These funds do serve a purpose but as always you have to be right twice when to get in and when to get out. Most people are not right that many times in a row.
In a taxable account with large gains, selling half of your equity position even before a bear market can be very expensive. Everyone knows that over a prolonged period equities will rise again, but each individual has to decide what their holding period is. AAII says 4 years will make you whole again. But that does not account for 1929-1933
In normal times bonds will work
http://awealthofcommonsense.com/2018/01/even-with-low-returns-bonds-still-have-their-use/
But with interest rates this low there may not be much protection
It is not easy

FYI: Plenty of things could upend the two-year rally in emerging-market equities. Yet no one seems to agree on just what they are.
Sure, the bulls abound. Fiera Capital Corp., the Montreal money manager that oversees $123 billion, expects attractive returns for several more years. Research Affiliates, a sub-adviser to such firms as Pacific Investment Management Co., calls emerging markets the " trade of a decade."
Yet contrarians are sounding the alarm, with Morgan Stanley the latest, saying that emerging equities may see a repeat of the year 2000, which began well and ended with a 32 percent drop. Here are five potential causes for concern:
Regards,
Ted
https://www.fa-mag.com/news/gundlach--goldman-sound-warning-on-emerging-market-stock-rally-36653.html?print

Of course that was never exactly Lynch's advice, more 'understand what you invest in' ---
https://www.investopedia.com/articles/stocks/06/peterlynch.asp ---
and he did often say things like 'know what you own and know why' etc.

Investopedia is describing stock investing (as one can tell from the URL). Investing in sectors/industries is a little different - one does not dig into the balance sheets of scores of companies.
I'll let Mr. Lynch speak for himself regarding how his oft quoted advice applies to stocks and to sectors/industries:

“I’ve never said, ‘If you go to a mall, see a Starbucks and say it’s good coffee, you should call Fidelity brokerage and buy the stock,’” Lynch says, some 25 years after his retirement ... “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.”

and

“If you’re in the steel industry and it ever turns around, you’ll see it before I do.”

https://www.marketwatch.com/story/peter-lynch-25-years-later-its-not-just-invest-in-what-you-know-2015-12-28 (originally in WSJ.com)

Hi @Mark
Agree.
I read, last week, the initial article linked within the "Reformed Broker" link. These changes will possibly affect some funds and/or indexes. Regardless of the "new" category names, the tech. has been inside of many funds and indexes of many equity flavor types.
Ted asked me (Jan. 6) about our holdings seeming to be "lite" on the tech. side; and the below is a broad sample of choices I grabbed to indicate the overall inclusion of tech. in so many places.
>>>Reply: Correct at this time, as to no direct "tech" holding; but with the broad based etf's and/or funds one will discover enough tech. of some form; mostly of the large cap. type and of course, the FANG kids show up just about everywhere, except a bond fund. Tis everywhere in some form.
A few samples of various tech. inclusions by percentage of the fund:
--- ITOT = 24%
--- VTI = 25%
--- SPY = 26%
--- FHLC = 25%
--- ACWI = 21%
--- FSPHX = 32%
--- GPROX = 21%
--- FPURX = 28%
I've been in and around tech. all of my adult life; and have always kept an eye to this area. One of my first exposures to the early life of what is nano and micro tech. today was a week of training of "how to remove and replace a defective integrated micro chip".
The class was taught by a NASA engineer from Houston. A micro what? These were mostly the 8 leg variety that had just begun to be used on integrated circuit boards in the newest versions of cryptographic equipment; the repair of which would be my livelihood for the next several years, and indirectly connected to me to a few folks that fully triggered my investment perspectives and forward directions.
ADD: I'm inclined towards large cap. tech., with mergers and acquisitions, but this may play well towards the smaller cap. companies.
Take care.
Catch

What’s the virtue of a 10 year period? Seems too short on which to base any financial theory or lesson. But, over 100 years, Yup - the low cost passive fund should win out.

Thanks @MikeM,
I think I agree with everything you said there Mike. I’d just as soon play the tables in Vegas as own much gold. Hold it indirectly through several funds of course, but as far as dedicated p/m funds go - perhaps 1 or 2%. Don’t know how PRPFX gets away with it - but far less volatility than I’d expect for a fund with 25% in precious metals.
Yes - I did own both HSGFX and HSTRX for a few years in the 2000-2005 period. The latter was actually a pretty good fund and is the one I remember holding around 10% in gold and p/m shares.

Thoughts followed by explanations:

• I'm not fond of using global in lieu of foreign + domestic
• The funds listed are all good but are all of one type; you might want expand your search
• VMVFX is rare, if not unique, for good or for bad

Companies that invest internationally pay foreign taxes. In most cases, including most global funds, they declare your net income after those taxes on your 1099, and so you pay taxes (in a taxable account) on your net earnings. But if over 50% of a fund is foreign and if it chooses to do so, it can declare your gross income (before paying those taxes) on your 1099, and give you a foreign tax credit.
If you just deduct that amount, you're in the same place as if the fund itself had just declared your net income. However, you also have the option (in a taxable account) of getting a dollar for dollar credit - that's worth more. Many if not most global funds don't give you this option. Foreign funds do.
I prefer to invest in foreign funds (to control foreign exposure on the portfolio macro level) and domestic funds with a good slug of foreign companies (to enable fund managers to tweak my foreign exposure). That way I get the benefit (some would say drawback) of delegating tactical foreign/domestic allocation to fund managers, while maintaining control over the larger picture.
All three funds mentioned are off the (M*) chart on the growth side, and nearly off the chart in average company size (giant). Which explains their appeal to Ted. This part of the market has done so well for so long that it's easy to forget there are other companies out there.
Here's an article (with lots of numbers) on the Fidelity site that compares value and growth performance (domestic only) between 1990 and 2015 (26 years). If you don't want to read it, just look at Table 2 - it measures outperformance of growth or value (in basis points) in rolling five year periods. From 2005 on, growth "won" virtually all periods. Yet over the 26 year period, value came out better on average.
https://www.fidelity.com/learning-center/trading-investing/trading/value-investing-vs-growth-investing
On the value, and somewhat smaller cap, side, you might look at PGVFX. Exclude 2017 and its five year performance (2011-2016) matches that of MGGPX, with significant stretches of differing performance (sometimes better, sometimes worse). You can see that clearly from this chart. The point is that there's more to investing than giant cap ultra growth.
Some funds tend to drift from domestic to global over time. Some of the Mutual Series funds did that. MDISX renamed itself from Discovery to Global Discovery, MQIFX changed from Qualified (originally designed for tax-qualified accounts) to Quest. Both were originally domestic value funds. I'm not suggesting those.
Another fund, this one worth considering, that is following a similar arch is FLPSX. While M* still classifies it as a domestic fund, it may be the widest ranging fund you'll find. Which may be part of why one looks at global funds. Foreign stocks and domestic stocks each comprise 40%-50% of its portfolio (with more domestic). ARTRX has a very similar ratio, though its domestic allocation is a tad higher, just above 1/2. PRGSX is even more domestic, with 58% of its holdings onshore.
Finally, VMVFX is an oddity because it is a hedged fund. It launched as the dollar was rising smartly, so that hedging contributed significantly to its outperformance. This is not to say that it isn't a fine fund, but that one where the numbers must be scrutinized more closely when comparing with other funds.

If you trend GLD and PRPFX, the 2 move in tandem. So, it could be argued PRPFX is a conservative way of owning gold, I think. I think you would own a fund like PRPFX for the same reason you would own a conservative balanced fund like maybe GLRBX, although over time I think a plain vanilla fund like GLRBX would have been a smoother and more lucrative ride. But in any case, it all comes down to being comfortable in how it fits your portfolio view.
What does that mean, PRPFX was "over-weight" gold? The weight within the portfolio doesn't change.

Mostly valid points @MikeM ...
With a combined 25% benchmark weighting to gold and silver, PRPFX will respond more to price changes in those metals than most funds having little or no exposure. Metals tend to be wildly erratic “assets”, which explains your preference at one time for this fund over owning GLD or a dedicated p/m fund. A bit like adding some water to your single malt to dampen the effect. I placed assets in quotes because there was a good thread here about 5 years ago debating whether gold should even be considered a “financial asset”.
Sounds like you had a reasonably good experience with PRPFX and moved out when momentum reversed. As with any open-ended fund, heavy selling by shareholders over short periods can ding returns, hurting those who stay behind - but there’s no way that I know of to prevent them, and I've occasionally engaged in the same practice to lock in a quick gain.
Adding a volatile investment to an otherwise conservative fund will affect returns during both the up and down cycles. Hussman, for example, once held significant mining shares in HSTRX. On the surface it appeared a mild mannered income fund. But in 2007 it outpaced the competition with a near 13% gain; than lost 8.37% in 2013. Suspect you’ll find those numbers track the performance / underperformance of GLD. (If memory is correct, p/m shares represented near 10% of the fund at times,)
I’ll go out on a limb and say I like gold / miners at the moment. In part that’s because most everything else appears so expensive. That said, timing the metals is a fool’s errand and I have 0% confidence in my outlook. Consequently, I currently maintain only a “token” foothold in a dedicated p/m fund.
Re “Overweight” (First mentioned in this thread by @PBKCM):
Unless a fund rebalances every day, rapidly rising prices for a particular asset might move that asset to a temporary overweight position relative to benchmark - until the manager rebalances. Don’t know how frequently PRPFX rebalances, but doubt it’s every day. So I’d expect that the fund went temporarily overweight gold for a stretch simply because it was appreciating much more rapidly than the fund’s other assets.

In a slightly related area, BFOR, the "GARP" ETF that follows the Barron's 400 index, failed to keep up with the S&P 500 in 2017. I haven't owned it for more than two years. However, I have found the M* wide-moat ETFs, the domestic MOAT (+23.16%) and the international MOTI (+30.16%) to be thoroughly rewarding funds to own.

Hello.
This is Old_Skeet's market barometer report for the weekending January 12, 2018.
Last week, I reported that the 500 Index was overbought with a reading of 134. This week the barometer dropped six more points to a reading of 128 which falls into the extremely overbought area on the scale. With this, it seems investors have been buying in advance of an anticipated strong 4th quarter earnings reporting season. Generally, a lower barometer reading indicates there is less investment value in the Index over a higher reading. Last year the lowest recorded barometer reading took place during the Trump Bump with a reading of 131 for the weekending of 2/24/2017.
For the week short interest for SPY was up from 2.7 days to cover to 2.8 days.
Within the major sectors of the 500 Index the lead pack consisted (as the week ended) of XLE, XLF & XLY. XLK faltered and has now dropped back form lead pack status and was replace by XLF. Within the lead pack my money hound remains XLY (and has been for some time). Back in late fall I put money on the Christmas shopper and with the new tax overhaul package that has recently become law the consumer seems to still be spending.
Within the global compass the lead pack consisted (as the week ended) of GSP, EWJ & VTI. EEM has now begun to falter and was replaced by a new hound VTI. My money hound remains GSP (commodities) and has been for some time. It has had a good run but I'm thinking this might follow a seasonal pattern soon to be ending. I'll stay with it as long as it is a good producer and might declare it a keeper and move it to the speciality sleeve from the spiff sleeve.
I am currently only putting spiff investment money on one hound at a time within each compass as I limit myself to only three open spiffs at any one time within my portfolio. However, another strategy that I have used in the past is to put investment money on each hound found in the lead pack. Since, the lead hound investment strategy is meant to complement other portfolio positions in the form of special investments (aka spiffs) I am at this time investing only in the lead hound strategy. I let my investment remain on the money hound(s) as long as they can maintain lead pack status. Should a money hound began to falter and fall from the lead pack then the investment is closed and a new investment position is opened on another lead hound felt to have good legs. Thus, it becomes my new money hound.
The process, for me, continues until I get tired of watching the hounds run or the investment momentum is lost and I close out the spiffs.
Another strategy listed above by @MikeM known as the Leadership Strategy was used by Old_Skeet for a number of years. I moved away from it because it mostly centers around a a style oriented strategy plus a few other holdings. I favor the sectors of the 500 Index and the holdings of the global compass over it because my strategy takes me back to my days (many years ago) where I'd do some weekend betting at the dog track.
My dog track strategy (years back) was that I'd bet three dogs in most races to win, place or show. This gave me a good number of chances to have a dog, or dogs, place in the money. Generally, I only bet the first eight races as I found the later races harder to pick the money dogs.
Reminder, both the stock and bond markets are closed on Monday for Martin Luther King Day.
Thanks for stopping by and reading.
Have a good holiday weekend ... and, most of all I wish each of you ... "Good Investing."
Old_Skeet

"A bipartisan group of U.S. senators met with administration officials this week to discuss legislation to spend $1 trillion to improve infrastructure."
That sounds like the Donald's campaign promised that he walked back many months ago. CNN recently reported: "A White House official said on Tuesday the current proposal -- set to be unveiled in the middle of January -- would propose spending at least $200 billion on infrastructure projects over the next decade, with the hopes of spurring an additional $800 billion in state and local funding."
That's just $20B/year. To put that in perspective, $20B is about what he'd like to spend on protecting American shores. Not from rising tides and water surges and intensified storms in the decades to come, but from surging immigrants. That's also about what it may cost to build a few miles of subway in NY (Second Ave. Subway - $17B and growing).
The article seems somewhat conflicted, saying on the one hand that "Engineering and construction companies are a late-cycle industrial play" (i.e. this is cyclical), and on the other hand that "You can make a multi-year argument that there is pent-up demand for things like waterworks and roads and bridges and highways,"
The need is there and has been there for many, many years. Even the full $1T would close only half the $2T gap (ASCE figures).
Late cycle might be an argument that in good economic times the government has more money spend on that need, but the government just added an extra projected $1.46T to the national debt over the same ensuing decade. So it's not clear if even $200B let alone $1T could be budgeted.
I think infrastructure is a good niche to invest in for the long term, but IMHO the way to do it is with global funds that can move money back to US companies if and when the US gets its act together.

Howdy folks,
I have owned PRPFX for going on 20 years. However, I do so considering it one of my core holdings. It's about 7% in each of three different accounts. I recognize that I could build it myself and do better but I'm lazy.
I do NOT see PRPFX as a substitute for gold or silver precious metals. Folks, you know me. I have been preaching for many years that everyone should have some small percentage of precious metals in their overall holdings: 3-10% depending upon your bent. More that this is always speculation.
That said, with some of these types of assets, you really have to go from asset allocation in an account to overall wealth allocation. Recall the Elder Baron R saying that to protect yourself though economic bad times, you should have 1/3 of your wealth in securities, 1/3 in real estate and 1/3 in rare art (define as you wish but it ain't Beanie Babies).
I would caution you folks to get some paper towels ready to wipe your screen before you run your own numbers.
and so it goes,
peace,
rono

Currently helping my in laws rebalance their portfolios. They had no international exposure or bonds. Trying to figure out what the best t rowe price fund/funds to put them in since they have no brokerage window there. A bunch of options I'd put them in typically are closed.

Howdy,
Wifey and I have been at TRP for over 20 years. My rollover IRA is a brokerage account, hers is not.
I've used PREMX and RPIBX forever. Nothing fancy but when I'm advising someone I always lean to the cautious side. I can and have been bat-sh*t crazy with some of my investments but not for others.
and so it goes,
peace,
rono

"Tip: The retirement years pass by much faster than the work years."
Man, tell me!

@MikeM ... Nice work planning for your retirement. I can’t offer much help because my unorthodox manner has been to run the whole thing in “slow-mo” (conservatively positioned) so that even withdrawing a larger sum during down year(s) won’t ding me too badly. Perhaps it works better for me because of my steady pension or modest lifestyle. Don’t know. But no cash reserve beyond what’s committed to cash in the investment portfolio. Generally, I use distributions to rebalance things out. I don’t recommend this for others.
But I’d say you are on the right track based on some of the sharper people I’ve followed here or spoken to. Good job. The approach you are exploring is much more typical. And I suspect you are doing a much better job than most are at this stage.
Tip: The retirement years pass by much faster than the work years.

Love the concept. But PRPFX has really stagnated since gold topped in 2011.

@PBKCM,
It’s quite easy for me to check the fund’s recent performance, since I converted 100% of my holdings to a Roth on 1/04/16. As of today’s close (1/11/18) the fund has generated a 25% gain in just over 2 years. Coming right after a conversion, I couldn’t be happier. I often noted my trades / activities in the buying and selling threads in the past. If anybody cares to check the January 2016 pages they should come across that conversion date.
You are correct that the fund dropped off a cliff for a while. It was bound to happen. Hot money had poured in for several years as the fund’s (rather modest) gold and silver holdings propelled it higher than most other allocation funds. Folks seemed to feel they’d discovered a low risk way to make a lot of money fast. Of course, there is no such animal. When metals started backsliding (entirely predictable) these fly-by-night investors bailed enmass and moved on. It was at that time, with the price depressed, that I opened a small position in the fund and than averaged in over the next 2-3 years.
-
@LLJB - The Hierarchy of Disagreement
- Friendly (No sweat)
- Mild (Let’s agree to disagree)
- Considerable (You must be off your rocker!)
- Serious (Take a long walk on a short pier why don’t you?)
- Nasty (unprintable)
So with only a “mild disagreement” there’s no cause for concern.
:)
Regards

I believe Schwab's MM is at 1.2 or 1.25 now. I met with my Schwab guy yesterday and we talked about setting up a "safe-bucket" of 4 years needed withdrawal income when I start retirement. We both agreed setting up that bucket (still as an IRA) at an on-line bank like Ally or Synchrone would give slightly higher rates, maybe in the 1.3 range, and also have the CD option available. In any case, that is what I will be doing.

Recently, for my commodity exposure, held in my spiff sleeve, I went with PCLAX (and, it sports a 12% yield). It's Morningstar report is linked below. The fund has a number of share classes. Listed for review are the A shares. Years back I owed it's cousin fund PCRAX and, for me, it was a good performer.
http://www.morningstar.com/funds/XNAS/PCLAX/quote.html

Here’s how PRPFX invests:
Gold 20%
Silver 5%
Swiss franc assets 10%
Real estate / natural resource stocks 15%
Aggressive growth stocks 15%
Dollar assets 35%*
Total 100%
* Includes U.S. Treasury Bonds
I’ve had a mild (long running) disagreement with @LLJB who believes one should buy the assets, originally promoted by author Harry Brown, directly rather than paying Michael Cuggino a higher fee to do that for you. I agree - except that I’m not aware of a single poster ever who claimed to be doing that. I’m lazy. The thought of having to buy, transport, store and insure physical bullion, buy and sell stock ETFs, play in the international currency arena and do the regular record keeping (including taxes related to international currency trades) is daunting. Saying the fees are high in no way addresses the issue of diversifying across asset classes, which is what the fund’s about.

@hank, thank you for saying "mild" :), especially since I'm not sure we disagree as much as you think and because I far prefer sharing my opinion and letting everyone else decide what's best for them than attacking the choices people make because I think my opinion would somehow suit them better.
Anyway, I wouldn't suggest buying the assets that PRPFX holds in any way. It would be a pain as you highlighted and you'd always be months behind since they only have to be transparent once each quarter. My suggestion would simply be to allocate 25% each to equities (VTI), long-term Treasury Bonds (TLT), gold (I prefer IAU) and cash. Someone could certainly choose different etfs in order to have some foreign and/or emerging markets equities or to have shorter duration bonds if they have opinions about the direction of interest rates but that's a question of personal preference, confidence, goals and willingness to keep records. Speaking of record keeping, I think for years now brokers are required to report the cost basis of your transactions so the only real need to keep records is if you prefer to verify the accuracy of your 1099, which I do. I would rebalance once each year because the mutual fund must rebalance at least that often and your expense ratio using the etfs I mentioned would be 0.11% compared to the current 0.82% for PRPFX.
Just as a what if I also tried to duplicate the PRPFX allocations and back test the performance. I used IAU for gold, SIVR for silver, EWL for the Swiss stock market, IYR and IGE (7.5% each) for real estate and natural resources, RPG for aggressive growth stocks, TLT at 25% for long term treasuries and VTI at 10% for the remainder of dollar assets. The physical silver etf only became available in Aug 2009, I couldn't find anything else older and I didn't want miners, but my attempt returned 9.83% annually with a max drawdown of 8.79% and a worst calendar year of -4.49% while PRPFX returned 5.76% annually with a max drawdown of 12.52% and a worst year of -6.58%. I only rebalanced once per year which I'm sure made some of the difference and my expense ratio was 0.28%, which also helped. My use of IGE for natural resources probably isn't how they do things either, its sort of like buying physical gold vs. the gold miners, but it was simple.
Hindsight is always 20/20 so I'm certainly not trying to suggest my options are somehow better or that they will be better in the future, but if someone's interested in a risk parity approach then I think its worth considering the options. In fact, if someone wanted life made easy, people have created motifs at Motif Investing where you can follow the Permanent Portfolio or Ray Dalio's All Seasons Portfolio as a basket of stocks, something like a mutual fund without all the compliance requirements I guess. I've never used Motif so I can't say anything good or bad about it, just that I'm aware it exists and how it basically works.

Fund flows bother me a lot. They wreck havoc on a lot of funds. Look what happened to MFLDX as “investors” fled. And I’m aware PRPFX has suffered due to the fund’s huge investor exodus after gold cooled. Heck, management discussed the rapid decline in asset base in their fund reports about 3 years back and considered altering the fee structure (though I don’t recall in what manner) as a consequence.
Umm ... I’m a little sensitive on this point being a docile, long term, buy and hold type. And would prefer the “hot money” stay away from the funds I own. PRPFX is not a gold fund. Folks who want a gold fund should buy one.
Here’s how PRPFX invests:
Gold 20%
Silver 5%
Swiss franc assets 10%
Real estate / natural resource stocks 15%
Aggressive growth stocks 15%
Dollar assets 35%*
Total 100%
* Includes U.S. Treasury Bonds
Where I have a (I hope friendly) disagreement with @bee is in posting the fella with the seedy suit and bad hairpiece who’s using scare tactics to promote buying of gold and than somehow trying to link what he’s peddling to the Permanent Portfolio Fund. I see no connection whatsoever between his snake-oil pitch for gold and how PRPFX invests.
I’ve had a mild (long running) disagreement with @LLJB who believes one should buy the assets, originally promoted by author Harry Brown, directly rather than paying Michael Cuggino a higher fee to do that for you. I agree - except that I’m not aware of a single poster ever who claimed to be doing that. I’m lazy. The thought of having to buy, transport, store and insure physical bullion, buy and sell stock ETFs, play in the international currency arena and do the regular record keeping (including taxes related to international currency trades) is daunting. Saying the fees are high in no way addresses the issue of diversifying across asset classes, which is what the fund’s about.
Than there’s David Snowball’s very well documented commentary (roughly a decade ago) analyzing Cuggino’s returns across asset classes and finding the performance lacking. I can’t argue with that. I doubt Cuggino excels as a stock picker. If that’s what you want, invest in a proven equity growth fund. And his dismal results for his short term Treasury fund are easily retreivable. Again, if you want a top income manager, invest with one.
All this said, PRPFX does invest across multiple asset categories. If you like those categories as a diversification tool and don’t want to go through the trouble of investing individually in each asset class, than it’s a decent fund.