The Permanent Portfolio is a strategy for diversifying your wealth. It’s an asset allocation that looks like it was lifted from the Old Testament:
- 25% in cash
- 25% in gold
- 25% in shares
- 25% in long-term government bonds
Okay, so you’re not shipping corn in a Phoenician galley or laying down shekels at the local moneylender. You’re investing in stock market listed companies and government debt.
Nevertheless for an asset allocation, the Permanent Portfolio is about as back-to-basics as diversified gets – the 25% slug of gold giving it a particularly Old World tang.
The Permanent Portfolio’s roots lie in the high inflation era of the 1970s, when investing was simpler. Forget robot advisors or quant funds1 – the only thing most people used computers for was playing Pong or Pac-Man. Few had heard of Warren Buffett, let alone Jack Bogle or Ed Thorpe.
Back then people still held active funds and shares for decades. They phoned or visited their stockbroker. Some buried gold coins in their garden or stashed them under floorboards while they hunkered down for the inevitable nuclear conflict.
Nearly 50 years ago – it’s a different world. You might wonder then what the rather presumptuously named Permanent Portfolio offers us 21st Century investors. Surely we’ve nothing to learn from an approach you could write on a fag packet? (If we still smoked…)
Well, I believe it’s worth pondering the Permanent Portfolio, and its deceptive simplicity. While it’s too straightforward for an investing stamp collector like myself, I recognize it as a thing of investing beauty.
The Permanent Portfolio’s returns have historically been pretty special, too.
Not the highest returns, granted. But that’s not the only way to judge how well a portfolio performs.
The history of the Permanent Portfolio
The Permanent Portfolio was the brainchild of Harry Browne, a US writer and politician.
Browne’s life was quite a journey – he wrote a classic of the US libertarian movement and ran for president – but it’s his evolution as an investor that’s relevant to us.
Beginning his investing career as a gold bug and newsletter writer, Browne morphed into a proto-passive investor. He came to believe nobody knew much about the direction of markets or the economy.
Expansions and recessions were inevitable but impossible to time. Investors should be fearful of inflation as well as deflation, and also of government interventions. (Goodness knows what Browne would have made of quantitative easing!)
Finally cheap passive funds were the investments of choice. Why pay a fund manager when nobody knows anything?
This all resulted in the Permanent Portfolio – the pioneering all-weather asset allocation I gave above.
The Permanent Portfolio is extremely simple, but designed to preserve an investor’s wealth whatever fortune throws at it:
- In good times, the cash and equities should do well.
- In retrenchments, long-term government bonds should shine.
- Gold protects you from calamities – as well as, hopefully, the sort of high inflation (double digits) that prevailed in the 1970s.
Rebalance annually and you might benefit from automatically selling high and buying low. More importantly, you keep your ship on an even keel.
Historical returns from the Permanent Portfolio
According to Portfolio Charts, here’s how a UK Permanent Portfolio would have performed since the 1970s. Note that these are real (inflation-adjusted) returns:
(Click to enlarge)
What’s most noteworthy about the Permanent Portfolio is the very low volatility.
- The average 5% real return from the Permanent Portfolio came with a standard deviation 0f just 7.3%.
- In comparison, Portfolio Charts calculates a 60/40 UK portfolio split between shares and bonds gave a 5.9% real return but with far more volatility – a standard deviation of 14.2%.
Here’s an alternative way Portfolio Charts expresses the lows of holding the Permanent Portfolio:
…compared to the 60/40 portfolio:
In inflation-adjusted terms, a 60/40 portfolio lost more than half its value in its worst period. Investors in the 60/40 also had to put up with a 12-year run in the worst case before their portfolio regained its old highs.2
In contrast, at worst the Permanent Portfolio declined just 11% in real terms. And even looking at the darkest period, after four scant years it was back into the black.
True, the higher average returns from the 60/40 portfolio translated into higher total gains if you held it over the nearly 50 years covered.
But you could argue the Permanent Portfolio owner was likelier to keep on holding.
Why the Permanent Portfolio works
The key to the Permanent Portfolio’s stabler returns is its diversification, especially the out-sized allocation to gold.
Clued-up passive investors know that all sorts of simple lazy portfolios of index funds will beat most expensive actively managed ‘solutions’.
But away from websites like this, too many people – especially those who’ve yet to get the passive religion – still hold all sorts of active funds in the name of diversification.
This apparent diversification can be a bit of a mirage, as the following matrix from Columbia Threadneedle [PDF] hints at:
(Click to enlarge)
The matrix shows correlations over a three-year period, just by way of illustration. You can see that UK equities and global equities typically move in lockstep. Corporate bonds and property don’t provide much diversification, either.
You need to get into government bonds and commodities to see the all-important red numbers that highlight desirable negative correlations. This is where you hope to own assets that will go up when others (typically shares) go down.
In contrast, holding fund manager A’s Active Superstar UK Equity Booster Fund as well as fund manger B’s Tactical Return Boosting Superstar UK Equity Fund and 20 other active funds that own much the same stuff won’t give you true diversification when the returns hit the fan.
The Permanent Portfolio’s large slug of cash also does much to dampen volatility. In nominal terms, cash never declines.
Diversification and gold
The matrix above detailed commodities in general. Here’s one illustration of how gold in particular has historically proved a diversifier for UK equity investors.
(Click to enlarge)
Source: The Gold Council [PDF]
This shows gold was most negatively correlated to FTSE 100 shares at times when the FTSE 100 fell sharply. That’s exactly when you’d most want to see something you own go up, to offset the pain!
It’s especially worth noting because in a crash correlations increase – that is, most assets tend to crash together. If you can own something that doesn’t, you’ll be glad of it.
Bottom line: The big allocation to gold is the oddest but perhaps also the most important aspect to the Permanent Portfolio.
What have you done for me lately?
The Permanent Portfolio regained popularity between the crash of 2008 and the peak of the gold market bull run in 2011.
Scared of plunging share prices and attracted by the allure of gold, new adherents flocked to its defensive asset allocation – with hindsight at a pretty poor time.
Since 2011, the gold price has fallen and stock markets have soared. Permanent Portfolio investors have seen equity-laden investors get richer, quicker.
You can easily see this by comparing the returns from one US ‘permanent portfolio’ fund and the S&P 500:
One Permanent Portfolio-style fund (purple) Vs cash, the S&P 500, and an equity/bond portfolio.
Source: Fidelity
A few caveats. Firstly, this commercial portfolio is a US fund, not a British one. I’m just using it as an illustration of how the strategy has lagged recently. Also note the asset allocation of this fund is more complicated than Browne’s pure formula. (The fund holds silver, real estate, and even Swiss francs.)
I don’t have the tools to show how a simple UK Permanent Portfolio made up of index funds would have done in recent years.
But as a pointer, a British investing service found that between 2011 and 2015, its own take on the Permanent Portfolio3 delivered a compound annual growth rate of 3.2%.
In inflation-adjusted terms that was an annual growth rate of 1.9% – well below their version of the Permanent Portfolio’s long run real returns of 5.1% since 1986.
As I say, these are just examples given to show that owning a steady performer like the Permanent Portfolio is not a panacea. Someone will always be doing better than you.
But we should appreciate that even during this weaker period, the Permanent Portfolio has achieved its goal of delivering above-inflation returns.
Investing in the Permanent Portfolio
The Permanent Portfolio is a self-reliant DIY investors’ dream. Not as simple as the very simplest global shares and bond mix, admittedly. But a Permanent Portfolio shouldn’t take more than half an hour to set up, and the same again once a year to rebalance.
My co-blogger The Accumulator gave an example setup in his review of lazy portfolios. He used funds. You could use ETFs if you prefer.
Note that long-term government bonds are owned in the Permanent Portfolio. Yes, their returns look weak from here, but they are there for a reason. Using, say, corporate bonds instead will correlate you closer to equities. Shorter duration bonds would bring your bond returns nearer to those of the cash allocation.
Private investors should use bank accounts for their cash component – interest rates are higher.
Gold could be owned via ETFs or coins, via a service like Bullion Vault, or perhaps a mix. (I suggest you review the tax differences).
The equity allocation is invariably given as domestic shares. If I was a UK Permanent Portfolio investor, I might split the 25% between UK and global shares. The London market isn’t as big as the US one, where this portfolio originated. True, you probably won’t get much extra diversification benefit, but I think you’ll get some. It’s not much of a complication. Retaining half in UK shares dampens the currency risk.
US investors might be inclined to add inflation-linked bonds to the mix, but it’s worth noting Browne didn’t suggest this, even after they became available during his lifetime.
British inflation-linked bonds are eye-wateringly expensive right now. I would be in no rush to include them.
Another variant could be to run your equity and bond allocations via an all-in fund like Vanguard’s LifeStrategy, and to manage your cash and bonds separately.
Talking of investment platforms, you would want to think about your portfolio’s size and how you will be rebalancing your allocations when choosing the best broker for you. Our comparison tools can help here.
Needless to say you should be investing in ISAs and pensions to avoid your portfolio being ravaged by tax.
The four horsemen of the investing apocalypse
The contrarian in me suspects it’d be a great time in invest a Permanent Portfolio.
You never read about it anymore. It has hugely lagged other lazy portfolio allocations for years, and people are worried about all its components:
- Gold – “What, you mean gold gold? Haven’t you heard about bitcoin? Or what about something more useful for the 21st Century, like cobalt or graphite? The gold price has been going down for years, anyway. Hardly a store of value!”
- Long-term government bonds – “Are you having a laugh? Putting 25% of my money into expensive interest rate sensitive bonds just as Central Banks start raising interest rates and inflation is rising? Hah!”
- Shares – “What are you on? We’re nine years into a bull market! I’d rather invest in an alpaca farm than put my money into the expensive stock market!”
- Cash – “What, you mean cash in the bank? Now I know you’re taking the piss. I don’t save money for a 1% return a year. That’s less than inflation!”
All these protestations seem reasonable. But not only do most of us struggle to know the future – some of these scenarios are mutually incompatible. (Gold is its usual joker in the pack. The price could do anything.)
The genius of the Permanent Portfolio is something should do well in pretty much all scenarios. Overall that should make up for some under-performance in its other components – at least compared to share or cash-dominated approaches.
Permanently a place for the Permanent Portfolio
Active investing is my passion. At times I’ve approached a hundred holdings of some sort. I’ll also accept higher volatility for hopefully higher returns. The Permanent Portfolio is too simple for me. And realistically, I can’t imagine putting 25% in gold.
All that said, compared to when I first learned about the strategy almost a decade ago – back when I was happily ‘all in’ on equities – my need to diversify has increased. The absolute amount I have invested has grown a lot, and my time horizon has shrunk.
The Permanent Portfolio – and its history of decent returns with minimal volatility – is a useful reminder that simple and stark diversification need not be a recipe for stagnation.
I think those looking to reduce volatility in their portfolios (such as those approaching or recently into retirement) could do worse than spend a few minutes thinking about what it has to teach us.
- Further reading: A good book about The Permanent Portfolio.
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It’s great to see a serious article about this approach.
My investing approach was heavily inspired by the PP.
I’ve ended up with a moderately big chunk of cash (but for reasons besides asset allocation: http://liberate.life/index.php/2016/09/09/money-tank-taps/) and then besides that, settled on an 80:10:10 split [world equities roughly proxied by Vanguard LS100 : UK Long Gilts : Gold Bullion] .
I’m in it for the very long haul and need the growth so the purist PP isn’t for me but there’s definitely something to be said for a modicum of ‘tin foil hat’!
I agree. It is great to see an article on the PP from a UK perspective. My own portfolio is a sort of 50/50/PP-inspired mash-up:
25% UK
25% World ex-UK
25% Bonds (longish)
15% Gold
10% Cash
An excellent topic! I hope you’re right about it might be a good time to start one: I started up a Permanent Portfolio some months ago with a small but not insignificant amount of my assets. Planning on annual drip-feeding it to double it’s size over the next 5 years (so initially the annual rebalances will likely be achieved by modulating where added money goes rather than selling anything, unless there are huge swings). My allocation is: 25% global stocks VRXXB (“Vanguard Global All Cap Fund”), 25% precious metals PHPP (“ETFS Physical PM Basket” of Gold, Silver, Platinum and Palladium; the most pricey thing in the portfolio at 0.4% OCF but I value the diversification rather than going all gold), 25% long bonds split 1/3 each way between VVUKLG / IBGL / IBTL (those are 20-30 year duration GBP/EUR/USD government bond fund/ETFs) and 25% very short bonds split 1/3 each ERNS, ERN1, ERNU (again GBP/EUR/USD exposure; using these ETFs as a cash/money-market/forex account substitute) . I very much wanted global diversification from it, so didn’t want to be all in the UK or USA or too tied just to sterling or dollars for the bonds.
What motivated (monevated?) me to get into this was I’d convinced myself that the long gilts and precious metals were an area I was underexposed to and that they were in theory a useful diversifier for me… however that bit in the article about “The four horsemen of the investing apocalypse” and “people are worried about all its components” really summarizes my feelings about them very nicely! But by convincing myself they’re all just essential elements of the greater “machine” which is the Permanent Portfolio I could just about bring myself to stomach buying them. I’ll defer judgement of performance for 5-10 years; if I hadn’t put the cash into this it’d have probably been added to my Lifestrategy’60 holding so that’s my benchmark.
“The London market isn’t as big as the US one, where this portfolio originated. True, you probably won’t get much extra diversification benefit, but I think you’ll get some. It’s not much of a complication. Retaining half in UK shares dampens the currency risk.”
UK large cap (i.e. the FTSE 100) seems to rise/fall just as much as ex-UK shares when sterling falls/rises. So maybe one needs to use mid and small cap to lessen currency risk?
I’ve often looped at the PP and it does have its draws.
However, I’m about 75% of the way through “Living off your money” and am trying to work out how to map some of the top portfolios there to the UK market. Maybe I need to wander over to that thread?
Oh, and can I just say that I almost miss the gold bugs with their endless blithering about fiat currencies and the like. What they return in their droves *that’s* the right time to sell gold, which may focus some minds on bitcoin!
@TI – I owe you a debt of enormous gratitude. Yes, the Permanent Portfolio is interesting; I read about it first in the excellent The Intelligent Asset Allocator and it seems like a pretty sound approach.
But for me the golden nugget in your article is the Ulcer Index which I spotted in one of those charts. It’s Genius! Summing up all the drawdowns over a specific period is exactly the risk measurement tool I’ve been looking for! I always thought standard deviation was a rubbish measure of risk and the Ulcer Index seems to fix pretty much of of its problems.
I shall be making liberal use of the idea in future blog posts (with a hat tip to this article, of course).
Cheers.
The permanent portfolio is the first portfolio that caught my eye when I started investing, plus as a libertarian at heart, I can’t help but have some affection for it. Overall, I can’t help but think its a great portfolio for those with a low-risk tolerance.
I run something similar, but instead of so much cash I have REIT ETFs, so invest in property. My asset allocation looks something like:
25% Equities
25% Long Term Bonds
25% Property/REIT ETFS
25% Gold and Commodity ETF’s (50/50 split)
I believe this gives me higher expected returns than the PP but with slightly more volatility. The thing that I find hard is to have 50% of my portfolio producing no expected return, with gold and cash. I also believe this portfolio gives similar, or perhaps, slightly better returns than a standard 60/40 but with fewer swings as gold/commodities are inversely correlated with some form of stocks/bond crash.
@GM – thats definitely on my to read list. Was it you that recommended Ed Bunker? Got any other good book recommendations? Its that time when people ask what I want for xmas 😉
No, not me on Ed Bunker as I had to google him.
LOYM is a heavy read, and one where you’ll need to mark pages to return to later. I’ll dedicate a day to working with the spreadsheet over the xmas break, and will maybe even need to lay off the booze!
@GM aplologies I think I may be confusing you with Neverland..
Cheers for the LOYM comments – I’ve successfully worked through Hale and even Graham so prob. should be just about up to it..
only lay off the booze if *absolutely* necessary..
I found some of Harry Browne’s writing to be very inspiring, and would highly recommend people to read his (out-of-print) books. The explanation for the Permanent Portfolio is fascinating and it makes much more sense once you know the background.
In particular, what most people miss is the PP paradox – the reduced volatility is achieved by having a mixture of non-correlated, highly volatile assets. In most cases this is obvious, except for the equities.
As I understand it, Browne advocated that the equity component should be in highly volatile stocks or funds, so that you really benefit from it in the good times.
Separately, it occurred to me a few years ago that the Personal Assets IT (i.e. the Troy Trojan Fund) approach is not far off a Permanent Portfolio, though I don’t think I’ve ever heard them refer to it.
I read his libertarian manifesto off the back of a recommendation from Andy (comment #1) and very much enjoyed it – lots of good food for thought.
My feeling is that libertarianism is something to aspire to personally, but a truly libertarian society would be brutal for a lot of people..
If I remember correctly the PP is covered in How I Found Freedom in an Unfree World?
@GM / @Rhino
LOYM on my Xmas list, do I need to add a good single malt to get me through it?
William Bernstein wrote an excellent analysis of the pp in Deep Risk.
The portfolio has two levels of diversification. One across asset classes, Two geographically.
The asset class diversification allows variance harvesting when rebalancing, pretty standard portfolio theory. I soul search on the geographic diversification which allows you to avoid Bernstein 4th horseman of the apocalypse … asset confiscation (popular with the shadow chancellor).
Would you give up citizenship for a foreign bank vault? Bernstein feels personally he would pay his dues as the cost of citizenship.
@The Rhino
You’re thinking of ‘Fail Safe Investing’. However, How I Found Freedom is essential reading for anybody who doesn’t like just going with the flow.
I won’t link to it but, if anyone’s interested in learning more, I wrote a reasonably comprehensive review of How I Found Freedom on my site.
Re libertarianism in general: it’s a really attractive idea to me as I subscribe to a ‘win-win’ philosophy and don’t like being coerced. However, I can see that I make these points from a position of privilege and if I was penniless, disabled and lacking well-paid, marketable skills, I may feel differently.
Let’s just say that I might not be rushing to vote for Jeremy Corbyn 🙂
LOYM doesn’t specifically include the Permanent Portfolio as one of the Lazy Portfolios. The footnote on page 217 says, “Evidence-based recommendation could not be made for commodities, including precious metals, based on the data and techniques used in this book.” However there are plenty of other portfolios, including ones proposed by David Swenson, Larry Swedroe and Scott Burns.
Earlier on in the book it says that the Harvesting Ratio doesn’t apply to commodity funds, therefore the book concentrates on different types of equity funds and REITs.
It’s a good book, and as trumpeted by the author it is worth reading sections a few times to fully appreciate it. I’ve learned from it and adapted my portfolio too.
Another book I’ve read recently, which is much smaller than LOYM and far easier to read, is The Index Revolution by Charley Ellis. It gives an insight into the history and development of the investment industry.
“My feeling is that libertarianism is something to aspire to personally, but a truly libertarian society would be brutal for a lot of people.”
it would be brutal for most people
I’ve looked at the PP a number of times and my mind boggles at the simplicity and consistency of it.
I have read elsewhere that the most challenging aspect of running this portfolio is sticking with it when markets are on it a rip and you’re sat crawling along missing out on the big gains.
PortfolioCharts is a great resource! It’s worth a look at the Golden Butterfly portfolio as well, the website creators’ personal favourite:
20% Total Domestic Market equity
20% Small Cap Value equity
20% Long-term bonds
20% Short-term bonds
20% Gold
It is essentially a variation on the PP, as ST bonds equal cash, but it allocates quite a bit more to equities – particularly small cap gives it more of a barbell feel to it. The average return is 6.4%. Like the PP it has a 11% max drawdown, but then it’s longest drawdown is only 2 years, compared to 4 for the PP – and the Ulcer index is a mere 2.6 compared to 3 for the PP.
I fiddle too much with my own portfolio to be fair, so I only approximate this allocation. I have replaced much of the small cap with emerging markets equities. I also find holding LT bonds unpalatable, so I allocate quite a bit of that slice to boring high yield/value equities and also place our EIS solar panel projects in that category. As for cash and ST bonds, we do have a quite a bit in savings accounts, but hold no ST bonds, so the total doesn’t quite reach 40% of the portfolio: the rationale (ahem) being that we are in prime accumulation phase and therefore need to essentially account for expected cash savings for the year ahead in the cash slice.
Got to love libertarians. It’s the ultimate smorgasbord of delusioms.
Don’t want state coercion but absolutely want police and a justice system to protect them and their family and wealth.
Dont want state interference in the free market but absolutely want electricity grids and clean water when they turn the tap on.
Sorry people. Rant over.
I’ve spent a lot of time on Portfolio Charts and have looked a lot at the various portfolios. The thing I can’t get over about the Golden Butterfly is that, for the data they have ( since 1972?) its greàt returns have coincided with the phenomenal bond bull market. Interest rates have been almost continuously falling over the period for which they have data. So the bond heavy portfolios look very attractive from both a total return or drawdown perspective.
Exactly. Bonds will still have that highly coveted negative correlation with equities, but nothing like the returns from the past decades. My bet is that high yield boring equities, propped up by central bank balance sheets, will approximate Lt bonds the best over the coming decade.
@Brod – isn’t the idea they want *minimal* government to cover their basic requirement of not being subject to coercion? i.e. they need police/justice to cover that
its more pared right back rather than cherry-picking on what the states provides front?
I’d imagine they would argue electricity and water are best provided through normal market forces?
I’m not really for or against here – just that i have read that browne book and seem to remember that being the thrust of his argument?
Exactly what do you think police and justice are if they’re not coercion? Rules and natural justice based ideally, but still coercion.
They might well argue that water and electricity are best provided through the market – they’d be wrong though. Change electricity/water supplier and you’ve got to lay new cables/pipes every time. Really?
@Brod – well as far as I’m aware, a libertarian party doesn’t even exist in the UK? Its only a US thing..
Portfolio Charts is a great blog. The main thing I learned from there is that it’s not only about investment returns. It’s also about withdrawal rates (sequence of returns risk), and while PP’s real and nominal return may not be very high, it can support one of the highest withdrawal rates.
Perhaps PP is not as well suited for those in their accumulation phase (e.g. yours truly) as it is for the lucky few of you chaps who are already FI and living off your money? Ok, a 25% slug of cash is unlikely to be my cup of tea even if (when?) I reach the sunny uplands of financial independence, BUT a 15% cash allocation might help me sleep when the bear market comes. Assuming a 3% withdrawal rate, a 15% cash allocation is 5 years’ expenses – almost enough to survive a 1930s style recession, and definitely enough to survive a 2008 style recession as well as pick up some cheap shares on the way.
Thanks for the great article, I really enjoyed the read.
I can totally see how a PP contributes to a low volatility, resilient to stock market crisis portfolio. However, I have two serious doubts about it: a) the high reliance on unproductive asset classes (cash and gold) and b) the low share of equity. Both factors clearly have a very detrimental impact on performance. This gets particularly serious as you follow the PP strategy in the long term. Whereas the low volatility should not matter in the long term (>10 years), the lower yield will hurt tremendously. As a long term investor, I would keep my fingers away from the PP.
thats interesting about the withdrawl rate
maybe the thing is to migrate over time from a high equity to PP across the accumulation phase, then stick with PP for decumulation?
come up with a similar mechanical strategy to say doing the old % in bonds matching your age or somesuch over that accumulation period?
Tom, I was having a look at Personal Assets Trust current make up, a whopping near 25% in cash, but no conventional long bonds. They have another 25% in index linked bonds, mainly US TIPS – presumably as the UK ones are so expensive. 9% in gold and the rest in developed market equities.
As for the Permanent Portfolio, it doesn’t work for me in those 25% ratios as it is incompatible with my predominantly natural yield income focussed portfolio.
But I will definintely increase cash, gilts (intermediate dated) and gold allocations from now on to provide some crash protection and reduce overall volatility.
Commercial property/infrastructure is my 5th asset class, sitting kind of in the middle of the risk spectrum.
But I can guarantee all of us trying to tweak our portfolios and be clever will wish we had a pure Permanent Portfolio when the next big crash happens.
@Brod, could not agree more. They will complain like hell if they get horse (or worse) in their lasagne as well.
One thing worth pointing out about gold is that for a long time it was synonymous with money. That finally stopped when the gold standard was scrapped. Since then I rather suspect that gold has become a lot more volatile and probably took some time to establish what its purpose was, if it has yet, since negligible amounts are used in industry.
Still, someone once said if you like everything in your portfolio you are not diversified and I would certainly hate to have gold, or bitcoins for that matter, in my portfolio. I shall stick with my 60/40 fund for now, but may revise that when I have digested LOYM, which finally turned up this morning. A very quick scan through indicates to me that I can probably safely withdraw far more than the 2.5% (1 divided by 40 years) that I currently use as a spending guide.
Has anyone analysed the effect of replacing gold with index linked gilts?
This is a strategy I think I am most comfortable with and looking to adopt…I just wondered if those of you who decided to take this approach are thanking the gods of investment due to the recent crash and hike in gold price. Its also not a bad time to be sitting on a chunk of cash.
@GoldFinger – I set up a Permanent Portfolio a a trial with £50k in September 2019 – very relieved to have done it – it was down about 2% at the worst point – you can see its exact composition and performance here https://ace-your-retirement.blogspot.com/search/label/PERMANENT%20PORTFOLIO. Have a look at the Golden Butterfly – a little more volatile but greater potential for growth as it contains 40% equities rather than 25% in the Permanent Portfolio
I switched to PP in 2012. Just added £20k to my ISA in April. Most of the top up went into equities this time around. It’s simple and chugs along quite nicely.