|
Post by machineghost on May 23, 2016 21:54:23 GMT
Source: hussmanfunds.com/wmc/wmc160523.htmSo a 60% stock, 30% bond, 10% cash portfolio is only expected to return 1.5% total per year over the next 10-12 years. This is because the tailwind of high interest rates no longer exists in fixed income to buffer the overvalued stocks. How will the PP fare? I suspect it will be okay in either deflation or stagflation, but expectations need to be dramatically lowered. I think we could come out ahead big time if we get a gold bubble since it would be bound to shoot post actual inflation. Otherwise, buckle up for Japanese-style misery!!! Or, you could just avoid stocks altogether like I'm doing. I haven't decided yet whether it still makes sense to backstop non-stock investments with bond exposure. If they don't flunctuate, do they incur a loss?
|
|
|
Post by pugchief on May 23, 2016 22:38:43 GMT
Well, Hussman has been wrong so many times, I'm not sure he has any credibility left. Hopefully if he is correct, gold will pick up the slack.
|
|
|
Post by machineghost on May 24, 2016 0:19:10 GMT
He probably doesn't have any credibility left with the perma-bulls, but that's called "selective evidence". Let me play devil's advocate here. Is it really fair to blame the guy for QEternity distorting literally everything? Who could have predicted that and built it into a model ahead of time? Here's how the PP did during the first two lost decades in Japan from Marc's data (stocks, bonds, gold, cash, portfolio, inflation): I didn't compound the yearly returns, so everything is simple. I'd say we could expect to see a decade where both stocks and gold goes up whereas bonds and cash get nearly wiped out. Gold didn't save the Japan PP so much as it reacted to 09/11.
|
|
deuxlsteau
New Member
"and everyone would gather / on the 24th of May"
Posts: 42
|
Post by deuxlsteau on May 24, 2016 21:08:40 GMT
I think we could come out ahead big time if we get a gold bubble since it would be bound to shoot post actual inflation. Otherwise, buckle up for Japanese-style misery!!! It's the price of living in an advanced, matured society.
|
|
reub
Junior Member
Posts: 84
|
Post by reub on May 24, 2016 21:52:18 GMT
Trump would disrupt our financial malaise. Buy CAT. Buy inverse bond ETFs. Sell bonds. Buy Coal.
|
|
|
Post by technovelist on May 27, 2016 12:25:01 GMT
Buy gold.
|
|
corto
New Member
Posts: 7
|
Post by corto on May 27, 2016 13:32:09 GMT
Buy gold? I have been toying with adding more, but it is currently at 26% on my PP, so already over allocated if I follow the PP strictly.
Why would I want more gold? I've been buying since 2008 and my average price is $1356, so I continue to be underwater with no reasonable near term of rebalancing out of it by hitting the 40% band!
They have beaten me down to the point where it is simply another asset I love to hate. Gold has lost its allure long ago. There are so many "charlatans" out there still pushing gold as some magical savior, and all the gold is going east, and the Shanghai Gold Exchange will help discover the "true" price of gold. Excuse me but why do we think the Chinese would be less manipulative than the Comex?
I am glad to see it in the $1200s but it has a long way to go for me to ever give a crap about it again as much as I used to. I find I sleep better knowing I have physical, but that's about it. I am not spending my time agonizing how it is being manipulated anymore. Every market is manipulated.
End of Rant
|
|
deuxlsteau
New Member
"and everyone would gather / on the 24th of May"
Posts: 42
|
Post by deuxlsteau on May 27, 2016 15:04:36 GMT
40% band, corto? Why not 35%
|
|
deuxlsteau
New Member
"and everyone would gather / on the 24th of May"
Posts: 42
|
Post by deuxlsteau on May 27, 2016 15:09:16 GMT
And more importantly, is the pp doing ok for you overall? My gold is deep in the red, but I don't mind holding it, especially with lower expected returns with regard to the other three assets.
|
|
corto
New Member
Posts: 7
|
Post by corto on May 27, 2016 16:07:10 GMT
And more importantly, is the pp doing ok for you overall? My gold is deep in the red, but I don't mind holding it, especially with lower expected returns with regard to the other three assets. Oops, meant 35%, correct. PP doing very well this year, a little over 7% up. No complaints at all. I just wish, as I've stated in the past, that I had begun my investing journey in 1989 with something similar to the PP. I have gone from one sucky investing attempt to another until running into the PP in late 2013. Prior to that my most recent enchantment was with gold and miners, and, well, you know how that went at least with miners. Quite incredible when you read some miner related sites and how "good" GDX and GDXJ have recently been doing, "booking profits," etc. Sure, if you can call their near doubling in 2016 from 80+% down over the past 5 years a profit! Those who held made a little back. Big deal. ALL about timing when doing this, and PP removes me from that. All are loads of BS to push specific agendas and positions and I was sucked in too many times in the past. Happy where I am at, but gold, being my most recent enchantment, still affects me more than the other holdings!
|
|
|
Post by pugchief on May 27, 2016 17:06:19 GMT
I bought some GDX and GDXJ for my VP, averaged down a few times, tax loss harvested, and now all positions net are profitable. It was a long stressful wait, but hopefully paid off.
|
|
|
Post by machineghost on May 27, 2016 18:05:45 GMT
I've been DCA into non-semi-numismatic gold since gold went back to bullish a few months ago. That was far easier than pulling the trigger on stocks or bonds, because we have a clear roadmap of gold going to $5000/oz whereas stocks are due for another 50% correciton and no one really knows what is going to happen to bonds. Bonds is a bet on government control; gold is a bet on the invisible hand. Fortunately, the impasse has been productive (as all problems are always opportunities in disguse). I've come up with an effective market timing system for both stocks and bonds. It is in either one at all times. So problem solved. It's ironical that the solution wound up being like making biscuits or hamburger... you want to handle the dough or meat as minimally as possible and not one finger more. So I guess all the relentless Boglehead drumbeating served a useful purpose. And of course I reduced my allocation to gold stocks at the end of the year in disgust and to tax harvest right before it takes off. It never fails to amaze!!! But it was outside my risk parameters, so I'm okay with it. The gold rally is over for now anyway.
|
|
|
Post by technovelist on May 27, 2016 19:08:28 GMT
Gold stocks have almost nothing in common with gold bullion. Many people have learned that to their sorrow.
|
|
reub
Junior Member
Posts: 84
|
Post by reub on May 27, 2016 19:22:41 GMT
Buy gold? I have been toying with adding more, but it is currently at 26% on my PP, so already over allocated if I follow the PP strictly. Why would I want more gold? I've been buying since 2008 and my average price is $1356, so I continue to be underwater with no reasonable near term of rebalancing out of it by hitting the 40% band! They have beaten me down to the point where it is simply another asset I love to hate. Gold has lost its allure long ago. There are so many "charlatans" out there still pushing gold as some magical savior, and all the gold is going east, and the Shanghai Gold Exchange will help discover the "true" price of gold. Excuse me but why do we think the Chinese would be less manipulative than the Comex? I am glad to see it in the $1200s but it has a long way to go for me to ever give a crap about it again as much as I used to. I find I sleep better knowing I have physical, but that's about it. I am not spending my time agonizing how it is being manipulated anymore. Every market is manipulated. End of Rant
|
|
|
Post by machineghost on May 27, 2016 20:20:29 GMT
Were you trying to say something, Reub???
|
|