Gyroscopic Investing

I just read the consensus on which has a correction first - gold or treasuries. I'm looking at Foliofn's precious metals "ready-to-go" folio with lustful thoughts. Do most of you feel the consensus on gold applies here also?

I don't understand your question exactly.

Gold may go up, or it may go down.  The permanent portfolio investor doesn't care, and normally views the concept of "consensus" as an interesting sound that the herd makes shortly before it stampedes off the edge of the cliff.

MediumTex wrote:[V]iews the concept of "consensus" as an interesting sound that the herd makes shortly before it stampedes off the edge of the cliff.

Love it!

Well ... being a PP veteran investor of two weeks, I still need to break out of the "day trading" mentality. And I am afraid of cliffs!

LesWurse wrote: Well ... being a PP veteran investor of two weeks, I still need to break out of the "day trading" mentality. And I am afraid of cliffs!

Try to tune out the market noise.

If you are comfortable with the overall permanent portfolio strategy, just buy the package and sit back and watch it work.

You will be surprised at the assets that will do well and those that won't, but the overall package will provide you with the protection that you are presumably looking for.

The permanent portfolio is a different animal from most investment strategies.  Although it is actually quite conservative, it often scares people off because they view it as risky because it holds volatile assets.

LesWurse wrote:I still need to break out of the "day trading" mentality.

Here's a little trick to help wean you off that mentality.

Instead of watching the exact value of your portfolio bob up and down each day — which is pointless for a long term investment — just bookmark the following image URL on your desktop or mobile phone:

http://www.google.com/finance/chart?cht ... hy&tlf=12h

It's an up-to-the-minute chart that looks like this (Gold is Yellow, Stocks are Red, LT Bonds are Blue, Cash is Green):



In a way it's sort of like watching the drizzling raw code of the matrix.

It will give you the satisfaction and appreciation of seeing the PP "work" in real time without the obsessive compulsive need to count each and every penny in your portfolio.

Over time you'll see that the chart looks the same just about every day. One asset tanks, another asset rises. Go to sleep, repeat, etc. You'll soon discover that you won't need to check the bookmark as often. And you'll be able to go longer and longer without checking it (since it pretty much looks the same every single day). There are no cliffs to fall off — things are always going up and down constantly.

I like that bookmark because it allows me to glance at the asset once in a while without having to see the exact value of my portfolio. So, I can go weeks without knowing my long term PP performance, but I can still check that the assets are responding on any given day if I'm curious.

Thank you all, (especially Gumby for the daily charting tip) - all security blankets are welcome during the weaning period.  MY PP has already lost $76.00 and I'm not even sweating! (Yet)

LesWurse wrote:MY PP has already lost $76.00 and I'm not even sweating! (Yet)

Yes, well keep in mind that the PP was designed preserve and grow money, in real terms, over at least an 18-month period. So, you should at least be prepared for some minor short-term losses in the meantime. HB recommended forgetting about it and checking it once a quarter or once a year. The PP is an autopilot for your money so that you'll be able to focus on more important things — such as living life and building your career.

If Time=Money you should already be up way more than $76!

The first couple of weeks are the hardest - these are the weeks where you might have short term losses, especially if you're watching your portfolio every day, that might scare you a bit.  After a few months you're going to see the gains are already pretty solidly locked in.

Storm wrote: The first couple of weeks are the hardest - these are the weeks where you might have short term losses, especially if you're watching your portfolio every day, that might scare you a bit.  After a few months you're going to see the gains are already pretty solidly locked in.

+1

The longer you are in it, the more your comfort level and confidence will grow.

When you are first starting out, your own fears and uncertainties magnify every little tick of the market.  There is also that voice in your head that says nothing this crazy sounding could actually work.