares of VTI was kind of like taking that God-awful cough syrup my mother would give me when I was a kid.  But then a funny thing happened; stocks went up!  It's nice to see that I'm still wrong when trying to outguess the markets.

In the early days when I implemented the PP, I was checking my balances every day.  As I watched the PP tread water at first and then go down, I was thinking, "Hey, didn't Harry say that this was for money I could not afford to lose?"  But then I noticed a chart of the last 40 years of PP performance and saw that there were some significant drawdowns in there.  So, at first when I noticed my portfolio balance declining, I was angry and anxious.  Then, I started checking my balances a little less frequently, maybe every 3 days or so.  Then, if I saw my balance a little lower, I was annoyed.  Now I'm checking my balance once a week or so, and I'm only mildly concerned.  In fact, if I wasn't in the accumulation phase, I probably wouldn't even bother checking it at all.  I would probably just check it every year on my birthday.

I have no idea what the future holds.  There's so much uncertainty out there, both politically and economically.  As far as I can tell, Harry Browne's PP is the only strategy that is built around economic conditions, vice a backtest of which asset classes did well in the past.  I can sleep easy at night knowing that I've got all the bases covered.  The PP is now solely my method for safeguarding my wealth, not a way for me to get rich.  So, instead of wasting my time checking my PP value, I'm focusing on learning more skills and researching ways that I can add more value to the world.  Adding more value to the world is the way I intend to get rich, not by the PP alone.  And this is something that is completely and totally under my control.  Nobody has to give me permission to serve others.

I hope this helps others on the forum to put things in perspective.

Wonderful post, Aught. There's so much gold in there, but this part in particular is something that I think a lot of us could learn from right now:

Aught_1 wrote: I hate the fact that I lost that much money, but it taught me a very valuable lesson.  It taught me that no matter how much I believe something just has to happen, it doesn't mean that it will.  Even if what I believe will happen does happen, I could be way off in the timing.  So I have to get two things right: the effect as well as the timing.  "The markets can stay irrational longer than you can stay solvent" is something I think about every time I think back on that experience.

annieB and Aught_1

me too!

Will you be confortable adding more fresh money to your PP to offset the lost ?

I was wondering how to use my saved money to invest in myself but I don't know how


Thank you for your comments.

[quote="Pointedstick"]
Down 6% in 6 months? I don't see what the problem is. 6 months is far too short a time period to judge the performance of an investment portfolio, especially a newly-adopted one. If your time horizon is that short, you need to be in bank savings accounts, T-bills, CDs, and I-bonds.
[
PS:

Did you fail to read my positive comments or is English a second language for you?/quote]

annieB wrote:

Pointedstick wrote: Down 6% in 6 months? I don't see what the problem is. 6 months is far too short a time period to judge the performance of an investment portfolio, especially a newly-adopted one. If your time horizon is that short, you need to be in bank savings accounts, T-bills, CDs, and I-bonds.

PS:

Did you fail to read my positive comments or is English a second language for you?

I think that we have an initial misunderstanding nevertheless sparking a strong discussion.

I'm so confused. I thought for sure AnnieB was being sarcastic.
I thought Khisanth was keeping the joke going, being facetious.
Now, with your latest post, Annie, I'm at a loss. And English is my first language.

frugal wrote: annieB and Aught_1

...Will you be confortable adding more fresh money to your PP to offset the lost ?

I was wondering how to use my saved money to invest in myself but I don't know how
.......

I absolutely will be adding more money to the PP.  Actually, I've been adding more all year, despite the drawdown.  In a way, I'm delighted that gold has dropped so much this year.  I am leaving for Hong Kong on Saturday, and from what I've read HK is the cheapest place in the world to buy gold.  I plan on picking up a few Chinese Gold Panda 1 oz. coins while I'm there    They're a heckuva lot cheaper now than they were 6 months ago.

I was looking at the performance of Vanguard's Total Bond Market fund and even it's down 3.5% this year.  That is essentially what I was invested in since September 2008 before I set up the Permanent Portfolio.  So the fact that my PP is down about only 6% YTD, after gold dropping 25% or so, gives me a warm and fuzzy feeling.

For those who are freaking out right now about the viability of the PP, just about any balanced portfolio will be struggling right now.  As for me, I kind of feel like Lieutenant Dan in Forrest Gump.  Remember the scene where he's on top of the mast on the shrimp boat in the middle of the storm, all full of piss and vinegar?  I really feel like that right now, because I am pretty darn confident this investing strategy is the best one out there, and it's only a matter of time before it picks up again.  In the meantime, I'm buying assets on the cheap!

dualstow wrote: I'm so confused. I thought for sure AnnieB was being sarcastic.
I thought Khisanth was keeping the joke going, being facetious.
Now, with your latest post, Annie, I'm at a loss. And English is my first language.

Now I don't know what I meant to say.
No harm,no foul...

annieB wrote:

dualstow wrote: I'm so confused. I thought for sure AnnieB was being sarcastic.
I thought Khisanth was keeping the joke going, being facetious.
Now, with your latest post, Annie, I'm at a loss. And English is my first language.

Now I don't know what I meant to say.
No harm,no foul...

Were you being sarcastic or serious?  It doesn't matter, I'm just curious.

MediumTex wrote: Were you being sarcastic or serious?  It doesn't matter, I'm just curious.

I'm pretty sure he's was being either seriously sarcastic or sarcastically serious.

(I know...sorry).

<sarcasm>Please punctuate your sarcasm appropriately, people!</sarcasm>

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Oh no.
I wish we were making big gains for the year but I understand
how the portfolio works.I'm a long term investor.
A serious long term investor...

annieB wrote: Oh no.
I wish we were making big gains for the year but I understand
how the portfolio works.I'm a long term investor.
A serious long term investor...

So you weren't being sarcastic in the OP?

Please check one:

_____ Yes, I was being sarcastic

_____ No, I wasn't being sarcastic

MediumTex wrote:

annieB wrote: Oh no.
I wish we were making big gains for the year but I understand
how the portfolio works.I'm a long term investor.
A serious long term investor...

So you weren't being sarcastic in the OP?

Please check one:

_____ Yes, I was being sarcastic

_____ No, I wasn't being sarcastic

Please check one:

_____ Yes, I was being sarcastic

_____ No, I wasn't being sarcastic

__X__ Yes, one of the options above

LOL, Greg.

Well, I think I finally cracked this. Annie is a sleeper AQ agent, giving the thumbs up sign to show that she is ready for action.
Gumby's seemingly innocuous sarcastises also look like an electrical symbol. I think he's telling Annie to target the nearest power station. The rest of us on the forum are just pawns or bystanders. I feel so violated.

annieB wrote: I can hear everything you guys are thinkin....

Any chance you would complete the short questionnaire above?

This is interesting. I suspect this thread may be more revealing of our personalities than we expect.

annieB wrote: Year todate I have the PP down 6%.

SHY flat,TLT down 11%,and gold(IAU) down 27%.

Neat how it all works together.

Who knows when this bleeding stops.

I started my PP in January and I knew the risk of buying into an extended rally.

Only regret is not finding the concept years ago.

I assumed the last part, "Only regret is not finding the concept years ago" was serious (not sarcastic).