Stocks: fighting the pull of recency/past performance

Discussion of the Stock portion of the Permanent Portfolio

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Fred
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Re: Stocks: fighting the pull of recency/past performance

Post by Fred » Mon Dec 28, 2015 10:10 am

Reub wrote: Looking at these great charts, can someone make a good case for the PP vs. The Golden Butterfly Portfolio?
I asked the same question in the general discussion forum and didn't hear any good case against the GB. When I recently hit a re-balance point with gold < 15% I felt more comfortable bringing it back to 20% than 25% so I decided to go with the GB for now.

One thing I like about this portfolio is that I think it's a little easier to handle when you're still working and contributing to a 401k as most of these plans are heavy on stocks. When I retire and have complete control in an IRA I may work back into the PP.

And like I said in the other discussion, if it makes you feel disloyal to the HB philosophy you can always tell yourself that half of your stock allocation is your VP and that problem is solved.

One thing that wasn't so easy was trying to split the stock allocation into a 50-50 Large Blend, Small Value combo within a 401k. Adds another level of complexity to it. My wife's 401k actually offered those exact options with Vanguard funds but mine didn't so I just had to make the best of it. Looking at the charts, I wonder how much it actually matters.

Also, I wonder what would be the re-balancing bands are with this portfolio.
fi50@fi2023
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Re: Stocks: fighting the pull of recency/past performance

Post by fi50@fi2023 » Mon Dec 28, 2015 12:07 pm

Technically the Merriman portfolio is all stocks, with the investor to choose how much bond exposure to add based upon risk tolerance.

He does have an article that suggests a smaller portfolio 4 fund and U.S. Only. I use his Vanguard taxable recommendation for my 25% stock allocation.
Dieter
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Re: Stocks: fighting the pull of recency/past performance

Post by Dieter » Mon Dec 28, 2015 12:52 pm

Fred wrote:
Reub wrote: Looking at these great charts, can someone make a good case for the PP vs. The Golden Butterfly Portfolio?
..... <snip>......
One thing that wasn't so easy was trying to split the stock allocation into a 50-50 Large Blend, Small Value combo within a 401k. Adds another level of complexity to it. My wife's 401k actually offered those exact options with Vanguard funds but mine didn't so I just had to make the best of it. Looking at the charts, I wonder how much it actually matters.

Also, I wonder what would be the re-balancing bands are with this portfolio.
In the long run there is expected size and value premium, so only get part of it. Long run might be very long, and expected <> guaranteed. Aka, seems fine to me. Can check it out at portfolio harts yourself....

If start with the PP 40% rebalance bands.
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