The Permanent Portfolio

What's a permanent portfolio? It's one you wouldn't have to change. None of this cycling between large cap and small cap stocks. No need to pick sectors. No need to worry about the percentage of your portfolio in international stocks.

It's kind of a defensive portfolio. Timothy Middleton wrote an article about a mutual fund called Permanent Portfolio, started in 1982. Here's what the portfolio is invested in. There are some interesting ideas here. Note that in good times, this mix doesn't usually do as well. But in bad times, it's not nearly as bad.

20% gold

5% silver

10% Swiss denominated assets like government bonds

15% in U.S. and foreign real estate and natural resources

15% in U.S. growth stocks (e.g. S&P 500 or Russell 1000)

35% in U.S. Treasuries and high growth corporate bonds

Ticker	Name of fund	1999	2000	2001	2002	2003	2004	2005	06Q3
PRPFX	Total Return	1.2	5.9	3.8	14.4	20.5	12.0	7.6	11.2

Compare that to some results on the indexes page.