Gyroscopic Investing

Currently, I'm:

20% VTI
20% IAU (no physical)
20% TLT/ZROZ (50/50)
20% CASH (ALLIANT; TUZ; STPZ)
20% Dry powder waiting for a good entry point into VXUS.

So, I'm 80%PP/20% VP

Maestro G

Time for an update?

It seems that almost all original responders to this topic are no longer active here.

I was impressed, though, with how many of them were fairly close to 25/ 25 / 25/ 25.

Vinny

yankees60 wrote: ↑Sun Jan 05, 2020 9:10 pm Time for an update?

It seems that almost all original responders to this topic are no longer active here.

I was impressed, though, with how many of them were fairly close to 25/ 25 / 25/ 25.

Vinny

Basically pure PP but “internationalized”!

As per sig.

About 65% in PP

PP is
20% S&P 500
20% SCV
20% LTT
20% STT
15% Gold in IAU
5% in a stable value fund

50/50 VP/PP

PP allocation has been pretty stable, been letting VTI ride:
VTI: 33.5%
TLT: 23.5%
IAU: 23.5%
cash: 19.5%

VP is heavily into tech

Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

Smith1776 wrote: ↑Tue Jan 07, 2020 1:49 pm Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

What about Treasury bonds?

Tortoise wrote: ↑Tue Jan 07, 2020 3:37 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 1:49 pm Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

What about Treasury bonds?

Er, what about them?

Smith1776 wrote: ↑Tue Jan 07, 2020 3:39 pm

Tortoise wrote: ↑Tue Jan 07, 2020 3:37 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 1:49 pm Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

What about Treasury bonds?

Er, what about them?

PP requires Treasuries (they make up 50% of the portfolio). Vanguard stock/bond mix funds typically include mainly non-Treasury bonds, no?

Tortoise wrote: ↑Tue Jan 07, 2020 3:43 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 3:39 pm

Tortoise wrote: ↑Tue Jan 07, 2020 3:37 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 1:49 pm Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

What about Treasury bonds?

Er, what about them?

PP requires Treasuries (they make up 50% of the portfolio). Vanguard stock/bond mix funds typically include mainly non-Treasury bonds, no?

Ooooh I see what you're saying. Yeah, my PP has some credit risk as a result. Definitely a valid criticism.

I take solace in the international diversification of my portfolio's bond component as a kind of partial compensation. It's basically a trade off I've been willing to make in order to have the simplicity of two funds.

Smith1776 wrote: ↑Tue Jan 07, 2020 3:47 pm

Tortoise wrote: ↑Tue Jan 07, 2020 3:43 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 3:39 pm

Tortoise wrote: ↑Tue Jan 07, 2020 3:37 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 1:49 pm Is anyone else on the forum doing the the two fund route when implementing the PP?

A simple Vanguard stock/bond fund plus a gold fund?

What about Treasury bonds?

Er, what about them?

PP requires Treasuries (they make up 50% of the portfolio). Vanguard stock/bond mix funds typically include mainly non-Treasury bonds, no?

Ooooh I see what you're saying. Yeah, my PP has some credit risk as a result. Definitely a valid criticism.

I take solace in the international diversification of my portfolio's bond component as a kind of partial compensation. It's basically a trade off I've been willing to make in order to have the simplicity of two funds.

Well I must admit I have been thinking about following the two fund route. Primarily for international diversification since Australia is such a small portion of the worlds economy. Perhaps your approach may be a option for non-US PP investors?

https://api.vanguard.com/rs/gre/gls/1.3 ... s/11892/au

Hal wrote: ↑Tue Jan 07, 2020 4:19 pm
Well I must admit I have been thinking about following the two fund route. Primarily for international diversification since Australia is such a small portion of the worlds economy. Perhaps your approach may be a option for non-US PP investors?

https://api.vanguard.com/rs/gre/gls/1.3 ... s/11892/au

VDCO does indeed seem to be very similar to the fund I'm using in Canada, which is VCNS. VDCO is 70/30 while VCNS is 60/40. Pretty close though.

I find it interesting how the Australian documentation uses rather different vocabulary. The fund allocations are referred to as income assets and growth assets instead of bonds and stocks.

I do think the two fund PP is a great option for non-US investors in particular. Non-US investors need international diversification more than our US counterparts, so it makes sense to try and simplify for us with these all-in-one Vanguard solutions.

I'm smitten with the idea of simplicity overall. The two fund PP reminds me of how Steve Wozniak designed the first Apple computers. The original proposed designs were prohibitively expensive because they used way too many chips. The cost was through the roof. Woz would find a chip that did the work of three other chips. Then another one that did the work of these two other parts. Eventually he shrunk it down so that it was economical.

Smith1776 wrote: ↑Tue Jan 07, 2020 4:33 pm
VDCO does indeed seem to be very similar to the fund I'm using in Canada, which is VCNS. VDCO is 70/30 while VCNS is 60/40. Pretty close though.

Thanks Smith1776,

Both Vanguard funds are listed as "Conservative" and you are correct - close enough.

On digging a bit further, the VDCO bond allocation consists of approximately 50% local and international treasuries - I can live with that.

Your approach is especially interesting for a self managed retirement fund. In Australia you must have a professional auditors report submitted to the tax department annually - the simpler the holdings, the less the auditors fees, not to mention the documentation.

I think you have just convinced me to make the change

Hal

Hal wrote: ↑Tue Jan 07, 2020 8:31 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 4:33 pm
VDCO does indeed seem to be very similar to the fund I'm using in Canada, which is VCNS. VDCO is 70/30 while VCNS is 60/40. Pretty close though.

Thanks Smith1776,

Both Vanguard funds are listed as "Conservative" and you are correct - close enough.

On digging a bit further, the VDCO bond allocation consists of approximately 50% local and international treasuries - I can live with that.

Your approach is especially interesting for a self managed retirement fund. In Australia you must have a professional auditors report submitted to the tax department annually - the simpler the holdings, the less the auditors fees, not to mention the documentation.

I think you have just convinced me to make the change

Hal

Yay! We can start a two fund movement! Ha ha.

I didn't know that about Australian tax law. Very interesting.

One cool thing about these all-in-one funds is the scale and efficiency we can gain. The funds can be rebalanced using new cash flows from other investors. This allows for more transactional and tax efficiency in regards to rebalancing events compared to holding a bunch of separate funds.

I love the idea of a balanced fund, and I might own one if I didn’t know about the pp. I might go all into one if I’m still alive at 80.
However, 3 funds + gold is not terribly complicated.

dualstow wrote: ↑Tue Jan 07, 2020 10:10 pm I love the idea of a balanced fund, and I might own one if I didn’t know about the pp. I might go all into one if I’m still alive at 80.
However, 3 funds + gold is not terribly complicated.

That’s true. Can’t argue with that.

If you use a stock index fund and an intermediate-term Treasury index fund, you can have two funds plus gold and be pretty close to a true PP. I like simplicity too.

Smith1776 wrote: ↑Tue Jan 07, 2020 10:20 pm

dualstow wrote: ↑Tue Jan 07, 2020 10:10 pm I love the idea of a balanced fund, and I might own one if I didn’t know about the pp. I might go all into one if I’m still alive at 80.
However, 3 funds + gold is not terribly complicated.

That’s true. Can’t argue with that.

I have a small piece of Vanguard's Target Retirement Fund 2035 in a retirement account, just to see how I'm doing against it.
Only problem is, I haven't calculated how I'm doing.

dualstow wrote: ↑Wed Jan 08, 2020 2:45 pm

Smith1776 wrote: ↑Tue Jan 07, 2020 10:20 pm

dualstow wrote: ↑Tue Jan 07, 2020 10:10 pm I love the idea of a balanced fund, and I might own one if I didn’t know about the pp. I might go all into one if I’m still alive at 80.
However, 3 funds + gold is not terribly complicated.

That’s true. Can’t argue with that.

I have a small piece of Vanguard's Target Retirement Fund 2035 in a retirement account, just to see how I'm doing against it.
Only problem is, I haven't calculated how I'm doing.

lmao.

This is a little lofty, but does anyone else get a sense of satisfaction knowing that they own their own little slice of the global economy via these funds?

Like, every time I go to the mall and buy something, there's a little sense of ownership there seeing all these publicly traded companies doing business. We have ownership of our own little part of that. It's kind of nice.

Smith1776 wrote: ↑Wed Jan 08, 2020 3:14 pm This is a little lofty, but does anyone else get a sense of satisfaction knowing that they own their own little slice of the global economy via these funds?

Like, every time I go to the mall and buy something, there's a little sense of ownership there seeing all these publicly traded companies doing business. We have ownership of our own little part of that. It's kind of nice.

For sure. Collecting stock shares can be a very fun hobby. Even bonds too; It's sometimes cool to see how well my borrowers are doing.