I've been a long-time advocate and holder of Harry Browne's Permanent Portfolio (HB PP) for a while now. I've really appreciated its stability and "all-weather" diversification through various market conditions.
Initially, I started with the classic 25% stocks, 25% long-term bonds, 25% gold, and 25% cash (short-term bonds). However, my allocation now hold:
30% Stocks
30% Long-Term Bonds
30% Gold
10% Short-Term Bonds (Cash)
My primary concern is: Am I introducing any significant, unforeseen risks with this new 30/30/30/10 distribution, especially compared to the traditional 25/25/25/25?
I'm particularly interested in how the increased exposure to stocks, long-term bonds, and gold, coupled with the reduced cash position, might affect the portfolio's overall risk profile during different economic cycles.
Rebalancing: is on average every 4 Years
However, I've also been thinking about the implications of not rebalancing at all. What are the potential downsides of letting this particular 30/30/30/10 allocation drift without regular rebalancing?
Would the deviation from the target percentages eventually undermine the portfolio's core defensive properties or significantly alter its long-term risk and return characteristics?
I'd love to hear your insights, especially if you've run similar allocations or have thoughts on the rebalancing frequency (or lack thereof) for this type of HB portfolio.
Any advice or experiences would be super helpful!
Thanks in advance for your input!
