Monday, February 17, 2020

Podcast Episode 7: The Permanent Portfolio - Automating your Investing

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Decide which assets you want to hold
Assign each asset a percentage of your portfolio
A permanent portfolio is composed of equal parts stocks, bonds, gold, and cash.
Periodically rebalance your portfolio
The idea is that when one asset class goes up and another goes down, you harvest profits from the one and put it in the other. This way you are always buying low and selling high.
Suggested to rebalance once a year
I have an algorithm that rebalances constantly
Algorithm to determine what price you should buy or sell the item for
You need an average of what the price normally is
The more you have of an asset the lower your price will go
The less you have of an asset the higher your price will go
Your buy and sell prices should have a spread. Mine is at 5% right now.
The lower the spread, the more you will be buying and selling. But you make more money on the swings
The higher the spread, the less you will be buying and selling. You make less money on swings

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