Gyroscopic Investing

I am not retired, but found the comparison interesting.

http://www.retireearlyhomepage.com/reallife13.html

Excellent post! Those charts are a pretty strong endorsement of the HBPP.

The most surprising thing about that chart for me was the performance of Harry Dent. With his failed predictions of stock market crashes and the next great depression I've always thought of him as a purveyor of doom porn. He does seem to be getting better press lately and with a chart like that I can see why. Maybe there is something to be said for believing the next great depression is just around the corner and acting accordingly.

Also interesting was the performance of Larry Swedroe who I recall was a past visitor on the forum. Pretty much the opposite of my Harry Dent impression.

I'd hate to burst anyone's bubble, but there is something funky with the charts in the linked website.  There is no way the PP outperformed a 60/40 between 1995-2000.  My data shows the PP had a real CAGR of 7%, while the 60/40 had a real CAGR of 17%, between Jan 1995 and Dec 1999.

I looked quickly at the data in the excel spreadsheet and saw they had a 28% gain for "precious metals" in 1998, when gold only returned 0.5%.  It seems they used a mining fund, which is a PP no-no.  For example in 2008 the miners fell -56%, while gold returned +4%.

I also found an error in the Harry Browne portfolio calculations (the annual rebalancing were using the Harry Dent numbers), and once I corrected it the "PP" ended with a value of roughly $240,00, which was similar to the 60/40.

Gosso wrote: I looked quickly at the data in the excel spreadsheet and saw they had a 28% gain for "precious metals" in 1998, when gold only returned 0.5%.  It seems they used a mining fund, which is a PP no-no.  For example in 2008 the miners fell -56%, while gold returned +4%.

Right - they used Vanguard index funds wherever possible.  In the case of the HBPP they used VFINX (S&P 500 fund), VMMXX (money market), VUSTX (long term treasuries), and VGPMX (precious metals and mining).  VGPMX has no more than 20% in physical bullion and at least 80% in stocks of companies "principally engaged in the exploration, mining, development, fabrication, processing, marketing, or distribution of metals or minerals".

Is this HBPP?  Well, it's 3/4 correct.

This is what my data shows between 1995 and 2014:

[img width=400]http://i57.tinypic.com/2d9ojmo.jpg[/img]
Click to enlarge