The Permanent Portfolio Strategy - A reasonable return low volatility Strategy

[Shiny Things]

ty shiny so basically no exposure when holding xau. however fx risk only when converting currencies? e.g. convert to buy / convert after selling

Pretty much.

Also it's important to remember that you do have risk while you're holding XAU - you've got the risk of the gold price going down, or of SGD going up.

 

[dominion23]

I would say the coupon payments from bonds are not high as before.

But funnily if we look at the US manner of this strategy, it is working very well.

http://www.crawlingroad.com/blog/2015/01/01/permanent-portfolio-returns-2014/


Not so for SingapoRe equivalent though.

i am thinking we may like to try this US portfolio regardless of FX issues due to the possibility of stronger US dollar in future but then again, the risks/ratio are different already.

Of course there are still the drawdowns due to dividends taX from buying US stocks.

For discussion.

this wouldn't work well if we have a substantially weak bond market... because our risk free rate would fall, then the only choice would be to go for a higher risk stock market and hedge some with cash...

any suggestions on how to achieve a good risk free rate?

 

[warr]

i have some reservations of the SG-implementations of the PP.
the important point of PP in the book is, that different asset classes behave differently in different cycles. if all 4 asset classes are in the same economy, e.g. US, the reasoning makes a lot of sense. and i buy that theory.

now, in SG context, we still buy Gold in USD, but we put equities in SG market, and buy Local SG Gov Bond. the Gold subject a lot to the USD value that subject to US Fed policy. the SG equities and Bonds subject to SG Gov Policy and around this region(of course some US factors as well).

if we do this, does that theory of different behaviors of different asset classes in different economic cycles still hold well? Have we weakened those uncorrelated relations among the asset classes?

i am not implying it fails completely, but i am just thinking that the diversification benefit due to the inherent correlations is reduced.

sometimes i think, perhaps we should just adopt the PP entirely in the US context, buy all 4 classes according to the book's list. then use a Variable portfolio in local context.

 

[urameshi_85]

A permanent portfolio for the singapore context available as a book

The Singapore Permanent Portfolio Book On Sale Now

 

[felixleong]

A permanent portfolio for the singapore context available as a book

The Singapore Permanent Portfolio Book On Sale Now

20 bucks... hm....

 

[urameshi_85]

20 bucks... hm....

i just bought. Maybe I can give a book review soon.

 

[klarklar]

Bookmarked

 

[klarklar]

Permanent portfolio is dead, according to this article.

http://seekingalpha.com/article/3325355-the-permanent-portfolio-is-dead?ifp=0

 

[friedpiggy]

Permanent portfolio is dead, according to this article.

http://seekingalpha.com/article/3325355-the-permanent-portfolio-is-dead?ifp=0

Lengthy text... but 3 yrs of bad performance may not be long enough to say its no good when there are decades of backtested outperformance.

I dont subscribe to it. But 1 key take away which i believe is very relevant for other investing methods ie. ReBalancing.

 

[urameshi_85]

Time to review my portfolio as gold has shot up quite abit recently.

 

[genie47]

Time to review my portfolio as gold has shot up quite abit recently.

PH1S also shot up. I bought in the low 90s and now it is low 100s. Those who don't get bonds of any kind really missing a lot.

Just rebalanced.

 

[urameshi_85]

PH1S also shot up. I bought in the low 90s and now it is low 100s. Those who don't get bonds of any kind really missing a lot.

Just rebalanced.

Now I'm at 20% stocks 29% gold 27% bonds 24% cash haven't hit the rebalance bands of 35% yet. I'll just wait this one out.

 

[frenchbriefs]

the history of gold prices is complicated,unlike the stock market we know always go in one direction diagonally up from left to right.

theres two major gold bubbles in the history of gold prices one in the 1970s and one in the 2000s.when u enter the gold market can crucially impact ur performance 20 years into the future,timing is of essence and u also have to rebalance vigorously during these bubbles.

if u take away the gold bubble and calculate the historical returns of gold from 1975 until 2005,the average annual return of gold is only a measly 2.93 percent percent annual.but if u include the gold bubble up till 2012,gold returns jumps up to 6.6 percent......if u invested in gold in 1969,u will be rich beyond believe,attaining a annual return of 9.1 percent,but what are the odds?right now gold prices are far from 1969 prices.if u entered the gold market in 1980 to 1982 u are farkin screwed,ur return will be close to zero after 30 years.as buffet and william bernstein like to say,the price u pay now determines the returns u get in the future.

one more important question,do u want 25 percent of ur portfolio is gold and 25 percent in cash which are both long term deadweights......like the title said these bozos created the permanent portfolio to protect their huge hoards of gold ,u dont have huge hoards of gold to protect.

 

[Felixbunny]

Hi,

I would like to ask if it would be advisable to do the following.

As I do not have enough cash to get into this portfolio up straight ( Buy all 4 asset classes. ), would it be advisable to buy 1/2 asset classes when the prices drop by 40% (simulating the drop from 25% to 15%)? Then thereafter, when I save enough cash, I will purchase the other assets. Does this make sense?

I understand this might not even happen at all. If by the time I have saved enough money, I would just buy the 4 asset classes in one shot.

 

[laalaaland]

Necro thread
What's the TS investment returns? It's been over 10 years already????

 

[occifer]

Average down spy, qqq, dia and Berkshire would be better imo.

 

[Overture1928]

CPF SA is the real Permanent Portfolio

Permanently out of reach too

 

[reddevil0728]

CPF SA is the real Permanent Portfolio

Permanently out of reach too

How is it permanently out of reach. Did you confuse it with something else?

 

[Overture1928]

How is it permanently out of reach. Did you confuse it with something else?

Tongue-in-cheek because of the everchanging retirement ages

 

[reddevil0728]

Tongue-in-cheek because of the everchanging retirement ages

For a very practical and logical reason.