Permanent Portfolio
A passive portfolio designed to withstand any economic scenario - growth, recession, inflation and deflation. No monthly signals.
What the Permanent Portfolio is
Harry Browne designed it in the 1970s as a portfolio that does not need to predict the future. It splits wealth equally between four assets, each meant for a different scenario:
| Asset | Weight | Scenario in which it helps |
|---|---|---|
| Stocks (SPY) | 25% | Economic growth |
| Long-term Treasury bonds (TLT) | 25% | Deflation and recession |
| Gold (GLD) | 25% | Inflation and crises of confidence |
| Cash (BIL) | 25% | Financial stress and scarcity of money |
Quick facts
- Author
- Harry Browne
- Year
- 1981
- Origin
- Book
- Access
- Public and free
- Type
- Passive
- Assets
- 4
- Frequency
- Annual
- Difficulty
- Low
Who it is for
Anyone looking for a passive portfolio with a single trade a year and contained drawdowns.
Who it is not for
Anyone who needs a high long-term return or cannot tolerate having half the portfolio in gold and cash.
Why it is on this site
As a reference. If a tactical strategy with monthly rotation does not clearly improve on a passive portfolio that requires one trade a year, you have to ask whether it is worth the costs, the taxes and the effort.
Current signal
Permanent Portfolio
Calculated with the closes of September 30, 2026.
No portfolio changes from last month.
Rules, step by step
Once a year (in our backtest, at the end of December) 25% is restored to each asset. There are no signals or momentum calculations. That simplicity is its great appeal.
Backtest and out-of-sample period
Since Jul 2007, with real ETFs and annual rebalancing: 7.0% a year, maximum drawdown -15.7%, volatility 7.5%, Sharpe 0.76. Turnover is minimal (7% a year), so it hardly generates commissions or taxes.
As you can see, it is a moderate-return portfolio with far more contained drawdowns than the stock market. In years like 2022, when bonds and stocks fell together, gold and cash only partly cushioned the blow.
Growth of $100 (logarithmic scale) since , with 0.1% costs per trade. Data: US-listed ETFs, total return (dividends reinvested), before taxes.
Drawdowns from peak
| Strategy | CAGR | Volatility | Max drawdown | Sharpe |
|---|
Year by year
| Year | Permanent Portfolio | S&P 500 | 60/40 |
|---|---|---|---|
| 2026 (to Sep 2026) | +0.8% | +12.7% | +5.8% |
| 2025 | +22.4% | +17.7% | +13.8% |
| 2024 | +12.2% | +24.9% | +14.7% |
| 2023 | +11.6% | +26.2% | +17.2% |
| 2022 | -12.2% | -18.2% | -17.0% |
| 2021 | +5.0% | +28.7% | +15.9% |
| 2020 | +15.4% | +18.3% | +15.0% |
| 2019 | +16.3% | +31.2% | +21.9% |
| 2018 | -1.6% | -4.6% | -2.4% |
| 2017 | +11.1% | +21.7% | +14.0% |
| 2016 | +5.3% | +12.0% | +7.6% |
| 2015 | -2.8% | +1.2% | +1.3% |
| 2014 | +9.6% | +13.5% | +11.7% |
| 2013 | -2.4% | +32.3% | +16.9% |
| 2012 | +6.2% | +16.0% | +11.1% |
| 2011 | +11.3% | +1.9% | +7.4% |
| 2010 | +13.3% | +15.1% | +12.8% |
| 2009 | +7.2% | +26.4% | +13.1% |
| 2008 | +0.9% | -36.8% | -14.9% |
| 2007 | +10.1% | +5.1% | +7.2% |
The first year may be partial. Returns are net of trading costs.
Taxes on rotating
The results above are before taxes. This portfolio is rebalanced once a year: historically it turns over only 7% of the portfolio a year on average, so it generates few sales.
In most countries each sale of an ETF in a taxable account realises a gain or loss that may be taxed, so rotating monthly is best done inside a tax-advantaged account (such as an IRA or 401(k) in the US, or an ISA or SIPP in the UK) where one is available. Rules vary by country and by account: check yours, or ask a tax adviser. See our methodology for how the results are calculated.
Criticisms and limits
Moderate long-term return, because half the portfolio (gold and cash) generates no cash flows. Long bonds are very volatile, as 2022 showed, and the portfolio does not react to anything - it is only rebalanced.
- Modest long-term return: having 50% in assets that generate no cash flows (gold and cash) drags on growth.
- Long bonds are volatile: in 2022 TLT suffered very sharp falls.
- It is not a tactical strategy: it does not react to what happens, it is only rebalanced.
How to run it
- Pick a fixed date each year to rebalance and stick to it.
- Check the current portfolio in this page's signal.
- Work out the orders with the rebalancing calculator, which flags the tax effect.
- Place them with ETFs.
Similar strategies
All Weather Portfolio
30% stocks, 55% bonds, 15% gold and commodities; annual rebalancing
Passive · AnnualCoffeehouse Portfolio
40% bonds and 60% split equally across six equity categories; annual rebalancing
Passive · AnnualThree-fund portfolio (Bogleheads)
US stocks, international stocks and bonds; annual rebalancing
Frequently asked questions
How often is the Permanent Portfolio rebalanced?
Browne proposed doing it once a year or when any asset drifts far from its weight. In our backtest it is done at the end of December.
Can it be built with funds listed outside the US?
Yes. There are ETFs for the S&P 500, long-term US Treasury bonds, physical gold and T-bills or money-market funds in most markets.
Is it a good portfolio for retirement?
It depends on your horizon and risk tolerance. It is a defensive portfolio with moderate returns. For personal decisions, consult an authorised financial adviser.
Sources and review date
- Browne, "Fail-Safe Investing" (1999). Book not consulted directly
Page last reviewed on October 8, 2026; figures and signal are recalculated at every monthly close (latest: September 30, 2026). How we work: editorial policy and methodology.
Educational and informational content. It is not investment advice or a personal recommendation. The results shown are historical simulations (backtests) using US-listed ETFs; past performance does not guarantee future results and you may lose some or all of the capital invested. Real returns will depend on your costs, taxes, currency and execution timing.