[schmidty]

HB's Permanent Portfolio consists of 25% each cash/gold/stocks/long term bonds

25% stocks (index fund) Stocks – for profit during periods of general prosperity and/or declining inflation.

25% Gold – for profit during periods of bad inflation; during inflationary episodes gold bullion provides protection against a falling currency and other potential problems.

25% Long Term Bonds (30 year) – for profit during periods of declining interest rates; and especially during a deflation. Bonds also do reasonably well during prosperity.

25% Cash – During a recession, no particular asset class is going to do well. The cash in a Treasury Money Market Fund offers stability when portfolio asset classes fall in price. It also protects purchasing power during a deflation.

[snikeris]

I would add that gold is an asset that does well when people lose faith in the dollar. It's insurance against the unthinkable.

[baby]

yeah but there, other currencies make more sense.

[snikeris]

This is also intended to be a simple portfolio that your grandma can operate.

[Shivetya]

well is this advice of 25% applicable in this day and age, have we moved past precious metals occupying such a large percentage?

[shoover]

That percentage has been and will be debated forever, even by proponents of the Browne PP model, but 4x25 has done well as recently as the past two decades.

Also the exact number is not all that critical. Earlier versions of Browne’s portfolio were more complicated and he simplified it to 4x25 later on, still allowing that people could tweak it if they must. But 4x25 is simple and works.

[clamprecht]

For example?

[baby]

euro, pound, yuan, yen