Gold as a diversifier - PP gets a mention

Discussion of the Gold portion of the Permanent Portfolio

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Cortopassi
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Re: Gold as a diversifier - PP gets a mention

Post by Cortopassi » Fri Dec 10, 2021 12:23 pm

mathjak107 wrote:
Fri Dec 10, 2021 12:06 pm
when it comes to something as important as my life savings i want a more active roll in things
And that is where I messed up in the past. I should have been hands off. ANY portfolio structure, 60/40, PP, 100% equities, etc would have done better than my active trading!
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Re: Gold as a diversifier - PP gets a mention

Post by barrett » Fri Dec 10, 2021 1:04 pm

Xan wrote:
Fri Dec 10, 2021 11:43 am
Mathjak,

He's not asking for your allocation NOW. He's asking what allocation you would recommend if you were to stick with one for a very long time. Would it be the same?
Right. Hence the imaginary gun to the head. The point is that I'm asking you to choose an all-weather portfolio that you can ignore for long periods. Just try to imagine that you don't find investing so fascinating. By the way, I am not picking on you.... just curious.
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Re: Gold as a diversifier - PP gets a mention

Post by mathjak107 » Fri Dec 10, 2021 1:48 pm

well my model is already posted ….

the core of that has already been in use since i got ready to retire in 2007 ..all i did is add the three inflation protection items and swap a lot of the short term treasuries for fidelity strategic real return since i think inflation will be with us for quite a while because wages will not roll back even if the supply chains get better.

wages will stay up , services will not have prices fall ..doctors , dentists ,lawyers ,etc are not dropping prices when supply chains get better .

so these higher costs are going to stay i am afraid.

the fact lumber falls does not mean carpenters will reduce their labor prices
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Re: Gold as a diversifier - PP gets a mention

Post by seajay » Sat Dec 11, 2021 2:19 am

barrett wrote:
Fri Dec 10, 2021 1:04 pm
Xan wrote:
Fri Dec 10, 2021 11:43 am
Mathjak,

He's not asking for your allocation NOW. He's asking what allocation you would recommend if you were to stick with one for a very long time. Would it be the same?
Right. Hence the imaginary gun to the head. The point is that I'm asking you to choose an all-weather portfolio that you can ignore for long periods. Just try to imagine that you don't find investing so fascinating. By the way, I am not picking on you.... just curious.
I'm not a great fan of lending to someone who can revise interest rates, direct inflation (print/spend money at the expense of devaluing all other notes in circulation), change the taxation rates (how much you'll actually receive) or change the rules. Accordingly I favor a S&P500 large cap, small cap value, gold equal initial three-way split, buy and hold, no rebalancing other than drawing SWR from whichever had the highest value at the time - but also reserving the option to rebalance gold -> stock if/when gold rose to relatively high % weighting. Often % gold will tend to decline, in some cases however % gold might rise substantially. Gold in effect provides early years sequence of returns risk cover that becomes less of a issue once well into the run (if stocks drop 33% after having gained 50% you're no worse off than at the start).

Click the 'Allocation Drift' tab in this link and try different start dates to get a feel for how that worked out historically.
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