Investing: Permanent Portfolio fund

Investment analyst Harry Browne in the 1980s constructed an investment portfolio of which he called the permanent portfolio. He believed it would be a safe and profitable portfolio in any economic climate. Using a variation of efficient market indexing, Browne stated that a portfolio equally split between growth stocks, precious metals, government bonds and Treasury-bills would be an ideal investment mixture for investors seeking safety and growth.

He argues that your permanent portfolio should protect you against all economic futures while also providing steady performance. It should also be easy to implement.

To use the Permanent Portfolio, you simply divide your capital into four equal chunks, one for each asset class. Once each year, you rebalance the portfolio. If any part of the portfolio has dropped to less than 15% or grown to over 35% of the total, then you reset all four segments to 25%.

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