Permanent Portfolio

Overdue Permanent Portfolio report

It’s been a while already, I simply didn’t had the time and energy to blog. Sickness from colleagues which combined took well over five months left me with little option then work, eat and sleep. We’re gettinga bit to normal now and I think there is an Overdue Permanent Portfolio report somewhere.

My last report was March 2012, so what happened during that year? Well, obviously last five months little has been done, except last month I ramped up my investments. Growth of my total assets went quite well and I’m well above the benchmark I set myself. Today this is the state of my assets:

Amount Percentage
Stock 24.33 17.54%
Bonds 9.72 7.01%
Cash 100.15 72.2%
Gold 4.50 3.25%
Total 138.71 100.00%

In short, my assets have grown with about 39% in 3 years an 5 month since I started this little experiment. When I put my assets in a graph (I have tax data going back much further) per year, I notice dissappointing fact. The graph is more lineair than exponential, with a bit of fantasy a little bit it curves upwards. For privacy reasons I won’t show you that.

Lineair is not the curve I want, even though the results are above my benchmark. So what happened? Obviously I save as if my life depends on it, that means in the first years my savings will cause most of the growth (that is about 10 years ago). As my assets start to expend quickly, and my income not so, these savings won’t add that much relatively as time goes by. But what about interest on your saving account? Alas, thanks to the ECB interest are at an all-time low.

I need more yield!
Low interest and limited saving mean slow growth. This asks for drastic action. For the last month or so I started buying more investments. I’ve added more since March 2012, but now I’m speeding up buying. For now I keep to bonds (mostly High Yield) and conservative dividend stock funds. Commodities seem to be in a slow but steady decline, so I wait a bit before adding those.

At the moment interest is almost half that of inflation in the Netherlands (unlike the rest of EURO-land). Savers are being fleeced, for at least wo years now. Most of the inflation is caused by increased taxes and it doesn’t look as if these increases will stop. Therefor I want decrease my cash, at least to 25% at the end of the year, preferably 10%. Hopefully I’m able to bump up my income from my assets and start to accelerate the growth of those assets a bit.