Gyroscopic Investing

I know most people here aren't in finance career-wise, but has anyone figured why the PP seems completely untouched by financial professionals, even after the last decade of recessions, dollar devaluatioin, and LT bond returns?

I am both inclined to say, but avoid wanting to think, it's more or less trying to justify their profession by either 1) trying to time the market for their clients, or 2) investing their clients in funds that do just that?

And I'm not saying that people have to go all into the PP... just 10% LT Bonds and 10% gold in an otherwise stock portfolio can significantly reduce volatility and increase returns over time.  Why wouldn't financial professionals push this?  I have NEVER heard suggested more than a 5% gold allocation, much less any LT government bonds.  It's always a managed stock fund and a total bond fund.... maybe some foreign stocks and emerging markets for the "real" risk takers.

Amazing.  Please tell me it's more complicated than an entire industry falsly trying to justify their otherwise pointless and self-enriching careers.

I don't think it's so much a conspiracy, as it is a combination of things:

- "If all you have is a hammer, everything looks like a nail."  Financial professionals' life's work in creating and marketing financial instruments.  They are inclined to solve all new financial problems with professionally-crafted financial instruments.  Gold is an inanimate commodity and lies solidly outside that box.  This is similar to how most western-trained doctors never consider integrating traditional medicine approaches; they're outside their professional toolbox and never cross their mind.

- Analyzing asset classes in isolation, instead of whole portfolios.

- Recency bias regarding the prosperity and stability of the USA.

- Path of least resistance.  Slickly-marketed, mediocre investment products seem to have a higher profit margin than trying to outcompete Vanguard on price and volume.

I don't believe it's a conspiracy so much as a combination of all the factors Kevin mentioned.  You'd be hard-pressed to find a more honest, clear-eyed group of investors than the Bogleheads (apart from on this forum, natch!)  Yet consider how few Bogleheads like the Permanent Portfolio.

For example, take someone like Rick Ferri.  I am completely convinced that Rick is a thoroughly honest guy who really "gets it" about low-cost indexing and the impossibility of timing the market.  Yet once he starts talking about gold, you can tell that he barely understands it.  Then out comes the crystal ball and he starts market timing (very poorly so far, I might add.)  Gold has the ability to turn some of the most rock-ribbed Bogleheads into fortunetellers.

Kevin's reference to recency bias goes a long way toward explaining much of the investment world's allergy to gold.  It's my opinion that if you give gold its full historical consideration you'd have to be at least somewhat uneasy about ever constructing a portfolio that didn't contain hard assets.

You guys are probably right.  Anybody know if you need some kind of licensing or any legal liability considerations of doing non-management financial advising on the side?  I feel like I could add a ton of value by looking at someone's personal balance sheet and looking at where their exposure, opportunities and threats are, as well as tax considerations, because I'm a CPA.

Heck, at this point, even doing some non-profit financial advising for poor-middle class people would be a way for me to release some of my knowledge... I just always prefer making money if I can.