Bogleheads

GTU is a closed-end fund, and that investment vehicle doesn't feature as close of asset value tracking as ETFs generally provide. There are some interesting academic studies on why this is the case. P ...

Thanks nsiprius that's a start. Still a bit light on data though.

Here are a few ways to look at gold in the portfolio. First how about comparing the worst decades for 0%, 10%, and 20% gold portfol ...

Every opinion isn't a claim nor an assertion which necessitates evidence.

Sure, if Dan's comment about 0% gold is just opinion or conjecture that is fine and I am still interested in reading it. It ...

I commonly read at least 20% has been historically optimal, and find myself wondering. Any reference for the 15% MT?

What you get for the historically optimal allocation depends on what goals you s ...

In the case of gold, for 99% of investors the proper allocation to gold should be 0% so it shouldn't matter what its price is.

I would be curious to see any data you have available to support this ...

It is characteristic of many things in our world that the solution is more complicated than the problem. I see this tendency in many approaches to investing. The PP is a refreshing alternative to th ...

This brings up a real problem then with no real clear solution. Owning gold bullion entails far too many risks. If a quarter of my portfolio is in a safe in my home, and someone absconds with it, I ju ...

Gold is what it is, no more no less. I would point out that the price movement of gold isn't any wilder than the TSM though. Here are the two worst years for each from the last few decades:

Gold: 1 ...

This is a good move as long as you are buying for the long term diversification benefit or to hedge dollar holdings. Gold etfs and bullion coins are taxed at the collectible marginal tax rate (capped ...

I looked at a deal like this. Basically it sounds like banks have figured out how to get debit card processing kick backs and pass it on like a credit card "rewards program". It costs in th ...

I am considering using either Scottrade, or the Vanguard brokerage services for my Permanent Portfolio accounts that are outside of my 401K.

I am a happy Scottrade customer. I haven't used Vanguard ...

I enjoy reading and listening to the Australian economist Steve Keen. He has been clear and coherent in his analysis since the financial crisis began.

Interesting, I will take a look. If you have ...

It is nice to have a mechanical means for selecting parameters needed for mechanical investing methods. If you do this then you can test your methodology with historical data. One idea for setting the ...

Hi Tomser, I noticed you haven't received any replies. I am not sure what goals you have for your portfolio, so I will assume two: reduce risk and reduce the number of funds.

Here is a backtest of ...

That's a good chart Lbill, here is another chart I just saw on Jesse's Café Américain

So we don't have Armageddon; we don't have inflation, so gold can maybe go slightly higher. But those peo ...

Has anyone taken a look at the "risk parity" approach to asset allocation and applied it to the PP?

Yes, and it works (examples below). Risk Parity is cool, but it actually wouldn't exis ...

From a taxable standpoint, where would be the best places to keep each asset category? Would certain components of the PP fare better in one of my tax deferred accounts as opposed to the Scottrade/Sa ...

Yes, some here are gold bugs, per Investopedia:

Hmm, this is a rather non-standard definition and would apply to anyone who has every owned in gold! A more conventional definition might be "G ...

I see that we have a troll. I will give a serious answer anyway

Investing 25% in a single commodity, like investing 25% in a single stock, is a very bad idea.

A key difference is that stocks go ...

It is noteworthy that the only two extended periods of economic decline in the U.S. in modern times followed the abandonment of a form of gold standard:

1933: Gold standard abandoned through conf ...

I am getting started with a permanent portfolio. I do have a nuts and bolts question for monthly additions to the portfolio. Should additions be made evenly with a 25% distribution to each asset categ ...

I'm curious which ticker to use on sites such as finance.yahoo.com or finance.google.com to compare/track Gold ETFs against the real spot price for Gold Bullion. Any idea?

Thank you,
Freeman

Y ...

I don't agree with the analysis that three of four asset classes are going to sell off together in the next 6-12 months. However, I do think that the current dollar policy will lead to increased volat ...

the Fed has created the "mother of all carry trades" for the USD, which is driving up the price of stocks, commodities, gold, and every other risky asset class. When that carry-trade unwind ...

Here is another chart of the dollar value of gold.

Keep in mind that the dollar is worth dramatically less today than in the 1970s so you need to look at an inflation adjusted chart. The price of g ...

I will have to use PRULX, VUSTX & VFISX. I understand that these funds are not ideal, but at the present time I don’t have much choice.

How much will these funds skew the PP portion of my po ...

It would be nice to be able to use PRPFX as a part of a true HB PP, since many of the pieces are already in place and PRPFX does have very appealing tax benefits.

I compared the total returns of PR ...

If you're not going to do the gold, I wouldn't mess with the PP. Go buy VWINX or OAKBX. Buy some corporate bonds or shares in pipeline partnerships. The PP isn't the only conservative game in town. ...

For those who like to run different models, I wonder what a PP would look like with 20% zero coupon 30 year treasuries, 20% gold, 30% stock and 30% two year treasuries.

Does anyone have a good sour ...

Hi Lbill, thanks for posting your musings. Here are some comments:

I have spent some time looking at the annual returns for the PP and each of the components (stocks, bonds, gold) for the period of ...

I don't disagree with you in terms of the current popularity of the approach. If the stock market starts hopping again I expect this idea to fade away back to the relatively boring status it's had for ...

"Why does one need to hold cash/short-term bonds during for deflation?" Cash is actually meant to provide liquidity during recessions. This means that you won't have to sell other parts of t ...

Thanks Macclary - You're right in the fact that I worry about bailing again if times turn bad. That's why I tilt towards Bonds. I hear what your saying concerning timing the Bond market but the fact i ...

Hmm, the deep seated psychological record of stepping out of the market in 2008 might be more important than you realize when faced with a different declining market. What I am saying is that even if ...

That is a good article, in fact Craigr linked to it further up the page. I cross pollinated it to Roger's blog, since they were talking about the PP and land. Then it came back to this thread again!
...

I'm glad you found that useful. Here is another portfolio with a little bit lower historical drawdown and it has less weight in US long bonds.

Portfolio Allocation: 35.0% LTGB , 20.0% SCV , 15.0% S ...

Here is a very conservative portfolio I posted recently on the Permanent Portfolio thread. It is like lower volatility permanent portfolio. There is no problem buying it all at once since the volatili ...

I don't think anyone is young enough for an 80/20 portfolio, please don't do that to your friend. Smile

Here are two other ideas for you:

70% AmCent S/T Gov TWUSX .57%
30% Keeley Small Cap Value ...

Thanks for the link about the PP in Iceland, that is fascinating.

I'm thinking of taking the 25% stock component and dividing it either 12.5% - 12.5% US/foreign or 15% US, 10% foreign.

I am a bi ...

Holding the TBM and Long Term U.S. bonds in a portfolio seems like a bet on deflation and/or decreasing interest rates.

Regardless of if TBM is included in a portfolio, I agree that holding US long ...

Isn't the point of holding the Total Bond Market (TBM) the same as holding the Total Stock Market? You don't know whats going to happen in the future (inflation or deflation?) so you hold the entire m ...

But starting from today, where we are now, yields are much lower than generally in the period you are using (I think, right?),

I think this analysis is only partly true. Nominal interest rates are ...

I am pretty comfortable with the answer I poster early in this thread which is that long bonds are justified if the increase in return justifies the increase in risk and that a better place to seek th ...

I don't think you need a forecast to recognize that, for example, 6 > 3.5.

Likewise I think that many people may agree that 3.5 > 1.5. However I am not sure of the predictive power of such co ...

If you see a buy-and-hold portfolio that does not include collectible Beanie babies a good question to ask is "why are you giving up diversification and taking on unnecessary risk." Razz

Lo ...

I think this conversation is tending towards hear-say rather than data. There are some free tools out there that will allow you to examine how a portfolio performs with different bond components. Exam ...

Long bonds tend to go up in environments when stocks are going down. This isn't universally true all the time, but it is true often enough that any portfolio that contains equities should contain long ...

Maybe someone can explain to me why I would want to purchase the CPI ETF with an expense ratio of 0.75% when I can buy TIPS at auction for free and the TIPS index has done better than CPI.

The quot ...

I've been attracted to extending from a set of three styles to four as that is akin to a form of PP style blend, i.e. stocks+cash and gold+bonds. Recently I've been considering Mebane's Quantitative ...

Exactly! In my research I have found that historic returns are not predictive of future returns Wink

This seems obvious, but basically all of finance is built on the opposite hypothesis. MPT for example ...