Gyroscopic Investing

Hi,

The Permanent Portfolio has been on a strong upward trend, reaching levels that, historically, tend to precede some kind of cooling period or even a correction.

Over the last months, we’ve seen a steady appreciation across its core components. Typically, the Permanent Portfolio works as a hedge, balancing growth and protection. But when everything rises at the same time, it raises an important question: are we entering overextended territory?

A few factors are worth keeping in mind:

Historically, sharp rallies are often followed by a correction or at least a sideways consolidation.

Current global monetary policy remains uncertain, which could impact bonds and gold simultaneously.

Stocks have been on a persistent bull run, increasing the overall portfolio value beyond what some consider sustainable in the short term.

Investor sentiment seems overly optimistic — and excessive optimism is often a contrarian signal.

Of course, markets can stay irrational longer than expected, and it’s possible the rally continues well into next year. But from a risk management perspective, this could be a good moment to review allocations and expectations.

What do you think?

Is this just the beginning of a longer bullish cycle?

Or are we setting up for a healthy (or not so healthy) correction in 2026?

frugal wrote: ↑Sun Oct 19, 2025 3:27 pm Of course, markets can stay irrational longer than expected, and it’s possible the rally continues well into next year. But from a risk management perspective, this could be a good moment to review allocations and expectations.

What do you think?

Is this just the beginning of a longer bullish cycle?

Or are we setting up for a healthy (or not so healthy) correction in 2026?

<snip>
Harry Browne believed the future is unknowable and based his investment strategy, the Permanent Portfolio, on this principle by preparing for any economic condition rather than trying to predict the future. His strategy involves holding a diversified portfolio of assets, including stocks, bonds, gold, and cash, so that investors are financially safe regardless of whether the economy experiences prosperity, inflation, recession, or deflation.

I’m always bearish. If I followed my instincts, I’d have sold everything a long time ago. That’s why I like the PP so much.

frugal wrote: ↑Sun Oct 19, 2025 3:27 pm Over the last months, we’ve seen a steady appreciation across its core components.
…
Current global monetary policy remains uncertain, which could impact bonds and gold simultaneously.

Lots of things could impact bonds, but have they rallied recently along with the other assets?