Radical Personal Finance Discussion of the Permanent Portfolio: an Investing Strategy for All Economic Cycles (interview with Jake Desyllas) RPF0030
Jul 29, 2014
Jake Desyllas, host of The Voluntary Life podcast and a devoted investor, dives into the Permanent Portfolio strategy crafted by Harry Browne. He introduces its four key asset allocations—stocks, cash, bonds, and gold—emphasizing their roles across economic cycles. The discussion covers the importance of rebalancing for stability, the protective power of gold against economic instability, and how to tailor this strategy to individual risk tolerance. Jake highlights the value of self-managing investments over retail funds, ensuring better alignment with personal financial goals.
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Four-Way Asset Diversification
- The Permanent Portfolio splits assets into four equal buckets: stocks, short-term cash, long-term bonds, and gold.
- Rebalance when allocations drift so you sell high and buy low across economic cycles.
Only Invest In What You Understand
- Never invest in something you don't understand; prefer transparent, replicable strategies.
- Research and backtest approaches before entrusting funds to advisors or funds.
Designed For Any Macroeconomic Cycle
- The portfolio prepares for four macro scenarios: prosperity, inflation, recession, and deflation.
- Each asset class tends to perform best under one of those scenarios, offering cross-cycle protection.
