OK, Boomer

Discussion of the Stock portion of the Permanent Portfolio

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Re: OK, Boomer

Post by mathjak107 » Fri Nov 15, 2019 3:05 am

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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Re: OK, Boomer

Post by I Shrugged » Fri Nov 15, 2019 8:14 pm

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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