The Permanent Portfolio, Investing, Finance and Random Thoughts.
Posts tagged Investing
The Dollar is Crashing!!
2 years ago
by Craig Rowland
in Investing
What was this stuff I kept hearing last year about the dollar crashing? In December 2009 this talk reached a fevered pitch. Here’s the dollar index over the last year and you can see how much it’s recovered since the dark days of December 2009:
You can track the US Dollar index at this link.
Since this time the Euro has taken a pounding due to the issues with Greece possibly going into sovereign default. This drove the Euro down and the Dollar was the beneficiary. I’m not a dollar bull necessarily, but I post this just to show (yet again) that reacting to news that everyone else already knows is rarely a good way to invest. The markets are random and things we think must happen may not happen for a very long time (if at all).
Best to ignore all of the financial news and just stick to a simple diversified portfolio that can take care of you whether the dollar is sinking or flying.
Be a Skeptical Investor
2 years ago
by Craig Rowland
in Investing
If you’re in the investing world long enough, you’ll eventually get tempted to put your money into some new investment or try to tweak your portfolio to outperform the market. It’s easy to get lulled into an idea that you can beat the markets if you just do enough research, just make enough trades, just own the right funds, just follow the right market prognosticator, etc. But what you’re really doing when you try to beat the markets is moving from the realm of investing to speculating. And when you speculate, you take the chance you may beat the markets, but you also take the chance that you may not.
So in this vein, I went back and found a short segment of what I feel is one of the core ideas behind the Permanent Portfolio from Harry Browne himself. I think this little two minute clip captures a fundamental truth in the investing world about why you need to be skeptical and why you should understand the differences between investing and speculating:
Harry Browne the Skeptical Investor
This clip was taken from Harry Browne’s radio show on October 31, 2004.
Podcast: Play in new window | Download
The Permanent Portfolio Allocation
3 years ago
Harry Browne and Terry Coxon formally introduced the Permanent Portfolio in their 1981 book entitled: Inflation Proofing Your Investments. Like most great ideas, the Permanent Portfolio was simple, but was not simplistic.
The Permanent Portfolio investment strategy is the first one I’ve seen that developed an allocation based on economic cycle analysis. The Permanent Portfolio idea separated these economic cycles into four basic categories:
- Prosperity
- Inflation
- Deflation
- Recession
Podcast: Play in new window | Download
