OK, Boomer

Discussion of the Stock portion of the Permanent Portfolio

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mathjak107
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Re: OK, Boomer

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What could possibly go wrong Ha ha
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dualstow
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Re: OK, Boomer

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O0
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vnatale
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Re: OK, Boomer

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dualstow wrote: Thu Nov 14, 2019 8:04 am I would define winning the game as firmly believing that I have enough capital to easily live off my investments.
You might be technically, right, mathjak, as there is always the chance of unforeseen disasters. However, I would enjoy the present as long as it lasts.
That phrase of Bernstein's struck a chord within me, and I agree with your interpretation. The only major variable I see (for me) is IF there are some major medical advances that would NOT be covered by insurance or Medicare and. therefore, could only be obtained by those who directly pay for it. That is the Wild Card.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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ochotona
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Re: OK, Boomer

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To me, "if you've won the game stop playing" means don't be 70%-100% into equities when closer than 10 years to retirement, or in retirement. Take it back down to 40% Golden Butterfly, 30% Desert, 25% Permanent.

Boomers are anchored psychologically on the Reagan years. The returns have been good since 2009, so they've forgotten the equities disaster which was 2000-2009. They expect they won't get whacked again because they forever inhabit the nostalgic Golden 1980s realm of Magical Reaganism.

‘You've got to ask yourself one question. Do I feel lucky? Well, do ya, punk?’
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mathjak107
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Re: OK, Boomer

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Remember though ,Bernstein’s view changes with the weather

Last time I read his book he believed in annuities and fixed income to create a liability matching portfolio and only extra money above that level went in to risk assets ....so he may not mean just reducing equities....

Quite frankly I stopped heeding anything he said many years ago ....

The truth is I found I never won the game ..I just find a more comfortable level to keep playing.. I like our lifestyle, I like spending what we do and I like living where I do ..it takes a certain level of income and a certain amount of risk assets to sustain it with a high level of success rate
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Re: OK, Boomer

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ochotona wrote: Thu Nov 14, 2019 6:55 am Almost one-tenth of boomers were entirely in equities during the quarter, running the risk of serious losses in a market meltdown.
I'm guessing those are the ones who need to make risky investments because they hadn't saved enough and are now trying to catch up. If that's only 10% of boomers it doesn't sound so bad to me.
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mathjak107
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Re: OK, Boomer

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jacksonm2 wrote: Thu Nov 14, 2019 2:49 pm
ochotona wrote: Thu Nov 14, 2019 6:55 am Almost one-tenth of boomers were entirely in equities during the quarter, running the risk of serious losses in a market meltdown.
I'm guessing those are the ones who need to make risky investments because they hadn't saved enough and are now trying to catch up. If that's only 10% of boomers it doesn't sound so bad to me.
they may also have pensions that cover their living expenses and for all purposes the pay check never stopped ...I know a lot of retirees who have nice pensions and are investing for legacy money for heirs. Others don’t draw much off of their portfolios because of other income sources and they run 70% equities or higher and they can since it is not lived off of
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Re: OK, Boomer

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mathjak107 wrote: Thu Nov 14, 2019 3:02 pm
jacksonm2 wrote: Thu Nov 14, 2019 2:49 pm
ochotona wrote: Thu Nov 14, 2019 6:55 am Almost one-tenth of boomers were entirely in equities during the quarter, running the risk of serious losses in a market meltdown.
I'm guessing those are the ones who need to make risky investments because they hadn't saved enough and are now trying to catch up. If that's only 10% of boomers it doesn't sound so bad to me.
they may also have pensions that cover their living expenses and for all purposes the pay check never stopped ...I know a lot of retirees who have nice pensions and are investing for legacy money for heirs. Others don’t draw much off of their portfolios because of other income sources and they run 70% equities or higher and they can since it is not lived off of
Right. I always put this kind of story about how baby boomers are in dire straits approaching retirement in the category of "lies, damn lies, and statistics". I'm sure there are plenty who are dumber than dirt when it comes to investing and saving but probably no more than any other generation.
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Re: OK, Boomer

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mathjak107 wrote: Thu Nov 14, 2019 1:09 pm Remember though ,Bernstein’s view changes with the weather

Last time I read his book he believed in annuities and fixed income to create a liability matching portfolio and only extra money above that level went in to risk assets ....so he may not mean just reducing equities....

Quite frankly I stopped heeding anything he said many years ago ....

The truth is I found I never won the game ..I just find a more comfortable level to keep playing.. I like our lifestyle, I like spending what we do and I like living where I do ..it takes a certain level of income and a certain amount of risk assets to sustain it with a high level of success rate
I put William Bernstein up there with the all-time great investing writers. Definitely top 5. I was never struck with his changing views. Can you cite them?

And, if one has an established lifestyle with established expenses he is saying you have won the game if you are practically guaranteed to never outspend what you have provided you reduce your risk taking. What is the point of taking risks when the upside is getting yet more than you'll never need while the downside is ending up with not enough.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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I Shrugged
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Re: OK, Boomer

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If you have a good bit of wealth, it's hard to think of putting it into t-bills and easing onto some kind of glide path. The PP is good for this. It's still safe, but it grows over time. Why not grow it? Eventually charities and future Shruggeds might benefit.
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Re: OK, Boomer

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I Shrugged wrote: Thu Nov 14, 2019 8:06 pm If you have a good bit of wealth, it's hard to think of putting it into t-bills and easing onto some kind of glide path. The PP is good for this. It's still safe, but it grows over time. Why not grow it? Eventually charities and future Shruggeds might benefit.
I do think the Permanent Portfolio is not only an excellent portfolio for many different circumstances but, particularly, for after you have "won the game". You will not lose the game after you thought you'd won it and you will still achieve some growth.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: OK, Boomer

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we still don't know how conservative the pp will end up being going forward .

as i mentioned a few times , the last 40 years have only had rates falling except for what i call speed bumps along the way . i have been an investor for more than 30 years and rates as a trend have only fallen ... you could ski down the rate chart .

back in the 1970's investing was not what it is today with computer algorithms , we had no 401k's and most small investors were not investors at all . in fact our parents were great depression children and most hated the thought of investing as we know it . so any comparison to the 70's is really no comparison to today .

so rising rates as a trend may be the kryptonite to the pp today .

as you see now , those days all assets move together when rates spike , holy cow can the pp be volatile . with gold and treasuries having 1 and 2% rises and falls the pp may be a portfolio geared for low rate trends and actually more volatile then conventional mixes with greater sequence risk when things get to correlated and the trend eventually heads up again towards historical norms in the 5-6% range .

so the jury is still out on the pp in my opinion going forward as being a very conservative retirement portfolio , once rates reverse their 40 year trend as far as more or less conservative . it may actually be less conservative then a wellesley income .

so i just consider my pp when i use it , just another portfolio like i do my growth and income model as far as risk modeling in our retirement .. i don't consider it at this point any lower in risk or volatility then i do my growth and income portfolio

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I Shrugged
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Re: OK, Boomer

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I agree that it's not hard to construct scenarios where the PP doesn't hold up. But it affords more protection than many alternatives. I used to enjoy trying to invest actively. Then I realized that after taxes it really didn't beat passive investing. (I'm mostly taxable.) And the PP is the best passive scheme I can find.
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