Post
by barrett » Fri Jun 15, 2018 3:17 pm
Yeah, I'd be curious to hear the back story as well. I don't really mind the griping though as I think we all have a mini budd sitting on our shoulder thinking about what could have been.
A few thoughts...
budd, you are familiar with the sunk cost fallacy, correct? Maybe you are just a Boglehead through and through and should just go to something like 60/40 and call it a day. It seems like that would ease your mind a bit and you haven't really lost all that much by holding 7.5% in gold. Sure, it might be a lot in dollars, but I would think relatively little in percentage terms.
One could even argue that at 7.5% you are at the very low end in terms of holding a slice of an asset that can really drive your portfolio forward when it is time for that asset to perform. Maybe ask yourself what the impact to your portfolio would be if gold were to, say, quadruple in price over a five or ten year period while stocks were struggling to keep up in real terms.
Gold is kind of supposed to perform like crap when stocks are on a tear as they have been for nine years now. But most of us around here are at least somewhat concerned about sequence of returns risk (having recently retired, with a decent nest egg but not a huge abundance, I know that I am). It sounds like you have amassed enough money that you could withstand a pretty extreme stock/bond downturn and still be OK. In my case, I just figure that with me being on the bubble with about 25X expenses (and hoping to live another 30-40 years), I'm likely to see gold do well, and carry my portfolio, another time or two in my lifetime. Of course I might have to wait another ten years for that to happen but I'll be OK with that as long as something in my asset mix is doing well.
I believe Machine Ghost once wrote something on here along the lines of "Stocks are the engine of the PP and everything else is just some kind of hedge." My own version is "How high of a stock allocation can I have before I start to worry about a stock market crash?" For me that number seems to be somewhere around a third. When I add everything up (LTTs, Cash Gold & Stocks) across all accounts, I look at my roughly 33/67 allocation as a conservative cash-heavy Boglehead portfolio with, hopefully, better inflation & deflation protection.
Again, just some thoughts.