Harry Browne's Permanent Portfolio

• Hold 25% of your portfolio in U.S. stocks, to provide a strong return during times of prosperity.
• Hold 25% in long-term U.S. Treasury bonds, which do well during prosperity and during deflation (but which do poorly during other economic cycles).
• Hold 25% in cash in order to hedge against periods of “tight money” or recession.
• Hold 25% in precious metals (gold, specifically) in order to provide protection during periods of inflation.

To use the Permanent Portfolio, you simply divide your investment capital into four equal chunks, one for each asset class. Once each year, you rebalance your portfolio. If any part of your portfolio has dropped to less than 15% of the whole, or grown to over 35% of the total, then you reset all four parts to 25%.”

“Investing should be a process of taking part of the earnings from your career and allowing them to grow safely. It should not be a process that takes your hard earned money and allows it to be lost in the markets through risky bets.”