Before you start this portfolio, be an educated investor and learn
as much as you can about Permanent Portfolio. Recommended readings are Harry
Browne's book "Fail-safe Investing", and Craig Rowland’s crawlingroad.com.
Learn the pros and cons of Permanent Portfolio. Ignore what Gurus predict about
economy. Come up with many reasons why you will not do market timing. Learn
basic knowledge about stocks, bonds and gold by reading relevant news from Bloomberg.
Plan out your stock, bonds and gold purchases so that you keep your yearly
running expenses low, meaning keep commission costs and management fees as
little as possible. From my research, best time to start and rebalance
Permanent Portfolio with fresh funds is end/start of every year. Second best
period is to start portfolio in February to April and rebalance with fresh
funds at every year end thereafter. Timing to start Permanent Portfolio is not
so important, and the best way to start Permanent Portfolio is to plan the purchases
first then invest in all 4 assets at once! If you plan to market time each
asset and buy into each asset at separate times, you could likely time wrongly
and reduce the returns instead! Your best chance of getting favourable returns
is to buy all 4 assets within a day or a week. If your brokerage account has
buy limits, use several brokerages to execute your order on same day. DBSV
cash-upfront account has no buy limits. If you do not have enough cash, you may
also opt to save your money first, until you can afford to implement the full
Permanent Portfolio at once.
If your initial investment is too small so that it is difficult to rebalance your portfolio easily every year, or if you need mroe than a year to save up before investing fresh cash into the portfolio, you can also leave the portfolio alone for a few years and rebalance when one of the asset reaches 35% or 15% of total portfolio. This is actually the third way of rebalancing Permanent Portfolio. The three ways of rebalancing have almost the same returns in the long run, so choose one of the rebalancing method that is most suitable for you.
If your initial investment is too small so that it is difficult to rebalance your portfolio easily every year, or if you need mroe than a year to save up before investing fresh cash into the portfolio, you can also leave the portfolio alone for a few years and rebalance when one of the asset reaches 35% or 15% of total portfolio. This is actually the third way of rebalancing Permanent Portfolio. The three ways of rebalancing have almost the same returns in the long run, so choose one of the rebalancing method that is most suitable for you.
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