Author Topic: Permanent Portfolio vs All Weather Portfolio  (Read 1688 times)

Tonyahu

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Permanent Portfolio vs All Weather Portfolio
« on: January 08, 2018, 03:30:55 PM »
Hey all,

I want to hear your opinion on both of the above.

I want to put away ~1M into a long term passive portfolio and don't have the risk tolerance (at the moment) for 100% stocks.

This would be immediately drawn down from using 4% rule.

Thanks!

steveo

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Re: Permanent Portfolio vs All Weather Portfolio
« Reply #1 on: January 08, 2018, 03:36:47 PM »
Just go 50% stocks and 50% bonds. That should hold up better than the portfolio's that you are considering compared to 100% stocks.

Tonyahu

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Re: Permanent Portfolio vs All Weather Portfolio
« Reply #2 on: January 08, 2018, 03:45:36 PM »
Just go 50% stocks and 50% bonds. That should hold up better than the portfolio's that you are considering compared to 100% stocks.

What about if we see a strong correlation between Equities and Bonds during next crash? It would be nice to have some TIPS, Cash or Gold to help buy the dip.

RichMoose

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Re: Permanent Portfolio vs All Weather Portfolio
« Reply #3 on: January 08, 2018, 04:15:23 PM »
The Permanent, All Weather, Golden Butterfly, and Three Fund are all decent passive asset allocation portfolios. They all have a 25% or lower one-year drawdown based on historical data.

What about if we see a strong correlation between Equities and Bonds during next crash? It would be nice to have some TIPS, Cash or Gold to help buy the dip.

You can slice and dice to the ends of the earth, but no one knows the future. The U.S. government could go to war, seize gold, lock up the stock market, experience hyperinflation, and revalue their debt in a matter of years if the circumstances were right (it's happened before in developed countries).

Just pick an asset allocation that roughly fits your loss tolerance based on historical data and go with it. Keep a year of expenses in cash on the side and you should be able to weather pretty much anything that is reasonable.