Follow-up Question: 🤔📈 Thoughts on holding Commodities ONLY in a Variable Portfolio?

[frugal]

Hello PPeers,

Building on the Browne vs. Dalio comparison, I’ve been thinking about the "Commodities" gap.

In Dalio’s All Weather, commodities are a core structural component (7.5%) to hedge against supply-shock inflation. However, in Browne’s Permanent Portfolio, he famously excluded them, arguing that Gold was sufficient for monetary inflation and that the PP should only contain "clean" assets with no carrying costs or decay.

Browne’s rule was: if you want to speculate or tilt towards a specific sector (like Energy or Ags), do it in your Variable Portfolio (VP).

My question to you all:
Does it make sense to keep the Permanent Portfolio "pure" (25/25/25/25) and only hold a broad Commodities ETF (or specific plays like Uranium or Oil) in a Variable Portfolio?

Pros: You don't mess with the proven rebalancing math of the PP, and you only take the "commodity volatility" with money you can afford to lose.

Cons: You might miss out on structural protection during a 1970s-style supply shock that Gold alone might not fully cover.

Do any of you treat Commodities as a "Satellite" (VP) rather than a "Core" (PP) holding?

[Jack Jones]

My question to you all:
Does it make sense to keep the Permanent Portfolio "pure" (25/25/25/25) and only hold a broad Commodities ETF (or specific plays like Uranium or Oil) in a Variable Portfolio?

Yes. Gold is all you need for real assets in the PP.

[frugal]

Hi,

what do you think to have 2,5% on Bitcoin and 2,5% on COMMODITIES ?

[Jack Jones]

Hi,

what do you think to have 2,5% on Bitcoin and 2,5% on COMMODITIES ?

Seems reasonable. Personally, I don't invest in either (besides gold).

[Mayday_I]

In my view, a 2.5% allocation to any asset isn't really worth the effort. It adds unnecessary complexity to the portfolio without providing significant protection. To have a noticeable impact, I believe any individual position should be at least 5-%10%.

[mathjak107]

i agree on everything being at least 5-10% but i never exceed 2% in bitcoin

its to volatile and un predictable for my taste .

currently i own just 1.50% and am still down 16k or so

[Matthew19]

the guys who would recommend 5-10% bitcoin (myself and BitcoininthePP) were saying it 6-7 years ago.

[frugal]

Hi

we can say that BTC from 0-5% is VARIABLE PORTFOLIO

VP

[seajay]

Hi

we can say that BTC from 0-5% is VARIABLE PORTFOLIO

VP

But where a VP - with no fiat/stocks/Treasury's could yield similar characteristics to a PP. US assets and Treasury's are losing their luster, many in the EU/UK and elsewhere are starting to realise that Russia/China are potentially better trade partners than the US (much of the high cost of living is a consequence of being aligned to the US). Perhaps the same is thought in Australia, Japan and Canada, which would leave a US/fiat system isolated. 3% bitcoin/3% monero might replace 25% stock, lending/staking can yield more than Treasury's relatively safely (loan to value arrangments have collateral assets typically liquidated if they get anywhere near not being able to repay the lender), physical gold is very tax efficient in some locations - or if held as crypto can also generate income. In Portugal crypto held for more than a year is tax free. Fundamentally on/off ramping (converting to/from fiat) restrictions are predominately a US fiat competitor matter, absent such concerns and the Portuguese way may rise to commonly predominate. Trump is helping that all along, often deeply insulting closest allies even more than others. In the UK there is dual legal tender, fiat Pounds and gold legal tender (gold/silver) coins, it wouldn't take much in the way of legislative changes to transition over to a trio layered system and there's rising appeal to do so.