Anyone still investing in gold or the Permanent Portfolio?

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Browser
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Anyone still investing in gold or the Permanent Portfolio?

Post by Browser » Fri Nov 01, 2013 5:19 am

I note that the price of gold peaked just about 3 years ago, and since that time it's lost about 30% with a pretty high volatility of around 20%. It looks like the great bull run that began back in 2002 or so might be finished. There was an enormous thread on the Permanent Portfolio a while back. At the time gold and the PP were doing well and there was a great deal of interest, but I haven't heard much lately. I'm wondering if followers have just gone into hibernation, or if folks have been getting out of gold and the PP as it has been descending. The toughest part of that portfolio seemed to me to be the fortitude to stay the course when gold rolled over as it has done now for the last three years.
We don't know where we are, or where we're going -- but we're making good time.

TT
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by TT » Fri Nov 01, 2013 6:36 am

Upon reviewing the performance of all the funds in the Permanent Portfolio Family of Funds I decided there was not any merit to keeping my investments there.
http://www.permanentportfoliofunds.com/pd_perf.htm

I owned it for about one year and did not sustain any losses as gold was experiencing a significant downturn.
Transferred my assets to vwinx and vwiax at Vanguard

Lesson learned = don't chase previous performance :oops:

donaldfair71
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by donaldfair71 » Fri Nov 01, 2013 6:49 am

I still invest in gold/silver, 5% of my portfolio. I use a 60/40 split Gold/Silver (not always perfectly 60/40, but in that neighborhood). In reality, I'm not sure that 5% makes much difference in regards to overall portfolio performance. But growing up, I was always fascinated by precious metals (not the price growth but the literal metal). So since I was buying anyways, I decided to include it in my portfolio and rebalance every Summer with my other investments.

Call_Me_Op
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by Call_Me_Op » Fri Nov 01, 2013 6:51 am

The Permanent Portfolio fund should not be confused with the classical Permanent Portfolio. They are different. In any case, it is well known that the PP will experience significant tracking error. That does not mean it's a bad portfolio concept, it just means that most people will have trouble sticking with it for this reason.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

FafnerMorell
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by FafnerMorell » Fri Nov 01, 2013 6:52 am

I would think for folks who buy gold for their portfolio, it's been an excellent year to buy low. As Warren Buffett says:

"When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep. For most people, it's the same with everything in life they will be buying -- except stocks. When stocks go down and you can get more for your money, people don't like them anymore." (of course, by "people", he's not referring to himself and other savvy investors).

Seems to indicate that WB has a blind spot when it comes to gold, since both stocks and gold seem to have this same behavior. Maybe he understands gold unconciously better than he allows himself to openly admit :)

OK,I'm just teasing WB - this is a pretty common emotion to question/pull-back-on one's investments when they go down in value, regardless of whether their stocks, gold, or whatever - when if they were investing for the long-run, they should be stocking up. The question folks need to ask themselves is if they're investing in X for the long run. Personally, I'm not fond of gold as an investment - folks that argue that it's more insurance against "minor distruptions" in the economy (where "minor" is the Great Depression or Great Recession or Hitler-Coming-To-Power-so-lets-flee-the-country, but not an asteroid that kills all life, or a Mad Max scenario where it's gas, guns & food that only matter).

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leonidas
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by leonidas » Fri Nov 01, 2013 6:55 am

I still have a position in the Permanent Portfolio that's been there for nearly 10 years. Quick math shows its about 2% of my total portfolio. I also still own physical Gold and Silver that make up nearly 5% of portfolio. Gold pretty much peaked in 2011 and is down quite a bit. I try to keep those investments combined to about 5-10% of my holdings.

MCSquared
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Re: Anyone still investing in gold or the Permanent Portfoli

Post by MCSquared » Fri Nov 01, 2013 8:36 am

Browser wrote:I note that the price of gold peaked just about 3 years ago, and since that time it's lost about 30% with a pretty high volatility of around 20%. It looks like the great bull run that began back in 2002 or so might be finished. There was an enormous thread on the Permanent Portfolio a while back. At the time gold and the PP were doing well and there was a great deal of interest, but I haven't heard much lately. I'm wondering if followers have just gone into hibernation, or if folks have been getting out of gold and the PP as it has been descending. The toughest part of that portfolio seemed to me to be the fortitude to stay the course when gold rolled over as it has done now for the last three years.
The reason you don't see much discussion here anymore is that there is that the PP now has it's own discussion board. Most of the posters you see in the old threads here in Bogleheads post regularly on the PP board.

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