Fail Safe Investing
Harry Browne Portfolio.
Asset allocation is very important in growing your wealth , the correct mixture of assets provide a bullet proof during rough times. There are several asset allocation are available Buffet allocation , Ivy allocation, 60/40, 40/60, Seven twelve , Faber etc.
There is only one stands out in backtesting which is by Harry Browne Portfolio. The details of this investing is provided in detail in book Fail-Safe Investing: Lifelong Financial Security in 30 Minutes
The portfolio is super simple and believed in
- Stocks for Prosperity
- Bonds for Deflation
- Gold for Inflation
- Cash for Recession.
The portfolio is equal allocation of
- 25% stocks,
- 25% Bonds,
- 25% Gold ,
- 25% Cash.
Backtest from 1990 , this portfolio is amazingly performed very well in recession , market crash etc . The worst year it lost only 3% , average annualized returns is 6.5% per year.
Source : https://www.portfoliovisualizer.com
The same portfolio can be constructed using the ETF – Exchange traded Fund
- 25% – VTI – Vanguard Total Stock Market ETF
- 25% -VGLT – Vanguard Long Term Treasury
- 25% – GLD – SPDR Gold Trust
- 25% – Cash in Savings account / or Money Market Fund
The next nearest another Portfolio is is Ray Dalio portfolio , this allocation plan is discussed in detail in Tony Robbins MONEY Master the Game: 7 Simple Steps to Financial Freedom book as All weather fund.
The all weather fund allocation is
- 40% long term bonds
- 15% short term bonds
- 30% stocks
- 7.5% gold
- 7.5% commodities
What you think of your asset allocation plan ? Share your thoughts !!!