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I will also say that PP holders are unique because they hold Gold because they believe in the total portfolio, not necessarily because they understand the Gold market. Can you provide an example of a person who understands the gold market (other than you)? Your posts sort of make it sound like you ...

Then TIPS would be out because all sovereign debt is defaulted upon sooner or later, simply because all governments are temporary arrangements. For that matter, being alive is a temporary arrangement too... Yes, but over the course of one lifetime many other temporary social and cultural arrangemen...

I'd also want to be convinced there is a theory that your asset will continue to be a proxy in the future. Then TIPS would be out because all sovereign debt is defaulted upon sooner or later, simply because all governments are temporary arrangements. Note that this statement is more anthropological...

I have come to the rationalization that inflation is the change in the price of goods and services. The best protection against inflation is to invest in goods and services. What if you could find a single asset that over time had shown to be a pretty good proxy for changes in the price of goods an...

So either you: 1) Figure it's too unattractive/risky/not enough data and leave it out of your portfolio altogether. (Standard portfolio) 2) Figure you'll just take the pain in return for the insurance value. (Permanent Portfolio) 3) Figure on rotating in and out of gold based on real interest rates...

1982 gold peak to 2011 gold peak for instance - across which time the Permanent Portfolio lagged around 0.5% annualised below that of a 100% 5 year treasury fund. At least 19 of those 31 years saw positive real interest rates in the U.S. One would expect intermediate term treasuries to outperform g...

40 years is only 160 quarters. That's not nearly enough data to overcome the volatility inherent in stocks or gold. In both cases you need to turn to theoretical considerations to justify the investment. Data before the 70's is not relevant, because the rules were different. Then, the system had to...

If you want to own gold, I would say only do it as part of a diversified investment strategy with sound fundamentals and a long track record such as the Permanent Portfolio. Long track record :oops: Since the 1970's is hardly any track record at all. Really? How long of a track record do you need b...

Responding to the OP, no, the bull market for gold is not over. As long as real interest rates are negative (as they are now), gold is likely to do well. Since I have a high degree of confidence that the Fed is not about to start aggressively raising interest rates, I think that gold will continue t...

Over at gyroscopicinvesting we've often talked about the way Ray Dalio and other money managers will take Harry Browne's PP ideas and pass them off as their own. Most of the financial media are so gullible about what these celebrity money managers say that they would probably never do the five minu...

Clive, With all of the reservations you now have about the PP, how did you ever bring yourself to commit a significant part of your portfolio to it (with good results) a couple of years ago? Were you not concerned then about all of the things you are concerned about now? From reading your recent pos...

Over at gyroscopicinvesting we've often talked about the way Ray Dalio and other money managers will take Harry Browne's PP ideas and pass them off as their own. Most of the financial media are so gullible about what these celebrity money managers say that they would probably never do the five minut...

Brain, This has been discussed exhaustively. The PP prefers physical gold. It's not that physical gold is cheaper - it is not, since you pay a premium and you have to store it and insure it. But the philosophy of the PP is to have as few obstacles between you and your gold as possible. That said, E...

I'm still thinking a case can be made for not including the returns of the PP until at least the mid-1970s in backtested results. If you'll allow me to datamine, I'm sure I can come up with a lot of imaginary portfolios that no-one owned that would have done even better. At least stock and bond por...

What the yellow dog giveth, the yellow dog can taketh away. Be careful out there. But one must remember that what the greenback dog giveth, the greenback dog can taketh away. In another post, someone talked about gold being speculative. But the dollar is just as speculative, moreso in fact becuase ...

Actually, looking at the DBC commodities index for the past 10 years, it looks flattish, except for a blip during the panic of 2008, which is about the same time GLD started it's run. It looks to me like commodities returned to "normalcy" after the panic, but gold did not. And this is in ...

All discussions about the PP quickly become discussions about Gold. It's all about Gold. The PP is essentially a quite conservative 2:1 intermediate-duration bond/stock allocation with a gold kicker. It's the Swedroe fat-tails portfolio with a bunch of gold. The monthly returns of the 4x25 PP corre...

I've been following the PP very closely now for about five years, and from the day I started following it I noticed that a common reaction was "Well, it may have worked in the past, but it's about to stop working now because the world is a much more complicated place and such a simple strategy ...

If the function of gold in the portfolio is to protect against inflation, then why not own a basket of commodities, including gold, and get even more diversification out of the inflation-fighting component? Because such an approach turned-out terribly in 2008. But more to the point - a general bask...

So, I don't think the PP is for everyone. Time will tell. It may turn out to be for everybody, or it may turn out to be for nobody. Unfortunately, there is no way to decide who it is for until after the fact. I don't agree that there is no way to decide who it's right for until after the fact. I gu...

Here, maybe this will help http://images.investorshub.advfn.com/images/uploads/2012/11/22/sbofoa2.PNG Clive, You are picking as your starting point the last time gold peaked. Is that really helpful? Joe More importantly, the time period her has selected is basically the starting point and the endin...

So, I don't think the PP is for everyone. Time will tell. It may turn out to be for everybody, or it may turn out to be for nobody. Unfortunately, there is no way to decide who it is for until after the fact. I don't agree that there is no way to decide who it's right for until after the fact. I ac...

My skepticism is based on the fact that: 1. It's used data from the past to predict future results. 2. One could pick any 4 arbitrary and diverse asset classes and it would act similar to a PP in that the winning ones will be up 100%, 200%, 300% and more over time. Actually, Harry Browne conceived ...

If the function of gold in the portfolio is to protect against inflation, then why not own a basket of commodities, including gold, and get even more diversification out of the inflation-fighting component? Because such an approach turned-out terribly in 2008. But more to the point - a general bask...

The thing about the PP is that at any point in time one or more of the PP assets WILL be outperforming the whole portfolio. That's the idea. Course, at any point in time, one or more of the assets will be under preforming the whole portfolio, yes? Of course, and when you average them all together y...

The thing about the PP is that at any point in time one or more of the PP assets WILL be outperforming the whole portfolio. That's the idea. In the 1970s it was gold. In the 1980s and 1990s, it was stocks and treasuries (long and short term, depending on the period). In the 2000s, it was gold and lo...

As I have said 100 times, I am not against holding some cash and I'm not against having a little gold in the safe. That being said, I don't call these assets 'investments' because there's no reason for them to be worth more in 100 years after adjusting for inflation. By definition, an investment pr...

elgob.bogle wrote:"Shotgun Overview"

elgob

I heard that shooting the video was a real blast.

What would you say to a person in 2012 who had spent 40 years with a PP-like allocation and had enjoyed 9.5% average annual returns (4.5% inflation-adjusted) with very low volatility over the entire period? Would you tell them they had made an error? I'm more concerned as to what you would say to a...

What would you say to a person in 2012 who had spent 40 years with a PP-like allocation and had enjoyed 9.5% average annual returns (4.5% inflation-adjusted) with very low volatility over the entire period? Would you tell them they had made an error? I'm more concerned as to what you would say to a...

I'm all for looking at the portfolio as a whole, not the individual components.....but could even the diehard PP'ers stick with it 1988 thru 2000? say you adopt the Permanent Portfolio at the beginning of 1988. Your 25% allocation to gold is down for the year so you rebalance into it. Then 1989 Gol...

Craig (and/or MT), I don't know whether this is covered in your book, but what do you think about the CEF GTU for holding gold (in a taxable account)? As long as you understand the way its premium (or discount) to NAV will expand and contract over time, I think it is a great option. The trick is to...

The authors suggest a tactical overlay I like the permanent portfolio since to me it seems like an extension or corollary of MPT based on fundamental rather than purely mathematical relationships. I'm not particularly impressed with any of the authors' "tweaks" to the setup as they seem t...

Craig (and/or MT), I don't know whether this is covered in your book, but what do you think about the CEF GTU for holding gold (in a taxable account)? As long as you understand the way its premium (or discount) to NAV will expand and contract over time, I think it is a great option. The trick is to...

Craig (and/or MT), I don't know whether this is covered in your book, but what do you think about the CEF GTU for holding gold (in a taxable account)? As long as you understand the way its premium (or discount) to NAV will expand and contract over time, I think it is a great option. The trick is to...

CASH (25%) 25% on a saving account at 2% nominal annual return Cash does not earn 2%. If you are lucky, maybe 1%. In a savings account, 0.5%. So re-calibrate expectations here. I hate to move so far back up the thread, but I need to make one comment about this post and PP cash. One of the suggested...

for the cash 25% portion, can I just put that in my bank savings account? In 401k cash portion, Can I just buy the money market fund? These options are fine, so long as you understand the additional risk these approaches involve compared to treasuries. People sometimes scoff at the suggestion that ...

This is an intriguing portfolio to say the least. The .71% expense ratio for PRPFX is an immediate turnoff myself though. That, and I just can't bring myself to invest in gold. Just to clarify, PRPFX is to the Permanent Portfolio what Alex Rodriguez is to Major League Baseball. He's good and he get...

Personally I see gold as a "cash" substitute. During periods of positive real returns I'd prefer to hold cash since I'll get a small positive IRR, during periods of negative real returns I'd rather hold gold since zero is better than a negative number. Gold a cash substitute? I think not....

the worst loss was -5% in 1981. If i'm not mistaken that was a time of falling gold prices and rising interest rates. And a falling stock market. And high inflation. And a Fed raising interest rates in the middle of a recession. And high unemployment. Which is a scenario we could find ourselves in ...

I've been playing around with Simba's spreadsheet. Based on comparing the PP, I'm not sure the historical data persuasively show that you need Gold at all to get the same returns. Over the four decades from 1972-2011 if you held the Swedroe-type portfolio (with 25% in Small Cap Value and 75% in 5-Y...

One small elaboration of the drawdown information about the PP. It's true that on a year-over-year basis, the worst nominal drawdown was about -5% in 1981. Far as I know, that's based on looking at Simba's spreadsheet, which uses the annual returns for Vanguard funds and spot Gold. But to gauge you...

How do the experts (Craig and MT) feel about global diversification of the equity portion of PP? I think that a 15% allocation to international equities within the 25% allocation to stocks is about right. Thus, with a $100,000 portfolio, with a $25,000 allocation to stocks, you might have $21,250 i...

Craigr, thanks so much!! I have to read this book, I'm definitely going to pick-it up this weekend. If I do the PP, I would have to do it outside of my 401K because we do not have a Gold option. I appreciate the fact that you explained it so easily. In the book we go into 401(k) implementation opti...

Craigr, thanks so much!! I have to read this book, I'm definitely going to pick-it up this weekend. If I do the PP, I would have to do it outside of my 401K because we do not have a Gold option. I appreciate the fact that you explained it so easily. In the book we go into 401(k) implementation opti...

If you have all the money you need for your goals, PP makes sense. If you need real returns to meet your goals, it makes far less sense. Would mediumtex and craigr agree? The returns over 40 years with the PP have been so similar to the returns that many other more volatile strategies have provided...

Can someone post the 4 mutual funds or etfs to implement this? I'm not sure which mutual fund/etf is for cash and gold. A good way to model past PP performance (or set up a new portfolio) is to start with VTI for stocks, TLT for bonds, GLD for gold and SHV for t-bills (cash). There are lots of fund...

So is the 3 fund portfolio that is in the sticky of this forum better or this permanent portfolio? I'm confused. Using a 3 fund approach of 33% LT treasuries/33% stocks/33% gold has historically provided a slightly higher return than the 4x25% approach, with slightly higher volatility as well. *** ...

Dear sir, what would be the facts/happenings that would make you change the portfolio from PP to another ? Losing 50% ? 3,4 loosing years in a row? Tks A rolling three year period of negative average returns would definitely cause me to take a hard look at whether the theoretical framework of the s...

Nice - thanks for the chart. I do wonder how much of the 1970's gold performance was due to its deregulation (perhaps you could comment). But the consistency of the real return of the PP is rather astonishing. You may detect that my "kicking the tires" of the PP is really part of the proc...