Gyroscopic Investing

Posted: **Tue Jan 06, 2026 5:56 am**

Hello everyone,

At the moment, the cash portion within my HB-PP portfolio stands at only 10%, while the HB-PP allocation represents roughly 20% of my total assets.

I am wondering whether it would make sense to rebalance the cash component within the HB-PP itself, or if maintaining this relatively low cash level is acceptable, given that I can access additional liquidity outside the HB-PP portfolio when needed.

Specifically, I am trying to understand the trade-offs between keeping a higher cash buffer internally—potentially reducing portfolio returns—and relying on external liquidity sources.

I would greatly appreciate any insights, experiences, or best practices from those who have faced a similar scenario. How do you typically approach cash management within a concentrated allocation like HB-PP while maintaining overall portfolio flexibility?

Wishing everyone a successful and prosperous 2026!

Posted: **Tue Jan 06, 2026 8:39 am**

if you are holding long term bonds then the cash represents the other half of the barbel, that brings down the volatility and duration of the long term bonds

Posted: **Tue Jan 06, 2026 8:49 am**

Of course it’s not just about liquidity, as you noted when you wrote

potentially reducing portfolio returns

I have a lot of stocks in vp, so it’s easy for me to hold lots of cash in the pp (way more than 10% of pp)
It does feel good to have cash when stocks come way down and stay down.

I would either get cash up to 15-25% or, if you’re pro stocks, just admit that you don’t have a pure pp, call it something else, and rely on your external reserves.

Posted: **Tue Jan 06, 2026 8:55 am**

after a while it’s like trying to be a little bit pregnant .

if you aren’t following the portfolio as designed then you can do as you like .

that’s a call no one else can make for you .

most who are waiting for that proverbial fall in stocks gave up so much over the years they won’t ever get back to what they could have had .

in fact most would not commit large sums back in to a plunging market that either looks like it has no bottom or it’s a suckers rally.

so do what meets your goals.

if you are where you need to be financially then cut back .

otherwise. you still need the growth and can’t afford to miss it

Posted: **Tue Jan 06, 2026 9:24 am**

Hey everyone!

Following up on my previous post, I’m curious about a PP-style portfolio with a 33-33-33% allocation (equities

/ bonds

/ gold

).

I’m trying to understand:

How would the overall risk change compared to a more traditional allocation?

What kind of impact on performance/returns could we expect?

Would love to hear your experiences or any examples you’ve seen!

Thanks in advance .

Posted: **Thu Jan 08, 2026 6:19 am**

frugal wrote: ↑Tue Jan 06, 2026 9:24 am Hey everyone!

Following up on my previous post, I’m curious about a PP-style portfolio with a 33-33-33% allocation (equities / bonds / gold ).

I’m trying to understand:

How would the overall risk change compared to a more traditional allocation?

What kind of impact on performance/returns could we expect?

Would love to hear your experiences or any examples you’ve seen!

Thanks in advance .

More volatility, more returns, less exposure to inflation.

Posted: **Thu Jan 08, 2026 8:21 am**

Use a 2x leveraged stock fund for the 'stock' third.

Thirds each 2x stock, gold, cash

Gold in hand, safest cash (T-Bills/short term treasury).

Exposure of 66% stock, 33% gold, 33% cash, 33% borrowed (by the leveraged ETF). Reduced counter-party risk, benchmark to 67/33 stock/bond and better reward, lower volatility, better SWR outcomes (since 1955 using synthetic 2x stock for pre actual 2x stock availability).

PV more recent years data https://www.portfoliovisualizer.com/bac ... TuKyyhCFVw

Posted: **Thu Jan 08, 2026 10:53 am**

seajay wrote: ↑Thu Jan 08, 2026 8:21 am Use a 2x leveraged stock fund for the 'stock' third.

Thirds each 2x stock, gold, cash

Gold in hand, safest cash (T-Bills/short term treasury).

Exposure of 66% stock, 33% gold, 33% cash, 33% borrowed (by the leveraged ETF). Reduced counter-party risk, benchmark to 67/33 stock/bond and better reward, lower volatility, better SWR outcomes (since 1955 using synthetic 2x stock for pre actual 2x stock availability).

PV more recent years data https://www.portfoliovisualizer.com/bac ... TuKyyhCFVw

No Long Term Bonds !?

Posted: **Thu Jan 08, 2026 4:37 pm**

I have run into the same conundrum. I personally don't like an explicit allocation to cash within my portfolio. Rather, I like my cash to be an entirely separate consideration.

The way I've reconciled this with PP-esque strategies is to use a 50% total bond market fund in place of the cash + long-term bond barbell. This allows me to mentally separate my cash/emergency fund outside the portfolio with the cash equivalent portion inside the portfolio. It has also the benefit of taking out the guesswork of exactly how long the long-term bond portion of your portfolio should be. Just let the total market dictate all of that.

Posted: **Thu Jan 08, 2026 11:20 pm**

ibonds are cash. we're only getting a return on long bonds if they do QE. No one needs to borrow your money and give you a real return. Government took your low risk returns by taking over student loans and mortgages. On top of that, shrinking skilled labor pool

Posted: **Sat Jan 10, 2026 5:53 am**

frugal wrote: ↑Thu Jan 08, 2026 10:53 am
seajay wrote: ↑Thu Jan 08, 2026 8:21 am Use a 2x leveraged stock fund for the 'stock' third.

Thirds each 2x stock, gold, cash

Gold in hand, safest cash (T-Bills/short term treasury).

Exposure of 66% stock, 33% gold, 33% cash, 33% borrowed (by the leveraged ETF). Reduced counter-party risk, benchmark to 67/33 stock/bond and better reward, lower volatility, better SWR outcomes (since 1955 using synthetic 2x stock for pre actual 2x stock availability).

PV more recent years data https://www.portfoliovisualizer.com/bac ... TuKyyhCFVw
No Long Term Bonds !?

Not a fan of lending - especially to someone who gets to set the terms and conditions and can direct money printing (debasement), inflation and taxation. Would rather add to each of stock/gold/cash than hold LTT (that said at times (when yields are above average) they may have appeal).

Posted: **Sun Jan 11, 2026 12:14 pm**

seajay wrote: ↑Sat Jan 10, 2026 5:53 am
frugal wrote: ↑Thu Jan 08, 2026 10:53 am
seajay wrote: ↑Thu Jan 08, 2026 8:21 am Use a 2x leveraged stock fund for the 'stock' third.

Thirds each 2x stock, gold, cash

Gold in hand, safest cash (T-Bills/short term treasury).

Exposure of 66% stock, 33% gold, 33% cash, 33% borrowed (by the leveraged ETF). Reduced counter-party risk, benchmark to 67/33 stock/bond and better reward, lower volatility, better SWR outcomes (since 1955 using synthetic 2x stock for pre actual 2x stock availability).

PV more recent years data https://www.portfoliovisualizer.com/bac ... TuKyyhCFVw
No Long Term Bonds !?

Not a fan of lending - especially to someone who gets to set the terms and conditions and can direct money printing (debasement), inflation and taxation. Would rather add to each of stock/gold/cash than hold LTT (that said at times (when yields are above average) they may have appeal).

I love TIPS!

Posted: **Sun Jan 11, 2026 2:23 pm**

not a fan of tips for all the reasons tyler wrote about

Posted: **Sun Jan 11, 2026 3:05 pm**

mathjak107 wrote: ↑Sun Jan 11, 2026 2:23 pm not a fan of tips for all the reasons tyler wrote about

There is nothing else available that is inflation protection guaranteed.

Posted: **Mon Jan 12, 2026 3:36 am**

if you read tyler’s take on them they are not guaranteed to beat inflation because of how they work and in fact it was almost a coin toss as to whether they beat inflation.

the base base rate is set by a guess as far as future inflation.

as guesses go they only guessed right about half the time

if they guess right about future inflation then the inflation adder plus the base rate keeps you ahead .

if they guess wrong than traditional bonds win

Posted: **Mon Jan 12, 2026 11:04 am**

mathjak107 wrote: ↑Sun Jan 11, 2026 2:23 pm not a fan of tips for all the reasons tyler wrote about

Hi Mat!

Where Tyler wrote ?

Regards

Posted: **Mon Jan 12, 2026 11:17 am**

https://portfoliocharts.com/2022/09/27/ ... #takeaways

Posted: **Mon Jan 12, 2026 11:37 am**

mathjak107 wrote: ↑Mon Jan 12, 2026 3:36 am if you read tyler’s take on them they are not guaranteed to beat inflation because of how they work and in fact it was almost a coin toss as to whether they beat inflation.

the base base rate is set by a guess as far as future inflation.

as guesses go they only guessed right about half the time

if they guess right about future inflation then the inflation adder plus the base rate keeps you ahead .

if they guess wrong than traditional bonds win

I did not say nor is their purpose to "beat" inflation.

Their purpose is to "match" inflation.

There is no rates set on guesses of future inflation or guesses of any kind.

The market sets it's yield. But if you buy an individual bond at that yield then during the term of that bond you will earn a real rate of that yield, which would be a nominal return of that yield plus the inflation that had occurred during its term.

Yes. You may have done better if you'd bought traditional bonds for the same time period. I think it's been 1/2 better one way and 1/2 better the other way.

However, are you going to buy a 30-year traditional bond at 7% today when in five years interest rates hit 20% like they did in the early 80s?

What do you think are going to be the results of a $38 trillion deficit that continues to grow (especially when fiscally irresponsible Republicans are in charge)?

I'm not trying to get the best return. I'm trying to preserve a real return no matter what.

Posted: **Mon Jan 12, 2026 11:38 am**

dualstow wrote: ↑Mon Jan 12, 2026 11:17 am https://portfoliocharts.com/2022/09/27/ ... #takeaways

That was written 3+ years ago and well worth being updated.

Posted: **Mon Jan 12, 2026 12:36 pm**

but still holds true .

the base rate is always based on a guess about the future inflation .

so no guarantee you will beat inflation , especially one’s own personal rate of inflation which is very different from just the cpi which is a price change index .

it has no calculation in it for how many times i buy something vs you .
lit contains loads of goods and services in it you or i may not use , or yoh do and i dont .

it does not look at quality . there is more price inflation in higher cost goods but they may last longer .

my 23 year old original north face gear is still in use today .

the cpi also doesn’t reflect how willing we are to make out of class substitutions. like if my no sugar added klondike’s are not on sale i will buy pudding or something else .

also inflation for seniors has been shown to be totally different.

during the early go go years of retirement, those seniors with discretionary spending tend to spend quite a bit .

but then the slow go years come , and a lot of what we used to spend on stops . now what is no longer bought helps defray increases on what continues to go up .

then we hit the no go years where health care ramps up , so seniors tend to spend in a smile shape according to the large scale studies by ty bernke and the sun life study .

so basing one’s personal cost of living can be very different than the cpi numbers

Posted: **Mon Jan 12, 2026 1:01 pm**

mathjak107 wrote: ↑Mon Jan 12, 2026 12:36 pm but still holds true .

the base rate is always based on a guess about the future inflation .

so no guarantee you will beat inflation , especially one’s own personal rate of inflation which is very different from just the cpi which is a price change index .

it has no calculation in it for how many times i buy something vs you .
lit contains loads of goods and services in it you or i may not use , or yoh do and i dont .

it does not look at quality . there is more price inflation in higher cost goods but they may last longer .

my 23 year old original north face gear is still in use today .

the cpi also doesn’t reflect how willing we are to make out of class substitutions. like if my no sugar added klondike’s are not on sale i will buy pudding or something else .

also inflation for seniors has been shown to be totally different.

during the early go go years of retirement, those seniors with discretionary spending tend to spend quite a bit .

but then the slow go years come , and a lot of what we used to spend on stops . now what is no longer bought helps defray increases on what continues to go up .

then we hit the no go years where health care ramps up , so seniors tend to spend in a smile shape according to the large scale studies by ty bernke and the sun life study .

so basing one’s personal cost of living can be very different than the cpi numbers

The base rate is not a guess on future inflation. It's how much someone is willing to pay to get the guarantee of the underlying rate of inflation.

Right now it is between about 1.0% to 2.5%, depending for how many years you want to commit.

The CPI is not a perfect measure of inflation. Certainly not going to match anyone's personal inflation.

But it is a somewhat average of everyone's inflation (by definition) and it an excellent proxy for what inflation is.

What can you invest in that is going to give you something that is so closely going to match the rate of inflation (and, hopefully, a little more).

At some points (like March 2020) people were so desperate to own something that had that underlying rate of return that they were willing to accept a negative add-on return.

Meaning that if inflation actually had turned out to be 0% during the term of the bond then they were willing to get back $99 back for their $100 investment (if bought at minus 1.0%).

Of course, they were willing to do that because if inflation had been 8.0% they'd have received back in a year $107 for their $99 investment.

TIPS are not to get rich. Not to create wealth. They are strictly to preserve wealth.

Posted: **Mon Jan 12, 2026 8:16 pm**

But NOW, cuz Drump, government is corrupt and its ok to question the government and how they measure inflation

Posted: **Mon Jan 12, 2026 9:22 pm**

boglerdude wrote: ↑Mon Jan 12, 2026 8:16 pm But NOW, cuz Drump, government is corrupt and its ok to question the government and how they measure inflation

There are just too many contracts in this country based upon CPI for even President Liar and Vice President Evil of the Lowlife Administration to get away with that.

Posted: **Tue Jan 13, 2026 2:46 am**

yankees60 wrote: ↑Mon Jan 12, 2026 1:01 pm
mathjak107 wrote: ↑Mon Jan 12, 2026 12:36 pm but still holds true .

the base rate is always based on a guess about the future inflation .

so no guarantee you will beat inflation , especially one’s own personal rate of inflation which is very different from just the cpi which is a price change index .

it has no calculation in it for how many times i buy something vs you .
lit contains loads of goods and services in it you or i may not use , or yoh do and i dont .

it does not look at quality . there is more price inflation in higher cost goods but they may last longer .

my 23 year old original north face gear is still in use today .

the cpi also doesn’t reflect how willing we are to make out of class substitutions. like if my no sugar added klondike’s are not on sale i will buy pudding or something else .

also inflation for seniors has been shown to be totally different.

during the early go go years of retirement, those seniors with discretionary spending tend to spend quite a bit .

but then the slow go years come , and a lot of what we used to spend on stops . now what is no longer bought helps defray increases on what continues to go up .

then we hit the no go years where health care ramps up , so seniors tend to spend in a smile shape according to the large scale studies by ty bernke and the sun life study .

so basing one’s personal cost of living can be very different than the cpi numbers
The base rate is not a guess on future inflation. It's how much someone is willing to pay to get the guarantee of the underlying rate of inflation.

Right now it is between about 1.0% to 2.5%, depending for how many years you want to commit.

The CPI is not a perfect measure of inflation. Certainly not going to match anyone's personal inflation.

But it is a somewhat average of everyone's inflation (by definition) and it an excellent proxy for what inflation is.

What can you invest in that is going to give you something that is so closely going to match the rate of inflation (and, hopefully, a little more).

At some points (like March 2020) people were so desperate to own something that had that underlying rate of return that they were willing to accept a negative add-on return.

Meaning that if inflation actually had turned out to be 0% during the term of the bond then they were willing to get back $99 back for their $100 investment (if bought at minus 1.0%).

Of course, they were willing to do that because if inflation had been 8.0% they'd have received back in a year $107 for their $99 investment.

TIPS are not to get rich. Not to create wealth. They are strictly to preserve wealth.

i agree wth tyler 100%

“ In fact, because of how TIPS are priced based on market predictions of future inflation, one could argue that buying them is really just a speculative bet on inflation. If inflation turns out to be higher than expectations, inflation-protected bonds are the better deal. If it’s lower than expectations, nominal bonds are the better deal. And if the market lucks into a perfect prediction of inflation, then the two options are a wash.

And incidentally, the fact that the yields of inflation-protected bonds are dependent on market expectations of future inflation is also why they’re virtually impossible to academically model. I’ve seen a few very smart people try, but the results have never tracked reality to my satisfaction. Which should be no surprise, as any model predicated on the market sentiment of the future is destined to have huge error.”

Posted: **Tue Jan 20, 2026 6:31 pm**

yankees60 wrote: ↑Sun Jan 11, 2026 12:14 pm
seajay wrote: ↑Sat Jan 10, 2026 5:53 am
frugal wrote: ↑Thu Jan 08, 2026 10:53 am
seajay wrote: ↑Thu Jan 08, 2026 8:21 am Use a 2x leveraged stock fund for the 'stock' third.

Thirds each 2x stock, gold, cash

Gold in hand, safest cash (T-Bills/short term treasury).

Exposure of 66% stock, 33% gold, 33% cash, 33% borrowed (by the leveraged ETF). Reduced counter-party risk, benchmark to 67/33 stock/bond and better reward, lower volatility, better SWR outcomes (since 1955 using synthetic 2x stock for pre actual 2x stock availability).

PV more recent years data https://www.portfoliovisualizer.com/bac ... TuKyyhCFVw
No Long Term Bonds !?

Not a fan of lending - especially to someone who gets to set the terms and conditions and can direct money printing (debasement), inflation and taxation. Would rather add to each of stock/gold/cash than hold LTT (that said at times (when yields are above average) they may have appeal).
I love TIPS!

Debt expansion (dollar debasement) broadly is larger/faster than consumer price inflation - that is slowed by increases in productivity. Gold more broadly offsets debt expansion - but in a very volatile manner. Matching CPI inflation and especially after cost/taxes may not reflect ones own consumption prices increases. Much of debt reduction is about making the population in general relatively poorer whilst having the optics of individuals not believing they're being hit. TIPS with a apparent positive real yield especially after cost/taxes are OK but shouldn't be solely relied up by individuals as they can fail to live up to expectations. OK as part of a portfolio, but as with all assets shouldn't be fallen in love with, especially as the borrower gets to set the rules/terms and conditions and can direct inflation and taxation to their advantage.

Gyroscopic Investing

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