6

Asset

Permanent Portfolio

DYI:  Here is an offshoot to Harry Browne’s Permanent Portfolio with a few more assets staying true to 50% inflation protection and 50% U.S. dollar based assets using ETF’s and one closed end investment company (PEO).  Just thought I’d send this to you for your inspection and deliberation. 

Inflation Protection:

20% Gold symbol GLD

15% Real Estate symbol VNQ

15% Natural Resources symbol PEO

Dollar Based Assets:

20% Growth Stocks symbol VUG

15% Long Term Bonds symbol BLV

15% Property & Casualty companies symbol KBWP*

These assets should have a higher return than Harry’s standard 4 assets [25% Stocks, 25% Lt. Bonds, 25% Gold and 25% Cash] as cash (short term bonds) is absent.  However there are always tradeoffs in investing, this portfolio will have higher volatility upside and down.

 *Property & Casualty companies hold very large bond positions for any possible claims.  They have the advantage as inflation/interest rates go up they have the ability to increase premiums to offset those declines.  This creates an inflation/interest rate protection for their bond holdings.

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