I just published an article over at Advisor Perspectives that is titled “What Investors Should Fear in The Permanent Portfolio” that looks at a very simple model portfolio proposed by Harry Browne. This portfolio contains equal allocations to four elements: stocks, gold, long-term government bonds and cash. Back in 1998 when Browne first proposed this portfolio in his book, Fail Safe Investing, it was decidedly harder to create your own version of this allocation model. Today, you can easily implement this portfolio at fairly low cost using four ETFs.
Harry Browne’s Permanent Portfolio has gotten a great deal of attention–and many new advocates–due to its solid performance in recent years when more traditional asset allocations suffered substantial losses. However, the question that investors need to ask is whether this will be a successful way to invest in the future. Continue reading