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Harry Browne’s Permanent Portfolio Long Term Performance
This is the latest update (as of 12/31/2015) of the performance of Harry Browne’s permanent portfolio. In 2015, the portfolio had a negative -4.5% return. Since 1970, for the past 46 years, the average compound annual return of the permanent portfolio has been 8.35%. Harry Browne proposed the concept of permanent portfolio in his Fail-Safe Investing book in 1999. In the book, he showed the performance table of his ‘permanent portfolio’. The following table incorporated Harry Browne’s performance and the new performance since 2003. As of 12/31/2015: 1970 4.10% 1980 22.10% 1990 -0.70% 2000 2.70% 2010 11.92% 1971 13.40% 1981 -6.20% 1991 11.50% 2001 -1.00% 2011 8.16% 1972 18.70% 1982 23.30% 1992 4.00% 2002 7.20% 2012 5.5% 1973 10.60% 1983 4.30% 1993 12.60% 2003 13.76% 2013 -3.8% 1974 12.30% 1984 1.10% 1994 -2.40% 2004 6.64% 2014 7.6% 1975 3.70% 1985 20.10% 1995 16.60% 2005 8.01% 2015 -4.5% 1976 10.10% 1986 21.70% 1996 5.20% 2006 10.80% 1977 5.20% 1987 5.30% 1997 6.70% 2007 11.94% 1978 15.00% 1988 3.60% 1998 7.40% 2008 -2.03% 1979 36.70% 1989 14.80% 1999 4.70% 2009 9.64% Cumulative 328.62% 272.57% 186.24% 190.27% Annual 12.63% 10.55% 6.42% 6.64% Since 1970 8.35% The highlighted portion is from Browne’s book (page 81) and the rest is from MyPlanIQ’s Harry Browne Permanent Portfolio. Notice there is some discrepancy for performance between 2000 to 2002. This is because in MyPlanIQ’s portfolio, Vanguard funds and Gold ETF (GLD) are used while in Browne’s calculation, he uses the following: Stock results are for an S&P 500 Index mutual fund, including reinvestment of dividends. Bond results are for a 30-year T-bond, including interest received. Gold results are for American Eagle 1-ounce coins. Cash results are for Treasury bills, assuming a 1-year bill was bought at start of each year. Cash in MyPlanIQ’s Harry Browne Permanent Portfolio is modeled using 3 month Treasury bill’s returns. We will continue to update this table as time goes. See also Permanent Global Portfolio ETF Plan Permanent Portfolio ETF Plan
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January 25, 2016: Alternative Portfolios Review
We review several alternative portfolios and discuss their prospects in 2016.
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January 18, 2016: Strategic Asset Allocation: A Cautious Outlook
We are cautious on Strategic Asset Allocation Portfolios. With stocks still being at a high valuation, we believe these portfolios might suffer from a big loss before they can recover and grow again. We discuss long term valuations and forecasts.
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January 11, 2016: Review Of Trend Following Tactical Asset Allocation
2015 is one of the four years since 1970 that no one asset among stocks, REITs, gold and bonds derived more than 10% return. It is a trendless, whipsaw year that is hard for any trend following asset allocation portfolios.
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January 4, 2016: What Worked And Didn’t In 2015
2015 is a challenging year for both global strategic allocation portfolios as well as tactical portfolios.
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December 21, 2015: Distressed Assets
We take a note that in addition to the beaten down stocks in 2014, which continue to be in a more distressed state, high yield bonds and oil & gas stocks are joining the distressed asset group.
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December 14, 2015: High Yield Bonds And Their Correlation With Stocks
Diversification has hurt global allocation portfolios this year. However, it is still one of the most important tools to control risk and enhance returns in the long term.
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December 7, 2015: Diversification And Global Allocation
Diversification has hurt global allocation portfolios this year. However, it is still one of the most important tools to control risk and enhance returns in the long term.
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November 30, 2015: Investors and Speculators Combined
We propose a simple and intuitive method to show that it is more rewarding to adopt a pragmatic approach in investing: being an investor and speculator combined results in the best returns and smallest risk. We propose a simple and intuitive method to show that
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November 23, 2015: Active Stock Fund Performance Consistency
Active funds have difficulty to outperform index funds, at least long enough to test many investors’ patience.
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November 16, 2015: Permanent, Risk Parity And Alternative Portfolios Review
We review permanent, risk parity and alternative portfolios and discuss outlook of the major asset classes they are based on.
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November 9, 2015: Broad Base Core Mutual Fund Review
We review core mutual funds used in major brokerages. They represent core asset classes.
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November 2, 2015: Broad Base Index Core ETFs Review
We review key index ETFs that represent core asset classes.
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October 26, 2015: Total Return Bond Fund Review
We review total return bond funds and their portfolios.
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October 19, 2015: Advanced Portfolio Review
We review some of advanced portfolios and point out how to properly use them.
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October 12, 2015: What About Commodities?
We discuss commodities as an asset class and point out that they should be still kept as a candidate asset class, at least for tactical asset allocation strategies.
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October 5, 2015: Core Satellite Portfolios In A 401k Account
We propose a core satellite portfolio solution to 401k accounts that have active constant new contributions.
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September 28, 2015: Risk Managed Strategic Asset Allocation Portfolios Revisited
At the current market environment, it is pertinent to explore how to adding a risk management layer to a strategic buy and hold portfolio.
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September 21, 2015: Quest For The Best Investment Strategy
Finding the best investment strategy is everyone’s quest. However, it is dangerous to switch impulsively without doing enough due diligence.
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September 14, 2015: Core Satellite Portfolios In Market Turmoil
We discuss how to establish a core satellite portfolio in the current market condition.
