UPDATE #1: There is a new book to be published on implementing the Permanent Portfolio. Follow this link to read more about it and sign up for the announcement list: Permanent Portfolio Book

UPDATE #2: Please review to this link to see updates to the portfolio in later years. The portfolio still is returning in the 9.7% compound annual growth range since this page was updated. 

Permanent Portfolio Performance Tag

Let’s get to the meat of any investment strategy: How well does it actually work?

In a prior post we talked about the Permanent Portfolio allocation which is:

25% – Stocks (in a broad based stock index fund like the S&P 500)
25% – Long Term Treasury Bonds
25% – Gold Bullion
25% – Cash (in a Treasury Money Market Fund)

This allocation will provide protection when the economy shifts through the cycles of prosperity, inflation, deflation and recession.

Now, some may be thinking that this allocation sounds very different than what they’ve seen elsewhere. For instance, the idea of owning gold is scoffed at by some investment advisors because it has no dividends or interest. Long Term Bonds? Many will tell you that they’re too risky due to rising interest rates. How about Cash? Isn’t holding a bunch of cash missing out on the hot stock market action? And, only 25% in stocks? Well everyone knows that stocks always beat every other investment so surely you want more than 25%, right? Right!?

Not exactly.

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