Replies to post #31309 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Hi AIMster

Morningstar says it's good to keep pace with inflation, but that's about all.Morningstar says it's good to keep pace with inflation, but that's about all.

If you take the performance results from

http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/

and compare PP against 'cash' (Craig uses 1-2 year ST Bonds as a cash proxy) for 1980 to 2008, the two compare near identically over the period.

The PRPFX blend, if I understood correctly from what I've read, was Browne's original choice that he later revised to the 4 way 25% in each of stocks, bonds, gold and cash. I've seen somewhere (but don't have a link) that PRPFX was pretty dismal over a decade or so around the 1980's to 1990's if I recall correctly.

I believe PP to be more of a cash like alternative, except potentially being more tax efficient and with some added benefit of domestic currency insurance.

A (IMO) better option is Mebane Faber's style. That's somewhat similar in many respects to the stop-loss style I've used for a long time, but provides more uniform gains over time. That has a tendency to provide more stock like rewards, but whilst still keeping the low draw-down type resistance benefits. Or a blend of PP and Mebane's comes out quite well.

Gold is relatively high at present (some majors are starting to look to short gold), and with base rates at near 0% Long dated bond relative price levels are high IMO. As such I've opted to go for the blend of both PP and Mebane's as my 'CASH' investment.