Gyroscopic Investing

A lot of people were nervous about or disappointed in the pp for the past year and a half or more. I don't blame them one bit. Gold was tanking, treasuries were down from 2012 highs, and the stock market was soaring. Why did I get into this mess? they must've thought. I was also thinking how great it would've been if I had ridden my stock-heavy portfolio through the early "tens" (2010s).

I feel bad for disciplined savers like catacomb who gave up on the pp because of gold's dismal years. In retrospect, the pp wasn't down that long. It was a buying opportunity.

We often talk about how everyone hates treasury bonds even though they've been doing so well. You know how if some pimply scientist invented a vaccine that saved half the world, he would still get less attention on a stage than Bradley Cooper playing a scientist who saved half the world? It's a clumsy analogy, but I feel like bonds have done so much for my portfolio and I still fear buying more.

Conversely, when I first got into the pp and bought my first gold (because of the pp), I was excited watching it go up. It reinforced the idea that I had done the right thing transitioning from bogleheads to the pp. I was happy to buy more.

Maybe it's just because there is no maximum value for gold, while with bonds we ignore negative yields and think about some final point, zero, where the yield is going to stop moving down and there is no more profit to be made, only losses to be exposed to.

It's kind of funny watching both our inflation protection and deflation protection rise together these days.

Whatever the hell's going on, the pp is peforming nicely. I'm glad I found it.

If gold goes back down, I'll be excited to buy more of it, and more of the whole scary package.

Good post, I feel the same way. I started mine only last year, my bonds and gold have shot up quite a bit.
The only problem now with all PP  sectors in the positive is deploying new funds and feeling like I'm "buying high", but that's the beauty of this model, tossing it toward whatever is the lowest allocation.

Now that the euphoria has kicked in, time for a correction in one of these sectors so I can get a better deal!

c'mon

Mike59 wrote:
The only problem now with all PP  sectors in the positive is deploying new funds and feeling like I'm "buying high",
..
Now that the euphoria has kicked in, time for a correction in one of these sectors so I can get a better deal!

It's crazy, isn't it?  When the entire package goes up but one asset is down, it's completely normal and natural, but we fret about the lagging asset and beat up on it. If only we had invested more in the winning asset!

And when all the assets are on fire and the pp soars, we sense it can't last, are reluctant to buy more pp assets and perhaps fear a crash!

dualstow wrote: It's crazy, isn't it?  When the entire package goes up but one asset is down, it's completely normal and natural, but we fret about the lagging asset and beat up on it. If only we had invested more in the winning asset!

And when all the assets are on fire and the pp soars, we sense it can't last, are reluctant to buy more pp assets and perhaps fear a crash!

I am reminded of my father watching any sporting event where every possible outcome was negative! "Why is the pitcher so wild?" (He's not, he's just trying to get the batter to swing at something out of the strike zone). "Good Lord! He swung and missed that by a foot!" (Yes, because he was guessing fastball and it was a big-ass curve). And so on. Nothing ever made him happy except turning off the damn game.

Hilarious!

If the HBPP keeps up this pace, we better increase the bandwidth to this forum because we'll have a lot of new people coming by excited for this great new portfolio!

TripleB wrote: If the HBPP keeps up this pace, we better increase the bandwidth to this forum because we'll have a lot of new people coming by excited for this great new portfolio!

TripleB wrote: If the HBPP keeps up this pace, we better increase the bandwidth to this forum because we'll have a lot of new people coming by excited for this great new portfolio!

Yes, this is true. But the influx of new PP converts would be followed, shortly thereafter, by the hasty exodus of these same folks when the PP briefly offers returns lower than alternative portfolios. Such an outcome was predicted in Bill Bernstein's classic review of the PP strategy:

http://www.efficientfrontier.com/ef/0adhoc/harry.htm

True PPers know that, to reap the long-term harvest, we need to stick with the program, despite short-term losses. Overall, Bernstein's analysis of the PP is quite positive.