Permanent portfolio and asset allocation - Page 12
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Thread: Permanent portfolio and asset allocation

  1. #111
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    Quote Originally Posted by james4beach View Post
    I've been debating this myself. In the US version, people use long term government bonds (i.e. pure treasury bonds with over 20 years average maturity).

    ZFL looks interesting and may be suitable, but I don't think XLB is a good choice because it's only 24% federal government bonds.

    I'm not convinced that long maturity bonds are a requirement for the PP. In the data I posted above, I used VAB & XBB for the bond component -- those are avg 10 year exposure instead of 20+ year exposure. The results look nice to me. If you go with ZFL instead for longer maturity bonds then you will get more volatility in bad years for bonds, and only a bit more performance.

    I also like that with the 10 year (VAB) exposure, you get much lower MERs.
    I would appreciate any feedback/comments on the following asset allocation:
    12% XIU, 13% ZCN (Stocks)
    20% MNT, 5% Physical Gold (Gold)
    15% ZFL, 10% VAB (Bonds)
    25% (5 yr GIC Ladder) (Cash)


  2. #112
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    - XIU/ZCN - same kinda thing. Chose one (or XIC/VCN).
    - You are limiting yourself to Canadian stocks. Therefore, you are missing out on the 97% of the world market.

    You are very conservative but I guess you know that.

  3. #113
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    Quote Originally Posted by mordko View Post
    - XIU/ZCN - same kinda thing. Chose one (or XIC/VCN).
    - You are limiting yourself to Canadian stocks. Therefore, you are missing out on the 97% of the world market.

    You are very conservative but I guess you know that.
    Thanks for the feedback. You have me figured out.

    Here is an alternate asset allocation for the stock component: 12% ZCN, 6% VTI, 7% XEF

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  5. #114
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    As mordko says, XIU and ZCN are redundant, just choose one. You should also widen it beyond Canada. I would add either ZSP for US exposure or XAW for US&world (pick only one of these). So you'd end up with something like XIU & XAW for your stock exposure.

    The rest of it seems fine to me. It's very similar to how I'm invested. Remember to rebalance every year because part of the benefit of the PP comes from rebalancing the volatile assets.

    For the GIC ladder portion, you might want to stagger them so that a GIC matures every 6 months. This will make it easier for you to rebalance.

  6. #115
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    Better. Now you are just missing out on Emerging Markets. Also your Canadian allocation is half of your stock portfolio. Still too high. Canada is very focused on 2-3 industries. Not enough diversification.

  7. #116
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    Quote Originally Posted by mordko View Post
    you are missing out on the 97% of the world market.
    In my opinion 60% of the world market is worth missing out on...


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