Gyroscopic Investing

I wonder how PRPFX would have done in the 1972-1981 period.

Presumably, it would have done very well, since its design seems to be based around the economic conditions that were just ending as it was being rolled out--i.e., lots of inflation and a weak dollar.

In many ways, PRPFX shows that chasing returns is a bad idea.  It would be almost 30 years after its inception that the economic conditions it was designed for would re-appear (i.e., a bull market for gold and a sense that inflation was going to be a serious problem).

Are you suggesting that PRPFX is a poor investment during other economic conditions (non-inflationary)? I realize the fund has limited LTT exposure (10% EDV or 15% TLT corrects), but PRPFX has performed more than adequately over the previous 30 years.

No, I'm not suggesting that PRPFX hasn't been a good investment from a safety perspective since its inception, but it's been a LOT BETTER investment since gold started its current run around 2001.

It's just ironic that PRPFX was rolled out as a perfect anti-inflation tool at more or less the same moment in time that inflation was about to stop being a problem for the next two decades.

I'm just thinking that the backtest data for PRPFX that was used in its design probably showed the PRPFX mix performing very well in the 1970s.  As an example, I believe the Swiss franc tripled in value against the dollar in the 1970s.

Thanks MT, you had me worried for a moment...