Permanent Portfolio
TacticalFreeconservativeRobustness 1.00Based on research by Harry Browne · Browne, H. (1999). Fail-Safe Investing
This is BestFolio's independent implementation. Not affiliated with or endorsed by the original author.
Launched Sep 1999About this Strategy
The Permanent Portfolio, created by Harry Browne, is a classic all-weather allocation that divides the portfolio equally (25% each) across four asset classes: stocks, long-term bonds, gold, and cash. An optional tactical variant applies a 200-day SMA trend filter to the three risky assets (stocks, bonds, gold), shifting any below-trend allocation to cash for additional downside protection.
Strategy Rules
- 1Static variant: 25% SPY + 25% TLT + 25% GLD + 25% BIL
- 2Tactical variant: apply 200-day SMA filter to SPY, TLT, and GLD
- 3If risky asset is above its 200-day SMA → hold the 25% allocation
- 4If below 200-day SMA → shift that 25% to BIL (cash)
Asset Universe
4 instruments this strategy can hold
Key Differentiators
Research Source
Strategy Info
- Type
- Tactical (TAA)
- Frequency
- monthly
- Next Rebalance
- Aug 309:30 ET (30d)
- Variants
- 2
- Risk Category
- conservative
- Regime
- Mixed
- Signal Date
- 2026-07-31
- Tags
- all-weather
- Type
- Tactical Asset Allocation (TAA)
- Trading Frequency
- Monthly (last trading day)
- Rebalancing
- Full portfolio rebalance each month
- Universe Size
- 4 assets (SPY, TLT, GLD, BIL)
- Allocation Method
- Equal weight 25% per asset class
- Tactical Variant
- Optional 200-day SMA filter on risky assets (SPY, TLT, GLD)
- Cash Mechanism
- Tactical variant: assets below 200-day SMA → allocation moved to BIL
- Data Source
- Institutional-grade market data
Asset Classes
Permanent Portfolio at a glance
Permanent Portfolio is a tactical asset allocation (TAA) strategy by Harry Browne across US Equity, Long-Term Treasuries, Gold, T-Bills/Cash, rebalanced monthly. Backtested 1961-02-28 to 2026-07-03 (65.3 years): 7.2% CAGR, 1.08 Sharpe, -17.3% max drawdown, 5.3% volatility.
- Type
- Tactical (TAA)
- Author
- Harry Browne
- Rebalancing
- Monthly
- Risk
- Conservative
- Period
- 1961-02-28 to 2026-07-03
- CAGR
- 7.2%
- Sharpe
- 1.08
- Max Drawdown
- -17.3%
- Volatility
- 5.3%
Permanent Portfolio — Tactical Asset Allocation Strategy
The Permanent Portfolio, created by Harry Browne, is a classic all-weather allocation that divides the portfolio equally (25% each) across four asset classes: stocks, long-term bonds, gold, and cash. An optional tactical variant applies a 200-day SMA trend filter to the three risky assets (stocks, bonds, gold), shifting any below-trend allocation to cash for additional downside protection.
Permanent Portfolio: frequently asked questions
- What is Permanent Portfolio?
- Classic four-quadrant allocation: 25% each in stocks, long bonds, gold, and cash. Designed to perform in any economic environment. Optional tactical variant applies a 200-day SMA filter to shift below-trend assets to cash. Monthly rebalancing.
- Who created the Permanent Portfolio strategy?
- Permanent Portfolio was developed by Harry Browne. It is based on Browne, H. (1999). Fail-Safe Investing.
- What is the historical return and maximum drawdown of Permanent Portfolio?
- Backtested from 1961-02-28 to 2026-07-03, Permanent Portfolio returned 7.2% CAGR with a -17.3% maximum drawdown and a Sharpe ratio of 1.08. Past performance does not guarantee future results.
- How often is Permanent Portfolio rebalanced?
- Permanent Portfolio is rebalanced monthly. BestFolio publishes the updated allocation signal each period.
- Is Permanent Portfolio a tactical asset allocation strategy?
- Yes. Permanent Portfolio is a tactical asset allocation (TAA) strategy: it adjusts its holdings based on market signals each period rather than holding a fixed allocation.
Backtest Performance (1961-02-28 to 2026-07-03)
| Metric | Permanent Portfolio |
|---|---|
| Compound Annual Growth Rate (CAGR) | 7.2% |
| Maximum Drawdown | -17.3% |
| Sharpe Ratio | 1.08 |
| Sortino Ratio | 1.76 |
| Annualized Volatility | 5.3% |
| Calmar Ratio | 0.41 |
| Total Return | 9091.9% |
| Backtest Period | 65.3 years |
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- monthly
- Risk Level
- conservative
- Variants
- 2
- Author
- Harry Browne
- Source
- Browne, H. (1999). Fail-Safe Investing
Asset Classes
- US Equity
- Long-Term Treasuries
- Gold
- T-Bills/Cash
Categories
Further reading
New to this approach? Read what tactical asset allocation is and how it works.
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Related research
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- Which TAA Strategies Actually Work in Europe: A UCITS Substitution GuideEuropean investors hit a wall the moment they try to run a US TAA strategy through IBKR: PRIIPs blocks AVUV, DBC, and most US-domiciled ETFs from retail purchase. The substitutes exist on XETRA and LSE, but they're not all equal. Some strategies translate cleanly (HAA, GEM, Permanent Portfolio). Others lose 50 to 100bps of CAGR per year through methodology drift on the small-cap-value sleeve. A few don't really translate at all. Here's the working playbook, split into three tiers.
Related features
- STRATEGY BLENDINGCombine strategies into a single portfolio. See the math.
- PORTFOLIO BUILDERTrack your real allocation alongside what the strategy says.
- STRATEGY COMPARISONSide-by-side: pick 2 to 5 strategies, see them on the same axis.
- CORRELATION ANALYSISDiversification only works when strategies disagree at the right times.