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Permanent Portfolio Message Board

  • hokirob hokirob May 23, 2012 6:31 AM Flag

    Gold holdings

    The top three holdings on this one are basically "gold" in different forms. Does anyone have any good information on the diversification of those three -- it just doesn't seem like it could be material (maybe versus currencies, but they're just "gold, gold, gold".

    Gold Bullion Comex Eligible at 6.83% (not sure how the YTD return is 22%)
    Gold/US Golden Eagles at 6.45% of holdings
    Gold Canadian Maple Leaf at 6.41% of holdings

    So, seems like "Gold" adds up to 19.69% of holdings here. I'm missing the diversification advantage.

    Finally, going forward, with GLD tracking negative for the year, is PRPFX going to drag with it?

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    • It's a conservative core fund, meant to be held for years, if not decades. Hence the name "Permanent" Portfolio.

      The long gold run up has spiked the performance, but that is over now. PRPFX will continue to perform slowly but surely. The point in owning this is it is not prone to wild swings, so you are more likely to hold rather than sell, knowing a bear market won't hurt you too much.

      I guess my best definition of this fund is it's a solid play on human nature!

    • I agree. For whatever reason when the European economy looks shaky people do not put their money in gold but rather in the US currency and the price of gold goes down. I think the bigger question is how well will this fund do if the European economy tanks? Swiss francs and gold likely will not keep this boat afloat.

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