Gyroscopic Investing

Hi,

I am 19 years old. I am a boglehead investor and was directed to this forum. I know a little bit of HB Permanent portfolio. I am interested in adding this AA. I am a passive index guy. My AA: 100% stocks
Roth IRA:

25% Total Stock Market Index
25% Total Int'l Stock index
25% REIT
25% SCV

Roth IRA:
Permanent Portfolio <------here (maybe 7%)

1) How would the permanent portfolio diversify my investments?
2) I noticed that  the expense ratio is a bit high. Is it justified? Worth it?
3) Chances of Ponzi Scheme?
4) How many people invests in this fund?
5) How well does this fund do against Vanguard's Wellesley's fund?
6) How many actually have an account with the family of permanent portfolio LLC??

Thanks!

PRPFX is a great fund.

I have several accounts with them directly and have had these accounts for several years.

I would not worry about the fund not being legitimate (you should read the prospectus, though).

Read various posts here and you should get answers to all of your questions.

noname wrote:
25% Total Stock Market Index
25% Total Int'l Stock index
25% REIT
25% SCV
1) How would the permanent portfolio diversify my investments?

In my opinion, your portfolio really isn't diversified right now.  It's basically all stocks (even the REIT portion, in my opinion).  Frankly speaking, I think you'd be better diversified if you owned 100% PRPFX.  It's one fund, but it's a much more diversified fund than what you already own, if that makes sense.

I would be hard pressed to find an investment strategy more diversified than the permanent portfolio. 

Read Craig's FAQ's and you will understand everything much better.  Make sure you understand the four different investing environments and how each asset class works in each setting.

Congrats on finding the PP at such a young age.  It will save you a lot of financial heartache.

Adam1226 wrote:

noname wrote:
25% Total Stock Market Index
25% Total Int'l Stock index
25% REIT
25% SCV
1) How would the permanent portfolio diversify my investments?

In my opinion, your portfolio really isn't diversified right now.  It's basically all stocks (even the REIT portion, in my opinion).  Frankly speaking, I think you'd be better diversified if you owned 100% PRPFX.  It's one fund, but it's a much more diversified fund than what you already own, if that makes sense.

I would be hard pressed to find an investment strategy more diversified than the permanent portfolio. 

Read Craig's FAQ's and you will understand everything much better.  Make sure you understand the four different investing environments and how each asset class works in each setting.

Congrats on finding the PP at such a young age.  It will save you a lot of financial heartache.

Well. I am a bit confused. Shouldn't the PP be considered a separate portfolio? What about Variable portfolio?

noname wrote:

Adam1226 wrote:

noname wrote:
25% Total Stock Market Index
25% Total Int'l Stock index
25% REIT
25% SCV
1) How would the permanent portfolio diversify my investments?

In my opinion, your portfolio really isn't diversified right now.  It's basically all stocks (even the REIT portion, in my opinion).  Frankly speaking, I think you'd be better diversified if you owned 100% PRPFX.  It's one fund, but it's a much more diversified fund than what you already own, if that makes sense.

I would be hard pressed to find an investment strategy more diversified than the permanent portfolio. 

Read Craig's FAQ's and you will understand everything much better.  Make sure you understand the four different investing environments and how each asset class works in each setting.

Congrats on finding the PP at such a young age.  It will save you a lot of financial heartache.

Well. I am a bit confused. Shouldn't the PP be considered a separate portfolio? What about Variable portfolio?

noname,

Do yourself a favor and buy a copy of "Fail Safe Investing" and read it.  It will cost you $9.75 (or less) and it will be worth many times that if you will internalize the information and concepts that are covered in the book.

As you learn more about the PP, the VP, and the related concepts, I believe that you will begin to make a name for yourself.

i agree. much research is needed. this forum is similar to the bogleheads per say.

noname wrote: i agree. much research is needed. this forum is similar to the bogleheads per say.

It's actually quite simple.

What is hard is getting a human mind accustomed to complexity to accept that something as simple as the PP can actually work.

MediumTex wrote:
Do yourself a favor and buy a copy of "Fail Safe Investing" and read it. 

Do yourself one other favor...

Go to Google Finance.  Start a portfolio there using the tickers SPY, GLD, TLT and SHV.  Watch them every day, and ask yourself how you think you would feel if you had 25% of your money in each ETF.

Watching it work will make you want to know how it works.

Adam1226 wrote:

MediumTex wrote:
Do yourself a favor and buy a copy of "Fail Safe Investing" and read it. 

Do yourself one other favor...

Go to Google Finance.  Start a portfolio there using the tickers SPY, GLD, TLT and SHV.  Watch them every day, and ask yourself how you think you would feel if you had 25% of your money in each ETF.

Watching it work will make you want to know how it works.

What about:

Vanguard total stock market index instead of S&P500? What about international equities?

noname wrote:

Adam1226 wrote:

MediumTex wrote:
Do yourself a favor and buy a copy of "Fail Safe Investing" and read it. 

Do yourself one other favor...

Go to Google Finance.  Start a portfolio there using the tickers SPY, GLD, TLT and SHV.  Watch them every day, and ask yourself how you think you would feel if you had 25% of your money in each ETF.

Watching it work will make you want to know how it works.

What about:

Vanguard total stock market index instead of S&P500? What about international equities?

Let me answer these questions and pre-answer your next 10 questions by saying please read some of the posts in this forum.

It's all there, in incredible detail.