Gyroscopic Investing

It's finally here and I'm surprised MG hasn't jumped on the opportunity to say "I told you so".

How do those that have less than the suggested gold allocation feel about the only asset that is currently offsetting losses? A couple of days like this and I will be 25x4 without needing to rebalance in taxable.

Well when you look at last couple of days in isolation, sure, it'd be nice to have more gold. Heck, I wish I was 100% gold for this week. But as far as I can see, stocks and bonds are both still near all-time highs and gold is still in the dumper. A week or three of offsetting losses isn't going to change the reality that gold has been a drag for years.

This just brings us back to where stocks and bonds were about 1 or 2 weeks ago. Seems like there has been a lot of stock volatility in recent weeks.

What iwealth said.

Maybe gold is just taking a break from going down. And maybe that going down period will turn out to be taking a break from its journey to 2000. But, stocks and bonds have done smashingly well.

I will be "all in" when gold is $850. Not a moment sooner. If it even goes below $1000, I will be "more in". Right now, I'm at 11%. Rest evenly divided cash, stocks, bonds. Is that speculating? I carry a gun, is that speculating?

iwealth wrote: Well when you look at last couple of days in isolation, sure, it'd be nice to have more gold. Heck, I wish I was 100% gold for this week. But as far as I can see, stocks and bonds are both still near all-time highs and gold is still in the dumper. A week or three of offsetting losses isn't going to change the reality that gold has been a drag for years.

Isn't that the point? We want gold to offset losses in the other assets. When stocks and bonds are near there all time highs, now is precisely the time to ensure that you gold allocation is within "your" established tolerance bands.

ochotona wrote: I will be "all in" when gold is $850. Not a moment sooner. If it even goes below $1000, I will be "more in". Right now, I'm at 11%. Rest evenly divided cash, stocks, bonds. Is that speculating? I carry a gun, is that speculating?

It's market timing. Good luck.

buddtholomew wrote:

iwealth wrote: Well when you look at last couple of days in isolation, sure, it'd be nice to have more gold. Heck, I wish I was 100% gold for this week. But as far as I can see, stocks and bonds are both still near all-time highs and gold is still in the dumper. A week or three of offsetting losses isn't going to change the reality that gold has been a drag for years.

Isn't that the point? We want gold to offset losses in the other assets. When stocks and bonds are near there all time highs, now is precisely the time to ensure that you gold allocation is within "your" established tolerance bands.

Sure, over the past 8 trading days or so, gold has done well to offset losses in the other assets. But I don't think we can sincerely say that's been the case for a good long while now. I can recall countless times gold has fallen with stocks and/or bonds, and then continued to fall when those two resumed their rises. But no, that hasn't been the case in the past few days. And it may or may not continue going forward.

You asked how those who hold less than 25% gold feel about watching it offset the other losses of late. My answer is that for years now, even if you average the last few days in, holding less than 25% gold has had quite a marked positive effect on my portfolio. I guess if I took to heart the last few day to day results I'd be pondering adding more.

ochotona wrote: I will be "all in" when gold is $850. Not a moment sooner. If it even goes below $1000, I will be "more in". Right now, I'm at 11%. Rest evenly divided cash, stocks, bonds. Is that speculating? I carry a gun, is that speculating?

What it is is a poor analogy. But, I am certainly sympathetic to those who don't find 25% in gold appealing. It's a big part of the reason I keep a vp.

buddtholomew wrote: It's finally here and I'm surprised MG hasn't jumped on the opportunity to say "I told you so".

How do those that have less than the suggested gold allocation feel about the only asset that is currently offsetting losses? A couple of days like this and I will be 25x4 without needing to rebalance in taxable.

I target 10% gold and currently have <5% when I checked a few weeks ago.  I should probably rebalance I suppose but haven't got around to it.

To answer the question of how do I feel:  I have to say I feel great.  I had a delicious beef pate last night (along with a few other dishes) and the company of a good friend who was in town.

You should really be 100% cash or be paying off debt or something, probably both.  All of this worrying is very unhealthy and counterproductive.

buddtholomew wrote: It's finally here and I'm surprised MG hasn't jumped on the opportunity to say "I told you so".

A couple of days is hardly what I had in mind, if I'm correct in assuming what you're referring to.  We won't see any real action until at/after 2015.75 anyway.  This is all noise in the meantime.

MangoMan wrote: Coincidence that the Chinese payment system you reference in another thread will go live around that time?

You are very wise, my Chief!

hoost wrote:

buddtholomew wrote: It's finally here and I'm surprised MG hasn't jumped on the opportunity to say "I told you so".

How do those that have less than the suggested gold allocation feel about the only asset that is currently offsetting losses? A couple of days like this and I will be 25x4 without needing to rebalance in taxable.

I target 10% gold and currently have <5% when I checked a few weeks ago.  I should probably rebalance I suppose but haven't got around to it.

To answer the question of how do I feel:  I have to say I feel great.  I had a delicious beef pate last night (along with a few other dishes) and the company of a good friend who was in town.

You should really be 100% cash or be paying off debt or something, probably both.  All of this worrying is very unhealthy and counterproductive.

5% is hardly a PP, 10% is acceptable as I too only hold 1/10 of my portfolio in gold.

I'm not worried much anymore...truly, I am comfortable with my allocation.

5% is hardly a PP, 10% is acceptable as I too only hold 1/10 of my portfolio in gold.

10% is acceptable according to you, but is definitely not a PP.  You either have a PP or you don't...

If you have less than 25% physical gold, this is going to happen to you on this Forum.

babysquirrel wrote: 5% is hardly a PP, 10% is acceptable as I too only hold 1/10 of my portfolio in gold.

10% is acceptable according to you, but is definitely not a PP.  You either have a PP or you don't...

No no, this:

I don't hold 25% Gold, but do call it more PP-influenced.

So long as you have at least 7% gold you are protected from inflation cash-wise, but not necessarily stocks and bonds.

babysquirrel wrote: (quoting Buddtholomew)5% is hardly a PP, 10% is acceptable as I too only hold 1/10 of my portfolio in gold.(end quote)

10% is acceptable according to you, but is definitely not a PP.  You either have a PP or you don't...

That reminds me something I read or heard about a masturbation survey. Not a joke, probably Dr Dean Edell. He said that people were asked both how often they masturbate and how often was too much. Of course the answers varied, but the one thing that was consistent was that "excessive" was always a higher frequency than one's personal habit.

dualstow wrote:

babysquirrel wrote: (quoting Buddtholomew)5% is hardly a PP, 10% is acceptable as I too only hold 1/10 of my portfolio in gold.(end quote)

10% is acceptable according to you, but is definitely not a PP.  You either have a PP or you don't...

That reminds me something I read or heard about a masturbation survey. Not a joke, probably Dr Dean Edell. He said that people were asked both how often they masturbate and how often was too much. Of course the answers varied, but the one thing that was consistent was that "excessive" was always a higher frequency than one's personal habit.

Sounds like when everyone thinks they are an above-average driver.

For the noobs or those with short term memory problems, I personally hold a 4x25 PP in taxable and combined with BH inspired 401K's equate to a 50/40/10 equities/fixed income/gold portfolio. I choose not to mess with the HB formula and only purchase gold in a VP to maintain the 10% allocation.

Either you are a PP purist or you are an investor that holds <25% in gold to diversify equity and fixed income investments. I am both

buddtholomew wrote: For the noobs or those with short term memory problems, I personally hold a 4x25 PP in taxable and combined with 401K's inspired by BH a 50/40/10 equities/fixed income/gold portfolio. I choose not to mess with the HB formula and only purchase gold in a VP to maintain the 10% allocation.

Either you are a PP purist or you are an investor that holds <25% in gold to diversify equity and fixed income investments. I am both 

[joke] Both Bogleheads (10% gold in your BH portfolio?!?!) and PP purists (25/25/25/25 overall or bust) scoff at your assertion [/joke]

But seriously, money is money, who cares where it's held except for tax optimization and retirement planning. The PP is designed for a particular function, and any deviation from that design changes that functionality for better or worse. As long as you hold some combination of stocks, bonds, cash, and gold, everyone who adheres to their rules and doesn't do anything willy-nilly will likely end up in the same ballpark.

I just hope it's in Dodger stadium and not in that dump where the A's play where the toilets overflow every time it rains.

1NV35T0R (Greg) wrote: Sounds like when everyone thinks they are an above-average driver.

But the way to identify the truly above-average driver is the one that is humble about his driving and masturbation.  Ego == arrogance.  And now you know why I think 99% of all people are full of shit and not worth listening to.

buddtholomew wrote: For the noobs or those with short term memory problems, I personally hold a 4x25 PP in taxable and combined with 401K's inspired by BH a 50/40/10 equities/fixed income/gold portfolio. I choose not to mess with the HB formula and only purchase gold in a VP to maintain the 10% allocation.

Either you are a PP purist or you are an investor that holds <25% in gold to diversify equity and fixed income investments. I am both 

Actually, the distinction between the PP and VP is artificial in this case.  You really own 75% equities, 65% bonds, 35% gold and 25% cash divided by the ratio of the size of the VP to the PP.  When HB spoke about a VP, he's really talking about shits n' giggles for the dumb money to have a harmless outlet, not a sensible but half-baked PP that Boglehead represents.

iwealth wrote:

buddtholomew wrote: For the noobs or those with short term memory problems, I personally hold a 4x25 PP in taxable and combined with 401K's inspired by BH a 50/40/10 equities/fixed income/gold portfolio. I choose not to mess with the HB formula and only purchase gold in a VP to maintain the 10% allocation.

Either you are a PP purist or you are an investor that holds <25% in gold to diversify equity and fixed income investments. I am both 

[joke] Both Bogleheads (10% gold in your BH portfolio?!?!) and PP purists (25/25/25/25 overall or bust) scoff at your assertion [/joke]

But seriously, money is money, who cares where it's held except for tax optimization and retirement planning. The PP is designed for a particular function, and any deviation from that design changes that functionality for better or worse. As long as you hold some combination of stocks, bonds, cash, and gold, everyone who adheres to their rules and doesn't do anything willy-nilly will likely end up in the same ballpark.

I just hope it's in Dodger stadium and not in that dump where the A's play where the toilets overflow every time it rains.

At least I tried to explain...remarkable how people choose not to read and just take the conversation wherever they choose. BH does not includ gold, but when the portfolio is looked at in totality there is a 10% allocation to precious metals. Funds in taxable and tax-deferred have different investment horizons. Get it????