Tagged: permanent portfolio

Permanent Portfolio Backtesting with Daily Data

Over on the forum, user Peak2Trough put up a website that uses daily market data for the Permanent Portfolio going back several decades through today: Peak2Trough Permanent Portfolio Backtesting Tool His tool allows for a number of configurable allocation and rebalancing options and will show a chart and table of the results. Since his data uses daily results, it can show a more granular view of maximum drawdowns than what is typically done for annual comparisons. Standard backtesting warning: The...

Mebane Faber Compares Eight Portfolios

A recent blog post by Mebane Faber compares eight different asset allocation strategies. In his comparison, the Permanent Portfolio did not have the highest returns (it likely never will), but it had by far the lowest drawdown/volatility of them all (-12.7% compared to -30% or worse). So the Permanent Portfolio gave the smoothest ride to get those returns. As we’ve covered before, I feel a portfolio with low volatility is very important for controlling investor emotions and ultimately achieving higher returns. A lot...

Drawdowns and the Permanent Portfolio

Let’s talk portfolio drawdown and investing risk. A drawdown in the sense of an investment portfolio is basically a loss it has experienced in the past. In particular, a lot of people are concerned with maximum drawdowns. This can give an investor a good idea about how an investment has done in the past so they can perform a gut check on themselves. For instance, a maximum drawdown for a 100% stock portfolio has approached -90% during the Great Depression....