Gyroscopic Investing

Long time reader, first time poster.  I am wondering what this community's thoughts are on leveraging the PP or its variants discussed here?  Part of the "draw" of the PP is low volatility.  Of course, the simplest "leverage" would be to simply omit cash (= 33/33/33).  Brief analysis suggests a slightly higher CAGR for this latter portfolio (CAGR approx. 1% higher than 25x4) since 1975, of course with significantly increased volatility and drawdowns.

On a semi-related note, has anyone used futures in constructing their PP?  Say you had $1M to invest.  Why not use a couple ES contracts and then make up the rest with SPY or whatever to create a synthetic 250K equity basket.  Could do the same for the gold and treasury components.  I realize of course there is a "built in" interest cost, which is at present relatively minimal.

Looking forward to any thoughts!

Off the top of my head, tax considerations would be one issue. Futures are taxed 60% long term/40% short term no matter what. PP holders typically wouldn't sell assets unless they breach a 35/15 rebalance which would rarely result in a short term capital gain. Others probably rebalance annually.

I hadn't thought of that.  I actually live in Canada and invest via a (somewhat) tax sheltered vehicle. The futures approach would require rolling the contracts over at regular intervals, triggering tax events where applicable.

check this thread:

http://gyroscopicinvesting.com/forum/va ... nterested/

Gold mine.  Thanks!