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I know there’s been quite a bit of discussion regarding Harry Browne’s Permanent Portfolio investment approach on these boards. As we approach Q4, I’m wondering if PP is on track for its worst annual performance ever? It’s currently sitting down ~11% to date. I’m not sure there ever been such a unified downturn in both equities and treasury bonds in the same year.
I know there’s been quite a bit of discussion regarding Harry Browne’s Permanent Portfolio investment approach on these boards. As we approach Q4, I’m wondering if PP is on track for its worst annual performance ever? It’s currently sitting down ~11% to date. I’m not sure there ever been such a unified downturn in both equities and treasury bonds in the same year.
Has to be.
This is a year that you had to thinking outside the box.
Has to be.
This is a year that you had to thinking outside the box.
In most years, bonds and gold would serve as a bit of a hedge against equities but they haven’t worked this year. Just found it interesting. Seems like all asset classes minus commodities have deflated this year. But I think commodities are the next shoe to drop (gasoline prices already back to pre-Ukraine war levels).
I know there’s been quite a bit of discussion regarding Harry Browne’s Permanent Portfolio investment approach on these boards. As we approach Q4, I’m wondering if PP is on track for its worst annual performance ever? It’s currently sitting down ~11% to date. I’m not sure there ever been such a unified downturn in both equities and treasury bonds in the same year.
Harry Browne described the condition as tight money recession when the contraction of economy goes along with rising rates. All assets are going down but T-bills. According to Harry, Feds changes the course and relaxes monetary police within a year to a year half. That will be the moment when long-term bonds will shine
Harry Browne described the condition as tight money recession when the contraction of economy goes along with rising rates. All assets are going down but T-bills. According to Harry, Feds changes the course and relaxes monetary police within a year to a year half. That will be the moment when long-term bonds will shine
I hope so because I have a sizable bonds position while waiting for rates to top
TLT continues to get crushed. PP is on track for a 20% decline this year and zero return over a 5 year period (negative real return when accounting for inflation). Retirees are getting absolutely killed this year. I can’t imagine how stressed I would be if I just retired within the last couple years (unless of course I had a fat pension).
I don’t usually post but I did want to say a few things on this .
Inok is spot on .
Harry brown called it 50 years ago when he said no assets will do well in a tight money recession and he is 100% correct as we are seeing .
The PP IS doing better than many popular portfolios including the 60/40 and ray dalios all weather portfolio.
Also Tlt is not doing any worse then say a 50/50 with the bond side all in a total bond fund like many conventional portfolios use .
The barbell used in the PP is 25% in cash instruments and 25% in long term treasuries..that is actually not down as much as if you had all 50% in a total bond fund .
The portfolio in retirement is no problem as the 25% cash instruments position can provide plenty of spending cash while waiting for things to settle down.
I think the fed will get one or two more increases before they risk throwing the world in to a global recession …once there is a hint of the fed having to stop , money will poor back into the safety assets like long term treasuries and gold .
The fed has a history of over doing things both dropping rates and raising them.
The PP may just be ONE OF THE the best horses at the glue factory right now as it is poised to have a powerful recovery .
Just like on the way down , it can have three out of 4 powerful movers going up at the same time as well.
You have 3 very powerful movers that can easily move the same or greater than equities can .other portfolios can’t say that as a total bond fund is not going to move anywhere near the capabilities of equities for the most part .
We have not had a tight money recession since 1982 so this is the largest draw down for the pp in its history which spans almost 50 years.
The dollar will eventually weaken as it cycles too . The dollar has been killing gold .
Do you know in India gold is up 68% since august 2020 .
So it isn’t that gold is not doing anything …it is the conversion to dollars that is killing it
Last edited by mathjak107; 10-21-2022 at 07:50 AM..
I don’t usually post but I did want to say a few things on this .
Inok is spot on .
Harry brown called it 50 years ago when he said no assets will do well in a tight money recession and he is 100% correct as we are seeing .
The PP IS doing better than many popular portfolios including the 60/40 and ray dalios all weather portfolio.
Also Tlt is not doing any worse then say a 50/50 with the bond side all in a total bond fund like many conventional portfolios use .
The barbell used in the PP is 25% in cash instruments and 25% in long term treasuries..that is actually not down as much as if you had all 50% in a total bond fund .
The portfolio in retirement is no problem as the 25% cash instruments position can provide plenty of spending cash while waiting for things to settle down.
I think the fed will get one or two more increases before they risk throwing the world in to a global recession …once there is a hint of the fed having to stop , money will poor back into the safety assets like long term treasuries and gold .
The fed has a history of over doing things both dropping rates and raising them.
The PP may just be ONE OF THE the best horses at the glue factory right now as it is poised to have a powerful recovery .
Just like on the way down , it can have three out of 4 powerful movers going up at the same time as well.
You have 3 very powerful movers that can easily move the same or greater than equities can .other portfolios can’t say that as a total bond fund is not going to move anywhere near the capabilities of equities for the most part .
We have not had a tight money recession since 1982 so this is the largest draw down for the pp in its history which spans almost 50 years.
The dollar will eventually weaken as it cycles too . The dollar has been killing gold .
Do you know in India gold is up 68% since august 2020 .
So it isn’t that gold is not doing anything …it is the conversion to dollars that is killing it
Good point regarding dollar strength. It is killing everything right now and even more so countries outside the US. It appears the Fed has weaponized the dollar perhaps partly in response to Russia’s invasion of Ukraine and China’s aggressive overtures the last couple years.
It has absolutely nothing to do with the permanent portfolio…
Your comment is better suited for a discussion about market timing the right asset at the right moment but it has nothing to do with this discussion
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