I’m not being clear so let me restate my question: Knowing what we do about the state of the economy, are there any changes you would make to the investments within the PP, not the asset allocation.

For example, is holding 25% of equities in TSM (only 2.5% in foreign stock) enough diversification?

BTW, currently the PP holds only 15% in cash.

It’s interesting to consider these extreme situations. But we also must remember that the future is not predictable and the past does not repeat. Even if we are right about a particular doomsday event, the market may not respond the way we think and we could still lose money. Prior to 2008 some analysts predicted the real estate crash. But if you followed the advice to avoid it you may very well have taken worse losses than doing nothing. So my advice is to just stick to the plan because you are far safer diversifying your money across assets even if one or more crash than concentrating your wealth. If you concentrate your wealth and are wrong you could take horrendous losses.

If you think that cash, bonds, and stocks are going in the crapper (and I am not saying they aren’t), AND you are against holding everything in precious metals (I agree, this is very risky), then other commodities would be your only choice. I guess there is Real Estate, but I don’t see than one doing well in the next few years. I think TIPS are NOT a good idea if you feel like bonds (treasuries) are going to go down the tubes. I wouldn’t want to own US treasuries in today’s “we may default” environment. I really think though, that gold/silver WILL do quite well if all else fails. But it is a hard thing to do…. to figure out WHAT to do in today’s environment.

You choose to be more of a Hands on approach and if that has worked well for you after this apst decade? More Power to you..and just keep doing it your way..

But, for the vast majority who are not Hands On investors and like to Hire someone to do the job for them with a Decent recrod? PRPFX is one of those Bal Funds I recommend to my Conservative and Moderate, but Passive Investors,along with BERIX & VWINX for Retirement.

For Growth: FPACX, OAKBX and PRWCX and VWELX.

and We also advocate one’s Age to be In bonds and even ore so and to be a Minimum of 50% at any age.. The Difference btwn a 70/30 and a 50/50 portfolio over the past 30 yrs has been minimal..and does not warrarnt a higher or more aggressive Portfolio than a 50/50 at the most.

and for our Wealthy HNW ? We advocate a max of a 40/60 if not a 20/80..
Our Bond Portfolio has outperformed and preserved Principal and beat Inflation and provided the ave of 2.5% grwoth for over 30 yrs and we see no reason to change now..

I’m trying to integrate what I see happening today (different and worse that what we have seen in the past) with the PP philosophy. I’m not sure if can be integrated since I have lost hope for 3 of the asset classes. That said, just owning gold goes against every grain of my being….I still believe in diversification. (cognative dissonance?)

Thanks very much for your replies. I’m having a hard time finding people interested in discussing the mechanics of what to do with investments beyond ‘buy gold’ or “ignore the noise”.

But I think owing too much Gold hurt them during those times and not having more Treasuries..

But what do I know.. I’m just along for the ride..

I’d like to find a Similar fund that owns More Tresuries at the Right times ( Bear Mrkts only)

I know fo 2, but they are not available to us Poor people, and requried $1 Million – $10 , million to get into them.

I think that’s a valid concern, but I believe that the permanent portfolio would actually do fine in this instance and here’s why:

Even thought the PP puts money 25% into each of 4 categories, I think that if 3 of the 4 categories had abysmal results that the 4 category (the only other type of investment basically) would explode to the upside. So, theoretically, if cash, bonds, and stocks all collapsed gold would become extraordinarily expensive as everyone tries to move into that ’safe’ investment to try to maintain there wealth with something ‘real’. You actually might see a profit even though 75% of your investments became junk–you might. However, I think you would at least maintain your wealth or see only a slight decline (5-10%) when everyone else not holding gold in their portfolio would be wiped out. Make sense?