The Permanent Portfolio

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  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    k6chris wrote: »
    So what would a UK 'Lazy' portfolio look like if you were limited to 4 'things', each was 25% and you rebalanced every year??

    25% FTSE 250 (UK based exposure)
    25% Global Equity (non-UK large)
    25% Emerging Market
    25% Cash (for rebalancing in case of pull back)

    Tin hat on, so fire away :)

    Mine would be even lazier

    60% Global cap weighted equity
    40% Global bond index

    or whatever ratio satisfies your appetite for risk.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    25% cash, not all necessarily in Sterling.
    25% US TIPS
    25% Far East/Pacific equities
    25% stuff i.e. gold, silver and agricultural commodities.
    Free the dunston one next time too.
  • Flobberchops
    Flobberchops Posts: 1,279 Forumite
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    A quarter of your worldly possessions held in the form of gold. Yikes.

    I heard on the grapevine that gold is hideously overpriced at the moment and the precious metal to be hoarding is silver, especially the CGT-free stuff. Is there any truth to that?

    "Lazy" portfolios appeal to me. I'm an inveterate tinkerer and kettle watcher, but I still believe (almost on virtue rather than evidence) that simplicity is effective and vice versa. I'd go for something like 25% FTSE 350, 25% world equities, 25% bonds including P2P, 25% real estate, land, precious metals, signed Elvis jumpsuits, etc.
    : )
  • dunstonh
    dunstonh Posts: 116,376 Forumite
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    So what would a UK 'Lazy' portfolio look like if you were limited to 4 'things', each was 25% and you rebalanced every year??
    A lazy portfolio is using a multi-asset fund like VLS, L&GMI or HSBC or any number of alternative multi-asset funds.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • chrisgg
    chrisgg Posts: 68 Forumite
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    The permanent portfolio seems a sure fire way to underperform benchmarks over the long term.

    I'm unsure of the tactic of placing 50% of the portfolio in assets that will offer returns below that of inflation.
  • Pork&Beans
    Pork&Beans Posts: 11 Forumite
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    I'm gonna stick my head out the foxhole....brace yourselves chaps:

    I've decided for my ISA to run the Permanent Portfolio model using a split of FTSE 100 and FTSE 250 trackers for equities.

    I don't think you will make a fortune with it however I believe it will preserve wealth .Why not let a pension fund that you cant touch until your nearly dead take all the heavy volatility of say 100% equities.....

    (I have 30+ years to retirement ):beer:
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Terrible idea.
    For the FTSE100 you are mostly reliant on 10 or 11 companies that are based in about 3 or 4 industries, extraction,finance, pharma. Oh and one that kills its customers directly.

    For the FTSE250 you are first of all dependent upon how Brexit goes, and secondly are missing out the biggest companies in the world, multiple rising countries, and again many sectors especially high tech. Not a good plan for a "permanent" portfolio

    Guaranteed to underperform. Especially over 30 years.
  • dunstonh
    dunstonh Posts: 116,376 Forumite
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    I've decided for my ISA to run the Permanent Portfolio model using a split of FTSE 100 and FTSE 250 trackers for equities.

    FTSE100 is awful. Hasnt been out of the bottom three western indexes in the last 25 years. Badly diversified and totally undesirable as an investment choice.

    100% equity into UK only is taking a punt on the UK being the best stockmarket in the world every year for the next 30+ years. Not going to happen.

    Get yourself an adviser if you are not going to DIY properly.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • capital0ne
    capital0ne Posts: 872 Forumite
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    dunstonh wrote: »
    FTSE100 is awful. Hasnt been out of the bottom three western indexes in the last 25 years. Badly diversified and totally undesirable as an investment choice.

    100% equity into UK only is taking a punt on the UK being the best stockmarket in the world every year for the next 30+ years. Not going to happen.

    Get yourself an adviser if you are not going to DIY properly.
    Any chance of a look at your 'forever' portfolio?
  • Pork&Beans
    Pork&Beans Posts: 11 Forumite
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    Here's a question or two......

    What does emerging markets equities have to do with UK inflation? And how do you deal with currency risk?

    I may be wrong but the idea of the permanent portfolio was that it capitalised on any economic climate that is occurring in your country of residence.

    Yes the FTSE 100 is a big lazy large cap index..... but it lists companies like Shell......who don't just operate in Britain.It also pays out quite a nice dividend at 4%

    The 250 added in adds some faster growing stocks who by the way still do business abroad.

    As I previously stated I am not in it high capital growth, just slow and steady.

    What your saying is that if all 4 quadrants fail we will be trading back in turnips like the dark ages?

    Again as previously stated, the SIPP I have is in the Vanguard FTSE all cap. I can take the volatility there but I'm not prepared to take volatility for tappable savings.

    !!!55357;!!!56833;
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