permanent portfolio questions

[eytonxav]

Certainly, there's no limit to the number of funds you can own. If you want to slice and dice it might even be sensible. But most people with 20 funds have arrived there very "organically" and will have significant duplication of asset classes. No compensation from VG, just a happy customer. The tax efficiency point is still valid.

I am fine with my portfolio composition, overlap and cost. As to PRPFX, I view it as an alternative investment as it tends to do reasonably well under most market conditions.

If you choose to place your bets using a Vanguard indexed approach, great, but I have decided on using a combination of indexes, active MFs, individual stocks and different managers, plus several alt investments. Also, I am a singles hitter, not trying to hit it out of the park, and preservation is more important to me than growth.

 

[Spanky]

As to PRPFX, I view it as an alternative investment as it tends to do reasonably well under most market conditions.

I think only 25% of this fund is considered "alternative" -- the gold or precious metals portion.

 

[eytonxav]

I think only 25% of this fund is considered "alternative" -- the gold or precious metals portion.

Just to clarify, I personally view the fund as alt investment, others may classify it differently. It invests a fixed target percentage of its net assets in gold, silver, Swiss franc assets, stocks of U.S. and foreign real estate and natural resource companies, aggressive growth stocks, and fixed-income assets like treasuries.

 

[Spanky]

Just to clarify, I personally view the fund as alt investment, others may classify it differently. It invests a fixed target percentage of its net assets in gold, silver, Swiss franc assets, stocks of U.S. and foreign real estate and natural resource companies, aggressive growth stocks, and fixed-income assets like treasuries.

You can call PRPFX as an alternative investment if you insist. The Overall Portfolio Composition (%) is:
cash: 14.14
Stocks: 29.55
Bonds: 30.71
Other: 25.60

Stocks, bonds and cash, by definition, are traditional asset types. Only 25.6% is considered "Alternative".

 

[eytonxav]

You can call PRPFX as an alternative investment if you insist. The Overall Portfolio Composition (%) is:
cash: 14.14
Stocks: 29.55
Bonds: 30.71
Other: 25.60

Stocks, bonds and cash, by definition, are traditional asset types. Only 25.6% is considered "Alternative".

I'm not insisting on anyone considering this to be an alt investment, I just said I did. Here is some more info on the fund if anyone is interested:
http://www.permanentportfoliofunds.com/pdfs/perm/PRPFX.pdf

You can see the actual allocation there. I would guess that even a purist would consider the swiss franc holdings to also be alt.

 

[ziggy29]

So you have over 20 funds?

PRPFX may perform well, but the 0.82 expense ratio isn't in it's favour

All that matters is performance after fees (and taxes if held in a taxable account). Focusing on the "expense ratio" number in a vacuum without proper context (using it in conjunction with total return) may be the hard-core Bogleheaded thing to do, but IMO (again, unless you're Bogleheaded enough to think its long term performance is just "luck" because there's no such thing as consistent market-beating returns) it's not the optimal way to analyze a mutual fund.

 

[nun]

All that matters is performance after fees (and taxes if held in a taxable account). Focusing on the "expense ratio" number in a vacuum without proper context (using it in conjunction with total return) may be the hard-core Bogleheaded thing to do, but IMO (again, unless you're Bogleheaded enough to think its long term performance is just "luck" because there's no such thing as consistent market-beating returns) it's not the optimal way to analyze a mutual fund.

You got me, I'm a hard-core indexer. I stopped comparing the returns of funds and chasing return a long time ago and just decided on an AA and set that up with a small number of index funds. My blood pressure has stayed low thorough the ups and downs. I have no interest in beating the market or doing anything to get greater return than the indexes I follow will generate. This is enormously liberating. My ER plan does not require large gains so I will leave those for other people to catch. The time and worry I save are worth more than any fleeting positive alpha or market beating returns. Rebalancing had me buying stocks at 6000 and now I have to keep selling equities. I have no idea where the peak is, but I've already taken a lot out of this market cycle.