Gyroscopic Investing

Think about it.

It's not as dumb as it sounds.

Why?

The Japanese yen provides the deflation protection that PRPFX lacks in its light treasury exposure.

PRPFX has plenty of inflation protection without the Swiss francs.

Why such confidence in the Yen?

In 'Best Laid Plans', I think Harry specifically said "It should not be Japanese yen" (nor one other currency) when he talked about previously incorporating the Swiss franc into the mix. But, it sounds like you're saying the yen would not even be serving the purpose that francs serve, right?

Harry took out the franc because gold does the job  of inflation protection better on its own.
Would treasuries (adding more treasurys to PRPFX) do a better job of protecting against deflation than adding the franc?
If not, do you think DIY'ers should be buying FXF for their portfolios? Edit: whoops, I mean FXY.

I don't think foreign currencies have any role in the PP at all.

I think what PRPFX does with the Swiss franc outlived its usefulness long ago.

If, however, you have to have a foreign currency in the PP, the yen has ironically been the one that would have provided the most safety in recent years.

I don't think it is so ironic that the Yen has been the best protector amoungst currencies. The awfulness of the Japanese stock market and immense level of Japanese savings has meant that the Japanese have massive exposure to stocks etc outside Japan. In every panic that money gets repatriated to Japan and so the Yen value spikes. Also the Yen value is despite it being actively managed down in value by the Japanese central bank against an export driven currency strengthening impetus. By contrast the current Swiss Franc value seems a fragile figment of investor sentiment. I agree that gold has the great advantage that it is a global alternative to currency. Warren Buffet (I think) used Brazilian Real bonds as foreign currency exposure from just after the four fold devaluation of the Real against the USD in the late 90's (the devaluation then reversed with >10% interest being paid whilst it did so). I guess that was a one off oppertunity that has been and gone and most people presumed would have been a disaster at the time.

MediumTex wrote: I don't think foreign currencies have any role in the PP at all.

I think what PRPFX does with the Swiss franc outlived its usefulness long ago.

If, however, you have to have a foreign currency in the PP, the yen has ironically been the one that would have provided the most safety in recent years.

In a true PP gold is your "foreign" currency. Once upon a time the Swiss Franc was synonymous with gold. If my memory has not failed Switzerland was the last country to decouple its currency from gold. But I agree, it has lost it's status as a real reserve currency. I am not sure if I agree with the Yen having a spot in PRPFX but I can't think of any reason why the CHF is still in it.