Peeking, and the Permanent Portfolio

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

User avatar
6 Iron
Executive Member
Executive Member
Posts: 339
Joined: Sun Apr 25, 2010 11:12 pm

Peeking, and the Permanent Portfolio

Post by 6 Iron » Wed Nov 17, 2010 6:31 pm

I shamefully admit to peeking at my portfolio returns (or lack thereof) daily, using Morningstar to give me the up to the second read out. It has been mentioned several times how damaging this can be from a psychological perspective, getting overwhelmed by the whip sawing and market noise of the volatile components. Therefore, last Sunday, I quit. Cold turkey. As I have a self managed brokerage account in my 401K, I have decided to check returns once a month, which is still more frequent than I need, but it is a start. I have to admit, the first day was the hardest, but after watching the portfolio for well over a year, this seems like the right thing for me.


Edited spelling error; hopefully my returns are not peaking.
Last edited by Guest on Thu Nov 18, 2010 10:26 pm, edited 1 time in total.
User avatar
Lone Wolf
Executive Member
Executive Member
Posts: 1416
Joined: Wed Aug 11, 2010 11:15 pm

Re: Peeking, and the Permanent Portfolio

Post by Lone Wolf » Wed Nov 17, 2010 9:56 pm

Time for me to come clean as well.  I totally do this.  It needs to stop!

Maybe this thread can turn into a sort of peeker's support group.  If I'm getting really bad cravings to check on my portfolio, I can come here and get advice on how to distract myself by chewing gum or stabbing myself in the forearm with an awl or whatever.

I'll go with a one "checkup" per month allowance.  I hereby commit to post in this thread if I slip up on that commitment, at which time everyone can freely berate me for being a weak little wannabe day-trader.
User avatar
6 Iron
Executive Member
Executive Member
Posts: 339
Joined: Sun Apr 25, 2010 11:12 pm

Re: Peeking, and the Permanent Portfolio

Post by 6 Iron » Wed Nov 17, 2010 11:12 pm

Lone Wolf wrote:
I'll go with a one "checkup" per month allowance.  I hereby commit to post in this thread if I slip up on that commitment, at which time everyone can freely berate me for being a weak little wannabe day-trader.
Sounds good. I also will use this thread, in lieu of a 12 step program.
MadMoneyMachine

Re: Peeking, and the Permanent Portfolio

Post by MadMoneyMachine » Thu Nov 18, 2010 8:00 am

I have a spreadsheet that updates in real-time, so I see actual percentage changes in my net worth by the minute.

And here is my excuse:

I am still not fully invested in the PP! I still have 35% cash position (down from 80% in March) and am trying to "time" the market by "buying the dips."

It has not worked. I could have told myself it would not work. I know better. The markets generally show a net monthly increase.

My portfolio is up 8% YTD [UPDATE:8.5%] (was 11% a week ago!) but if I would have gone "all-in" in Jan, it should be up 12% by now. Every asset class was "too expensive" back then to buy. They are all still too expensive. (In self-defense, my Standard Deviation was VERY LOW this year, up until last week, so at least I had that going for me.)

I am "convinced" that the very minute I go "all-in" it will signal the top of the market for all asset classes, the bottom will fall out, and I will get to see the largest max drawdown known to PP world.  :D  When I go all-in, I will tell you so that you can sell.

Yet, I'm thinking that once I get to 25/25/25/25 that I can stop looking at my spreadsheet. Maybe set some kind of alarm that tells me if I trip the 15/35% rule for rebalancing. (hahahaha keep dreaming! I know I will still look!)

Nonetheless, investing in the PP is a vast improvement over having to watch any other type of portfolio. Jeez, trying to pick stocks, do market timing, pick ETFs, etc., was PAINFUL.
Last edited by MadMoneyMachine on Thu Nov 18, 2010 8:32 am, edited 1 time in total.
rwc356
Junior Member
Junior Member
Posts: 12
Joined: Tue Oct 26, 2010 2:36 pm
Location: Indiana

Re: Peeking, and the Permanent Portfolio

Post by rwc356 » Thu Nov 18, 2010 8:11 am

I agree we shouldn't peek but given the "boring"  :) success of the PP, I need a little excitement each day so I peek - sometimes more than once... I will be DCA into a full PP over the next 6-8 months so I can rationalize the need to check-up on everything a little more often. Once I have everything in place then I will need a new story to justify my affliction.
User avatar
Storm
Executive Member
Executive Member
Posts: 1652
Joined: Tue Aug 24, 2010 1:04 pm

Re: Peeking, and the Permanent Portfolio

Post by Storm » Thu Nov 18, 2010 8:56 am

MadMoney, I think this is something that I struggled with as well as a new PP investor.  I didn't want to go all in because it's difficult to sell some asset classes when you think they are underpriced or buy some asset classes because you think they are overpriced.

In the end you only hurt yourself if you don't obtain the full exposure to PP across all asset classes at once.
"I came here for financial advice, but I've ended up with a bunch of shave soaps and apparently am about to start eating sardines.  Not that I'm complaining, of course." -ZedThou
jhigh

Re: Peeking, and the Permanent Portfolio

Post by jhigh » Thu Nov 18, 2010 5:12 pm

Ditto for me...still have a large cash position as well...about 35% actually :D.  I keep telling myself that I should just bite bullet abd go all-in but I guess if you're going to "ease in" to the permanant portfolio, you could do a lot worse than easing in from cash.
User avatar
craigr
Administrator
Administrator
Posts: 2544
Joined: Sun Apr 25, 2010 9:26 pm

Re: Peeking, and the Permanent Portfolio

Post by craigr » Thu Nov 18, 2010 5:16 pm

The longer I'm in the Permanent Portfolio the less I check the balances. You'd think I'd check more running the blog/forum, but I don't. The main reason I log into my accounts is to make sure no fraudulent activity is going on and not to check performance. The reason I don't post more frequent YTD numbers on the blog is my way of saying "don't check too often." ;)

If you research behavioral finance there are very valid reasons to check less frequently. Research "loss aversion" for some insights.
User avatar
6 Iron
Executive Member
Executive Member
Posts: 339
Joined: Sun Apr 25, 2010 11:12 pm

Re: Peeking, and the Permanent Portfolio

Post by 6 Iron » Mon Nov 22, 2010 8:51 pm

I am now one week in to the once a  month peek. In the past, I have updated my spreadsheet for all of my accounts sometime during the weekend. This weekend, I managed to avoid getting in touch with my inner Scrooge McDuck. I have picked up bits and pieces through the week about assets going up or down, and I would be lying if I said that I was cured of my desire "to check". Still, every now and then, I have a sense of the peace that was HB's goal with our portfolio.
User avatar
Lone Wolf
Executive Member
Executive Member
Posts: 1416
Joined: Wed Aug 11, 2010 11:15 pm

Re: Peeking, and the Permanent Portfolio

Post by Lone Wolf » Wed Nov 24, 2010 11:59 am

6 Iron wrote: Still, every now and then, I have a sense of the peace that was HB's goal with our portfolio.
Yes, exactly.  It's easy to forget how much time, energy and intellectual effort man expends trying to find comfort, security, and shelter in his life.  The PP is a chance to satisfy these basic human yearnings in your investment life.  What could be more valuable?

The less I look, the less I worry about it.  I recall someone (MT?) talking about eventually a day coming where you go for days at a time without thinking about your Permanent Portfolio.  I must admit, I am not there yet!
Last edited by Lone Wolf on Wed Nov 24, 2010 3:35 pm, edited 1 time in total.
User avatar
l82start
Global Moderator
Global Moderator
Posts: 2525
Joined: Sun Apr 25, 2010 9:51 pm

Re: Peeking, and the Permanent Portfolio

Post by l82start » Wed Nov 24, 2010 3:13 pm

if you are holding the 25% TSM index or s+p 500 and especially if you the have a small part of that 25% in total international index, your pp should have as much diversification into peking as you need ;)
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.”

Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
User avatar
6 Iron
Executive Member
Executive Member
Posts: 339
Joined: Sun Apr 25, 2010 11:12 pm

Re: Peeking, and the Permanent Portfolio

Post by 6 Iron » Wed Dec 08, 2010 9:03 pm

Today (the day after TLT pays its interest), is the day I chose for my monthly check and spreadsheet update. I am down about a half a percent since I last checked for all assets. I gave myself carte blanche for the entire day; and what did I do? As things were down in the morning, I checked a couple of more times during the day (and wanted to check more). I am clearly still a work in progress, but next month, I will only check after the close. Or maybe buy a shock collar.

Looking at the charts on Morningstar, there was a fair bit of unenjoyable volatility this past month amongst the asset classes. This was a good month to begin my investor improvement project. 
Post Reply