The Permanent Portfolio, Investing, Finance and Random Thoughts.
A New Permanent Portfolio Book Is On The Way!
I am happy to announce that forum co-moderator Medium Tex and I were contacted many months back to write a book updating the Permanent Portfolio strategy by a major publisher. While the strategy itself is simple and timeless, many new investment vehicles to make the portfolio more accessible have opened up over the years since Harry Browne’s passing. Additionally, many changes in US laws have made some of the advice (such as geographic diversification) more difficult for investors.
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Permanent Portfolio Book Announcement List
Medium Tex and I thought that an update would be a good idea and accepted the challenge. The book will be coming out later in the year in both print and electronic form. The manuscript of the book is well under way and we are announcing this book to not only let you know that it is coming, but also to let you give us input on topics you’d like to see specifically covered in the book. The book will address the following topics in detail:
Foreword
Introduction
Chapter – Our Stories
Chapter – 16 Golden Rules of Financial Safety
Chapter – Permanent Portfolio Performance
Chapter – How To Make Money In Investing
Chapter – Investing Based on Economic Conditions
Chapter – Stocks
Chapter – Bonds
Chapter – Cash
Chapter – Gold
Chapter – Implementing the Permanent Portfolio
Chapter – Rebalancing
Chapter – Tax Deferred Accounts and Tax Management
Chapter – Geographic and Institutional Diversification
Chapter – The Variable Portfolio
Chapter – The Permanent Portfolio Fund
Chapter – Appendix and Resources
The book will contain not just updates to Harry Browne’s ideas onto today’s markets. But it will also have detailed and complete reviews of less orthodox but important topics such as geographic diversification techniques for today and more. While we feel that Harry Browne’s previous books stand on their own in detail and clarity. We believe this book will carry on his tradition of sharing information to protect investors in any markets, no matter what the future brings.
Please feel free to offer comments on what you’d like to see covered to make this book something that will help you. I will keep you updated on the publication date and where you can order a copy when it is available. We are excited about this book and hope you will be, too.
Thanks!
Related posts:
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#3 written by D Johnson 4 months ago
I echo the positive comments above and the topics but add one.
Eventually investors will want to remove funds to live on. Can you recommend ways to do that while maximizing the long term health of the PermPort.
In a similar vein, managing the process of having the proceeds go to a trust at death.
These topics may be outside your expertise, so I’ll end saying that I look forward to the new book and wonder if you have a place to sign up now.
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#7 written by Jorge 4 months ago
Great news Craig. Any plans to sell the book in the UK?
I would like to see the risks involved with ETFs, specially with gold. Also, what alternatives are available if your pension (or 401 in the US) doesnt have any gold funds available?
Keep up the good work in your blog. I really enjoy reading it.
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We will sell anywhere there is demand. I suspect Amazon UK would sell it and there is always electronic versions available for e-readers.
We will cover some of these risks. We will talk about gold and keeping it outside retirement plans. This is the preferred way to keep it accessible in an emergency.
Thanks for posting your input.
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#9 written by EdwardjK 4 months ago
Craig,
Congrats on the book deal. Please consider the following topics for inclusion:
1. I only became aware of the PP a few years ago and plan on retiring in about 2 years. Does adopting the PP make sense in retirement? Or should an investor adopt the PP only during their working years?
2. The PP can be adopted using ETFs. What are the +/- associated with using leveraged ETFs for all four components (like a 2x gold ETF) ? I believe this idea was mentioned on one of the Crawling Road boards.
3. Why isn’t the Permanent Portfolio mutual fund (PRPFX) the best method to implement the PP?
4. With all your wealth, experience and belief in the PP concept, why haven’t you created a true PP mutual fund or ETF?Thanks
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#10 written by Dan Martiuk 4 months ago
Looking forward to the new book. I implement the strategy, as well as modifications internationally. I use ETFs in Canada, U.K. & Switzerland as well in base currencies other than U.S. Dollars being CAD, GBP, CHF, etc.
No U.S.A. custodial arrangements as we require AAA rated banks as counterparties:
Canada
http://www.claymoreinvestments.ca/etf/product-list
http://www.horizonsetfs.com/pub/en/Default.aspxhttp://www2.morningstar.ca/covers/etf_ca.aspx?region=CAN&culture=en-CA
UK
http://www.etfsecurities.com/en/welcome.aspSwitzerland
http://www.csetf.com/disclaimer/en/ch/
http://www.lyxoretf.com/disclaimer/http://www.morningstar.ch/ch/etfs/default.aspx (German)
iShares has country specific websites as well.
Generally ETFs in the above markets not available to U.S. Persons and international banks are not generally interested in dealing with U.S. Persons due to new rules and regulations being introduced, i.e. FACTA, SEC, etc..
However your Non-U.S. readers may be interested in these non-U.S. ETF products.
If you wish to further discuss, please call me and I will be happy to share my knowledge of the ‘offshore’ world.
Best wishes for 2012.
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Some random ideas that may be interesting to explore in the book:
1) Exploring the idea of using leverage on the PP
2) Comparing PP performance vs. other popular investment vehicles, particularly Real Estate, Crude Oil, Base Metals, etc.
3) Comparing PP performance vs. other popular “Lazy Portfolios” out there.
4) Foreign investors creating their own PP and their respective performance in their own currency (Japan, China, Canada, Germany, etc.)
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EdwardjK:
Craig,
Congrats on the book deal. Please consider the following topics for inclusion:
1. I only became aware of the PP a few years ago and plan on retiring in about 2 years. Does adopting the PP make sense in retirement? Or should an investor adopt the PP only during their working years?I’ve been using it for early retirement. It’s been a life saver, frankly.
2. The PP can be adopted using ETFs. What are the +/- associated with using leveraged ETFs for all four components (like a 2x gold ETF) ? I believe this idea was mentioned on one of the Crawling Road boards.
No leverage! Ever.
If I talk about leverage it will only be about why it’s a really bad idea!3. Why isn’t the Permanent Portfolio mutual fund (PRPFX) the best method to implement the PP?
4. With all your wealth, experience and belief in the PP concept, why haven’t you created a true PP mutual fund or ETF?
ThanksA mutual fund or ETF is tremendously expensive and time consuming to start and operate. The expenses and compliance issues would require that a very high annual expense ratio be charged unless a very large asset under management were going on. So the idea sounds simple, but there are a lot of hidden things involved.
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Dan Martiuk:
Looking forward to the new book. I implement the strategy, as well as modifications internationally. I use ETFs in Canada, U.K. & Switzerland as well in base currencies other than U.S. Dollars being CAD, GBP, CHF, etc.
No U.S.A. custodial arrangements as we require AAA rated banks as counterparties:
Canada
http://www.claymoreinvestments.ca/etf/product-list
http://www.horizonsetfs.com/pub/en/Default.aspx
http://www2.morningstar.ca/covers/etf_ca.aspx?region=CAN&culture=en-CA
UK
http://www.etfsecurities.com/en/welcome.asp
http://tools.morningstar.co.uk/uk/etfquickrank/default.aspx?Site=UK&Universe=ETALL%24%24ALL&LanguageId=en-GB
Switzerland
http://www.csetf.com/disclaimer/en/ch/
http://www.lyxoretf.com/disclaimer/
http://www.morningstar.ch/ch/etfs/default.aspx (German)
iShares has country specific websites as well.
Generally ETFs in the above markets not available to U.S. Persons and international banks are not generally interested in dealing with U.S. Persons due to new rules and regulations being introduced, i.e. FACTA, SEC, etc..
However your Non-U.S. readers may be interested in these non-U.S. ETF products.
If you wish to further discuss, please call me and I will be happy to share my knowledge of the ‘offshore’ world.
Best wishes for 2012.Thanks, Dan. These are all great points. US Investors are unwelcome just about everywhere now. They are missing out on very good financial products in other countries as a result of Uncle Sam.
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Kyon666:
Some random ideas that may be interesting to explore in the book:
1) Exploring the idea of using leverage on the PP
2) Comparing PP performance vs. other popular investment vehicles, particularly Real Estate, Crude Oil, Base Metals, etc.
3) Comparing PP performance vs. other popular “Lazy Portfolios” out there.
4) Foreign investors creating their own PP and their respective performance in their own currency (Japan, China, Canada, Germany, etc.)Will do. Thanks for the input.
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#15 written by epsilon 4 months ago
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#16 written by Kyon666 4 months ago
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#17 written by Ellie 4 months ago
I’m very excited there will be an update to the book – I just recently finished it and was fundamentally committed to it but wondered how to go about it, as I assumed there were easier ways for numerous aspects than when the book had been written.
One nagging issue with me, not in regards to this book — people who care about their money and want to preserve purchasing power as well as grow their money probably, if they are like me, read many books on the economy and investing, and what I find personally is that many have some very solid ideas, while others can be shrugged off. And we always like to complicate things! And…although I love Wiley (not sure if that’s who you’re publishing with), I always get the sense the authors are selling me their services beyond the book, which, frankly, is off-putting. (So I’m glad to hear you’re not, beyond maybe personal financial coaching??? I think a hand-holding aspect is a great idea, a la Chris Martenson.)
Anyway, for instance, I will be implementing the Permanent Portfolio in the next couple months and among my questions:
1. I agree with having 25% in cash, but not necessarily U.S. dollars. A basket of currencies seems to make more sense to me, but which currencies and what part of the 25%? One of my new investing mantras is “I am a citizen of the world.” I may not be traveling much at this point in my life (mid-forties), which makes me forget there’s a whole non-U.S. world out there, but there is. I feel in my gut that I don’t want to be in all US dollars, so what to do?2. Emergency money – does that count as part of the 25% cash, or is it separate? Need that be in U.S. dollars?
3. Should we really be putting so much money into tax-deferred places? What should be in tax deferred vs. Roth vs. non-tax-deferred accounts?
4. Can/should Schiff’s advice be followed? An example of, is this guy just selling his own stuff? vs. he makes a lot of sense with owning foreign companies for dividends, etc.
5. Obviously, how to buy and store and own gold. As for the gold allocation, all physical gold, or gold mining companies, ETFs? Etc.
6. Given all the rotten apples on Wall Street, I hesitate using any one firm for everything, even though it would be simpler that way. How many accounts in how many places will this turn into, thus complicating what is presented as a pretty easy strategy? The question: How to keep implementing the strategy and simple as the strategy itself is?
Those are it off the top of my head this morning. So glad there will be an update to the book! If you’re looking for beta readers, I’d be happy to be one.
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#18 written by Will 4 months ago
Congrats! What I would like to see- a detailed analysis of the best arguments against the PP concept and allocations. That is, Clive’s comments, the consideration of other asset classes within the same cycles of the economy framework, ie. silver with gold, forestry with LTTs, etc. Making the book as intellectually curious as possible would be a real bonus, in the sense of a Peter Bernstein financial history book.
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#19 written by Diane 4 months ago
Can you please add advice for Canadians? I’m very anxious to start a pp but I’m hesitant as I don’t seem to have enough info on Canadian pp although there are some back testings that proved a Canadian pp worked as well.
Specifically what would be the Canadian equivalents to US pp (ETFs). Should we include some security in US currency, and US treasuries as cash portion. If so, what percent?
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#22 written by Bill 4 months ago
The new book must deal with the problem presented by the US Treasury Long Bond hitting a brick wall as it approaches 2%. The deflation protection provided by the long Treasury to a HB-PP will be lost at that point. (I am assuming here that once the return equals the inflation rate firther appreciation will be minimal at best). I believe Van Hosington sees it the same way and he has been the chanmpion of the long Trerasury for 20 years.
This is a problem that I dont believe HB ever had to consider but we must as the offsetting balance between the 25% Gold component and the 25% Treasury component will be lost.
I hope that you will review and evaluate the options.
Thanks, Bill
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#24 written by RT 4 months ago
i am excited about this book project and think that it can add a lot of value on top of what HB started.
i would suggest that it is particularly important to address the key differences in today’s world as compare to the world of 30+ years ago when harry started writing his books.
perhaps the two biggest ones, imo, which have already been stated here:
1) whether in today/tomorrow’s much more globalized world it makes sense to use multiple currencies rather than only your home country currency? if so, what is the best way to think about how to do that properly (what kind of mix and for which reasons)?
2) with long term interest rates being so low, can we expect 30 year treasuries to continue to provide meaningful deflation hedge? and if not, what is the best alternative?
neither of these questions have easy answers imo. i can see good arguments both ways for each of them. and each of them has a very different context in today’s world as compared to HB’s time. for these reasons, addressing them each thoroughly in the book would likely add significant value to HB’s foundation.
even if the right answer is to stick with HB’s original formula on these points, just having more confidence around that based on a solid set of logic and evidence would have significant value. if the answer is that some adjustment on these points is warranted then understanding that conclusion, and how best to do it, would have significant value.
RT
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Hi Craig,
This is great news! There’s too many comments to check for possible duplicates, but here’s what I’d be (additionally) interested in:
* Most important: Please publish a Kindle version of the book!
* Structuring the Permanent Portfolio for those living outside the United States. (I would say this is an extremely important subject nowadays.)
* Similar to the above, general thoughts on diversifying the PP in currency (now that the global marketplace — currency and government bonds, included — are available conveniently via ETF.
* Recommendations for brokerages outside the United States
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#26 written by robert 4 months ago
1) what would happen in the case of a total financial melt down, especially, hyperinflation, Treasury debt default.
2) Harry recommended Swiss banks based on liquidity and privacy. All of those banks have been absorbed by larger banks. Can you include a new list of liquid and reliable swiss banks? Also, can you address the debacle in Switzerland, with them handing over American account holder’s names to the IRS? Is Switzerland no longer a safe place for an American to hold assets? Are there other countries that are better?
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#27 written by RT 4 months ago
robert brings up a good point.
when the ***t really hits the fan, there is a too high (for comfort) a probability that the governments in the most trouble will resort to vilifying those who were smart enough to buy gold as protection well in advance.
like in the 30′s in the US, these governments may well resort to confiscation or punitive treatment (90% tax on gold profits, etc).
so a question to address in the book is, where are the top 3 places in the world to store your gold in order to mitigate this risk?
RT
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So many good points I can’t address them all here. But I will say that many of these topics are going to be covered. The material will be all up to date for today’s environment. The Swiss banking issue has changed radically the past 10 years. However there are new options and things to consider that can provide similar benefits of geographic diversification without too much hassle. Stay tuned!
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#29 written by Ray 4 months ago
Craig, I think you guys have done a terrifc job both on this blog and the message boards (including the longest thread of all time!) I have used this strategy for my dad’s retirement funds and my wife’s IRA as written, but modified it for my own, fully taxable, portfolio.
I’m invested 25% each in physical gold and equities, but 10% cash and 40% high grade intermediate term munis. I’ve exchanged posts with you before on this, but would be interested to see how a modification like this would compare historically to the original PP. For investors like me who are in the highest tax bracket and minimal deductions, taxable income hurts!
I’m not one for tinkering, but really feel this would be a viable chapter (well, maybe a page or two) to the new book. Thanks for any consideration and your time!
Ray
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#30 written by Diane 4 months ago
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Sounds great! A few topic I’d like to see:
- how/if the permanent portfolio makes sense with a 401k or IRA
- sample excel spreadsheet (maybe linked online or screenshots) that you use to track/rebalance your portfolio and collect data from your various brokerages etc
- mentions of specific funds or companies you use (perhaps linked online so changes can be made down the road)
- more discussion of the psychology aspect, for example deciding to take money out for a big purchase (home, car, etc)
Also, I like the geographic diversification info – this could really use an update. And (in the same vein) currency diversification.
Thanks! Looking forward to it.