Portfolio 60: The Permanent Portfolio

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vnatale
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Portfolio 60: The Permanent Portfolio

Post by vnatale » Wed May 17, 2023 3:30 pm

Best Investment Portfolios – 150 Portfolios Better Than Yours
https://www.whitecoatinvestor.com/150-p ... han-yours/

Portfolio 60: The Permanent Portfolio
25% Vanguard Total Stock Market Index Fund
25% Vanguard Long-term Treasury Fund
25% Gold ETF (GLD) or, better yet, gold bullion
25% Vanguard Prime Money Market Fund

Here's another popular portfolio, this one from Harry Browne. He felt you wanted a portfolio that would do well in prosperity (stocks), deflation (long treasuries), inflation (gold), and “tight money or recession” (cash). There are lots of variations. There is even a one-stop-shop mutual fund for 84 basis points that's been around since 1982 with 15-year average returns of a little over 6%. Not only did it lose money in 2008, it managed to do so in 2013 as well. Poor performance (4.8%) over the last decade while the US stock market has been roaring demonstrates its severe tracking error.


As I keep going down the list:


Portfolio 174: The Golden Butterfly
20% Vanguard Total Stock Market Index Fund
20% Vanguard Small Cap Value Index Fund
20% Vanguard Long Term Bond Index Fund
20% Vanguard Short Term Bond Index Fund
20% SPDR Gold Shares ETF (GLD)
This new-fangled portfolio from Tyler at Portfolio Charts claims to “match the high return of the Total Stock Market [Portfolio # 2] with the low volatility of the Permanent Portfolio [Portfolio # 60]”. I don't think it actually does that given its heavy emphasis on bonds and gold. Since TSM has outperformed all of those other assets classes over the last decade, there is no way this portfolio has matched its return in that time period. But I'm sure it has been less volatile.


Later in the comments one person had to say this regarding Larry Swedroe's portfolios:

"Thankfully, in a year or two, we’ll have moved on from this gimmicky portfolio approach just as we have with the Permanent Portfolio and so many others. And another 10,000 authored posts on Bogleheads discussing the “Larry portfolio” won’t change this a bit."



In another post in his blog he does have this on The Permanent Portfolio where he, of course, exhaustively analyses its advantages and disadvantages.


The Permanent Investment Portfolio
https://www.whitecoatinvestor.com/the-p ... portfolio/


I'll be reviewing several different fixed asset allocation portfolios in the next few months, pointing out their pros and cons. Each investor ought to develop his own asset allocation and stick with it, rebalancing to maintain appropriate risk levels. The first portfolio I'm going to review is called The Permanent Portfolio. This portfolio consists of the following asset classes:
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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