Gyroscopic Investing

Uncork the champagne!  According to peaktotrough.com, the PP started on January 1 1972 with 35/15 bands and reinvested dividends reached its all-time high (nominally) yesterday, surmounting the previous peak established on February 2 last year.  Hopefully, your portfolio is at its all-time high, too.  I know mine is, and it's a relief after the big plunge (almost 8%) last year.

(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Congratulations, PP!

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pet hog wrote:(The PP rebalanced annually on Jan 1 has about 1% to go to reach its all-time high, set on the same day last year.)

Interesting to hear that. It would be a lot simpler to just rebalance on Jan 1. And easier to not look at the portfolio too often.

My portfolio is not at its all-time high, but then it went up a lot faster than the PP until the end of 2012. 

I also just hit an all time high on nominal value, but I then calculated past years in constant prices and found that my all time real high was 2011. Boo. My portfolio is in pound sterling and was affected by some non-PP transactions, so your results may be different.

The key thing is that I'm in the drawdown phase, so I am working to stay constant in real value, not expecting massive gains.

Curious to hear if you guys are on real value all time highs, or just nominal.

Jake wrote: The key thing is that I'm in the drawdown phase

You sound really young in your podcasts. I thought you were in your twenties or early thirties.

dualstow wrote: You sound really young in your podcasts. I thought you were in your twenties or early thirties.

Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ

Jake wrote:

dualstow wrote: You sound really young in your podcasts. I thought you were in your twenties or early thirties.

Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ

Same age here, and he nailed it as he always does. So, so true.

Overweight in cash at the moment. Reluctant to re-balance into gold and treasuries.
Anyone else in the same position?

I'm in the midst of doing my backdoor Roth contribution for the year.  I'm going with the hold my nose and deploy equally among all four assets method.  The holding your nose part is the most important.

Jake wrote:

dualstow wrote: You sound really young in your podcasts. I thought you were in your twenties or early thirties.

Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ

Have you called into Stef's show? For some reason I'm thinking you did.

Oft-heard quote from a wise physician I know:

"No user-serviceable parts inside."

Jake wrote: Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ

LOL.

I'm finally approaching 40 and starting to appreciate the wear and tear.  I guess I should get any treatment in while I still can. 

I don't know if it's been said, but it's kinda crazy that so many of us were struggling with our faith in the pp so recently. I'm no exception.
It really satisfies over the long term if one can stick with it.

Looks like I'm up just under 4% YTD. 
I'll take it.

Gold crashes have to be the worst, because us PP'ers have to suffer through that alone.  It's been a tough few years but I'm pretty happy right now too!  Per etfreplay, the 25x4 PP is now up 6.2% YTD, compared to 0.9% for the S&P 500.

Joy!

I've been running a weird, unleveraged 2x PP for a couple of years and even though it performed as I predicted, last year was no fun at all.  But as of today, it made me smile.

45% LT US Treasuries.
35% Physical Gold
15% XIV
05% Cash.

I also keep a smaller true PP portfolio and it was encouraging to see them both come out of the doldrums at the same time.

I am going to study whether the "go to cash" down market phase for momentum portfolios should be replaced with "go to PP". Watch the VP area of the forum.

I've wondered whether there is any point to bothering with bond allocations in retirement accounts if you hold a comparable sized PP.  The purpose of bonds in stock/bond portfolios is to dampen the effect of stock market drops, by not going down as much as stocks, at the cost of reducing returns.  Getting fancy with emerging market bonds, TIPs, and even international stocks in the stock allocation may minimize the drop but won't give you the bump you need when the stock market goes down.  And, the PP may reduce returns by a bit but not as much as the bond allocation does.  Vanguard total bond has returned 4.55% annually over the past 10 years, and 6.19% since inception.

It's too bad gold isn't available in more retirement accounts.  For most of us, retirement savings dwarf everything else, because the benefits of deferring taxes are too good to miss out on.  I tried to prove to myself once that I'd be better off paying taxes now and then paying capital gains/dividend taxes later on the earnings, rather than paying ordinary income tax rates, but no matter how I stacked the deck it was always better to defer. 

sophie wrote: I've wondered whether there is any point to bothering with bond allocations in retirement accounts if you hold a comparable sized PP.  The purpose of bonds in stock/bond portfolios is to dampen the effect of stock market drops, by not going down as much as stocks, at the cost of reducing returns...And, the PP may reduce returns by a bit but not as much as the bond allocation does. 

How do you feel about munis in taxable? I think of them as a little extra diversification. They definitely drag the total return down, but I use the generous interest to help pay bills, and the duration is less scary than that of 30-YR treasuries. Vp of course.

Bend over and kiss your a$$ goodbye
Gold down 2.5% to 1215.

Just bought some CEF.

I'll take it.  We are still over 1200. 

Everything works opposite how I would have traded in the past. 

Oh, look, another terrorist attack.  I bet people want to go into safe havens.  Guess not. 
Oh look, another interest rate hike, I bet people want out of gold.  Guess not. 
Oh look, earnings are crap, the market should go down.  Guess not.

PP has kept me invested in things I would have bet my life on would have reacted completely differently given the situation.  If this is because things are manipulated, I suppose I can live with that now vs. gnashing my teeth because I made a wrong call.

YTD, gold +15%, TLT +5%, VTI, +0%.  (approx).  You had to figure gold had to take a breather at some point.

Just doing the change slowly.  I added about 3% more stocks right before the low in stocks whenever that was, late Jan or so, and have dropped cash to do that.  But not near the levels I want to be at.  I figure if I have it close by the end of the year I'll be good.

My targets, based off some 401k limitations are:

Total Market 15.0%
LT Bonds         25.0%
LgCap Blend 10.0%
EmMkt/IntlSmal7.5%
SmCapVal 7.5%
Cash 10.0%
Gold         25.0%

It must be the end of the month cause the pp is down