Gyroscopic Investing Desert Portfolio
0.52%May 01 | MyPlanIQ portfolio symbol P_79090

  • Portfolio Overview
  • Asset Allocation and ETFs
  • Performance
  • Calculators
  • Rolling Returns
  • Drawdowns

Portfolio Overview


Gyroscopic Investing Desert Portfolio Overview

1. Background and Philosophy

The Gyroscopic Investing Desert Portfolio is a simple, low-maintenance "lazy portfolio" proposed by members of the Gyroscopic Investing forum, a community focused on passive investing strategies inspired by the works of Harry Browne (creator of the Permanent Portfolio) and other asset allocation pioneers. The philosophy behind this portfolio emphasizes stability, inflation protection, and minimal rebalancing. The name "Desert Portfolio" reflects its resilience in harsh economic climates, much like a desert's ability to endure extreme conditions.

The portfolio's design is rooted in the idea of balancing risk across uncorrelated asset classes: bonds for stability, stocks for growth, and gold as a hedge against inflation and currency devaluation. This approach is similar to other "all-weather" portfolios but with a simplified 3-asset structure.

2. Asset Allocation Analysis

The Desert Portfolio allocates:

  • 60% VGIT (Vanguard Intermediate-Term Treasury ETF): Provides steady income and acts as a ballast during market downturns. Intermediate-term bonds offer a balance between yield and interest rate risk.
  • 30% VTI (Vanguard Total Stock Market ETF): Offers broad exposure to U.S. equities for long-term growth.
  • 10% IAU (iShares Gold Trust): Serves as an inflation hedge and diversifier, typically performing well during periods of economic uncertainty.

Diversification and Risk

The portfolio is moderately conservative due to its heavy bond allocation, making it suitable for risk-averse investors or those nearing retirement. The inclusion of gold reduces correlation with traditional assets, though it may underperform during bull markets. Pros include simplicity, inflation protection, and low volatility. Cons include limited international exposure and potential lag during strong equity rallies.

3. Compare with Harry Browne Permanent Portfolio

Harry Browne Permanent Portfolio has a more balanced allocation:

  • Stocks: 25% (VTI, IWM)
  • Long-Term Treasury Bonds: 25% (TLT, TLH)
  • Gold: 25% (IAU, GLD)
  • Cash: 25% (USFR, Money Market Fund)

This portfolio is a bit more conservative in terms of allocating to risk assets (stocks and gold).

4. Application for Retirement Accounts (401(k) and IRA)

Investors can replicate this portfolio in their retirement accounts as follows:

  • 401(k) Implementation:
    • For VGIT (bonds), look for intermediate-term Treasury or aggregate bond funds (e.g., "U.S. Bond Index Fund").
    • For VTI (stocks), use a total U.S. stock market fund or S&P 500 index fund.
    • For IAU (gold), most 401(k) plans lack commodity funds. Allocate the 10% to equities or a stable value fund as a substitute.
  • IRA Implementation: IRAs offer more flexibility. Investors can directly purchase the ETFs (VGIT, VTI, IAU) or equivalent mutual funds.

Note: If a 401(k) lacks exact matches, approximate the allocation using the closest available options (e.g., substitute gold with stocks). Rebalance annually to maintain target weights.

Rule of Thumb: 

  • For stock funds, prioritize index funds, especially low-cost index funds
  • For bond funds, prioritize core bond funds or high-quality actively managed total return bond funds  (if available).
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Asset Allocation


Symbol Category/Sector Target Weight
IAU
iShares Gold Trust 		Commodities 10%
VGIT
Vanguard Intermediate-Term Treasury ETF 		Fixed Income 60%
VTI
Vanguard Total Stock Market ETF 		US Equity 30%


Historical Performance


The return data shown below all have the same latest date: 05/01/2025.
AR inception is since 11/23/2009.
Name YTD Return 1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR 20Yr AR Inception
Gyroscopic Investing Desert Portfolio 2.88% 12.76% 6.84% 7.54% 6.41% 6.57% NA 6.86%
VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) -4.37% 13.03% 12.04% 16.35% 12.16% 12.80% 10.20% 13.49%
VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) 1.21% 10.24% 6.96% 8.03% 5.81% 6.59% 6.00% 7.02%

Gyroscopic Investing Desert Portfolio Return Calculator

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Calculators


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Rolling Returns


From 11/23/2009 to 05/01/2025, the worst annualized return of 3-year rolling returns for Gyroscopic Investing Desert Portfolio is 1.21%.

From 11/23/2009 to 05/01/2025, the worst annualized return of 5-year rolling returns for Gyroscopic Investing Desert Portfolio is 3.77%.

From 11/23/2009 to 05/01/2025, the worst annualized return of 10-year rolling returns for Gyroscopic Investing Desert Portfolio is 4.82%.


Maximum Drawdown

Gyroscopic Investing Desert Portfolio Maximum Drawdown