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5% drawdowns are very frequent. ...

... I think that a 10% drawdown is pretty routine and will be seen once in a while. It should not surprise any of us to see a 10% decline this year even in this conservative portfolio.
I would agree & note 2 key factors.

First, my purchases this year will likely be at the lower prices - which is good.

Second, If the PP/PP+ is up to a -10% loss consider that most other balanced funds could be double that....

By the nature of the PP/PP+ my volatility is controlled. Yet, my opportunity to buy low is the same as all the other types of portfolios. Plus, over a 20+ year average my performance is basically the same as the Balanced Port without the pitfalls.
 

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Discussion Starter · #562 · (Edited)
First, my purchases this year will likely be at the lower prices - which is good.

Second, If the PP/PP+ is up to a -10% loss consider that most other balanced funds could be double that....

By the nature of the PP/PP+ my volatility is controlled. Yet, my opportunity to buy low is the same as all the other types of portfolios. Plus, over a 20+ year average my performance is basically the same as the Balanced Port without the pitfalls.
I wholeheartedly agree! Very good points. I am eager to buy some more this year at depressed levels.

The losses and volatility will happen, but it's all relative as you point out. I did a quick check yesterday and it now looks like my PP's performance over multiple years has matched Mawer Balanced Fund, which you'll recall is the star 60/40's. It seems the PP is doing as well over 5 yrs, but with half the drawdown this year so far.

And that is what I've always hoped the PP can do. Long term results similar to 60/40 but with milder volatility.


[ The numbers, if you're curious.]
Mawer Balanced, 5 years @ 4.7% CAGR, and YTD loss -11.9%
My PP+ formula, 5 years @ 5.2% CAGR, and YTD loss -6.0%
 

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Discussion Starter · #563 ·
What a crazy time. The PP/AW is losing money just like everyone else is. Still, there is a slight improvement over balanced funds.

PP variant #1, equal weights XAW, ZFL, CGL.C, cash/GIC
PP variant #2, my own formula

Year to date performance is
  • -17.5% in Mawer Balanced
  • -15.2% in VGRO
  • -14.7% in VBAL
  • -10.7% in PP variant #1, closest to Harry Browne's formula
  • -10.7% in PP variant #2, obviously quite similar to the original

That's an improvement over 60/40 and it's been less volatile as well. I'm not happy about losing money, but I'd still call this a win during market turmoil.

Additionally, -10% is still in the ballpark of a pretty typical and routine drawdown for the PP.
 

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-10% is still in the ballpark of a pretty typical and routine drawdown for the PP.
According to lazyportfolio.com, -10% is quite extreme since 1973? I am buying PP every week.

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