I must say, this is the first time I've been critiqued for basing an analysis on
too much data. ;) But seriously, I get it. The issue of gold behaving exuberantly in the early years and potentially skewing the data concerned me as well until I also looked deeper.
When the gold standard was eliminated, gold did go on a huge run for three years before correcting in 1975 (falling 28%). So for argument's sake (and to be conservative starting in a big negative year for gold) let's look at the data starting in 1975.
Arebelspy is correct -- the way the chart works, changing the start date leaves all of the individual cells completely unaffected. In fact, the primary purpose of the "Pixel" chart is to see beyond a potentially deceptive average based on a single arbitrary time frame. It lets you study the big picture of
every investment period at a glance.
In any case, I took the liberty of recalculating the long-term stats on the right to only look at the 1975 start date*, and the numbers are basically identical to before and within normal statistical noise. Averages for any portfolio naturally move up and down a bit based on start year, but I wager the difference here is a lot less than many people expect with the early gold years left out. Exclude the early 70's from stocks, for example (as far too many people do), and you conveniently miss some really horrible years and the averages look a lot more rosy. That consistency
regardless of start date is one of the factors that attracted me to the PP in the first place.
(*)BTW, if anyone wants to find the specific long-term CAGR of their own asset allocation with any start year and any duration, here's how to do it. Fire up the
Pixel calculator. Enter your asset allocation. Now hover your cursor over the cells of the chart. Voila!
Regarding Safe Withdrawal Rates, I think it's important to reiterate how they work. I use the more conservative Bengen SAFEMAX methodology which finds the single worst safe withdrawal rate over all possible starting years (that I have data for). Removing data points can never lower the SWR. FWIW, I double-checked the data and excluding 1972-1974 makes no difference to the SWR. The single worst year to retire with the Permanent Portfolio was in 1980, well after the initial gold rush.
So even if you don't believe that the early 70's gold performance is likely to repeat (I certainly don't), I personally don't think starting in 1975 changes the PP outlook.
All that said, everyone is free to make their own decision given the relevant data, which is why I launched the site in the first place. If you simply hate gold as an asset and don't trust it, great! You won't find any argument from me. Browse the myriad of other
well-diversified portfolios with no gold and look at their impressive performance as well. The Permanent Portfolio is just one of many good options based on Modern Portfolio Theory. As I tend to repeat, there's so much more to portfolio construction than calculating your percentage of stocks and bonds!
Hope that helps.