The 2023 Permanent Portfolio Update

Spoiler Alert: it's done better than the DOW or the S&P500 since 2015, much better

UPDATE: a prior version included inaccurate information on PYPL, which has been corrected. That’s what I get for doing this at 5 a.m.

Okay, my faithful readers and those who have been pestering me to get this one out. Apparently, there are more than a few who track this portfolio. The portfolio is an esoteric portfolio including foreign currency, bitcoin, stocks, and mutual funds. This posting is not investment advice and is for educational purposes ONLY.

For the uninitiated, on August 21, 2015, I put out to the public Karl’s Permanent Portfolio, and while you can read for a few hours all the updates and the original thought process for its creation, it is just a static supposed portfolio one could use to weather most financial storms and still do well. It is based on a multitude of theories gathered from myself, Harry Browne, Jim Rogers, etc. The sub-idea is to reduce tax exposure, at least for a while, by not incurring too many dividends, nor incurring excessive fees from trading or management fees. It is meant to be static, meaning NO trading. Even though, a strong argument could be made to reallocate at least once a year as any sane person would have been tempted to reduce the Bitcoin exposure and eliminate the Vanguard mutual funds all together, I set the portfolio in 2015, to “set it and forget it.” It is just another of my many experiments I do and it is what it is. I moved it from Wordpress here to Substack last year.

I must have ten disclosures wherever I have the portfolio mentioned and you can find the orginal page here. While the portfolio starts at a $1 million valuation, one could have started with $10 million or $10,000 or $100 and contributed each month via an auto-allocated financial institution (so long as their fees are reasonably low). In retrospect, I should have created an ETF and made a few shekels for my efforts.

UPDATE 2023

So…what’s the update? Over the last 8 years, the portfolio has had a total return of 442.50% while the DOW has returned 109.4% and the S&P500 returned 123% over the same time period. Here is the spreadsheet.

Best performer is of course Bitcoin (formerly NYSE Bitcoin Index) which started at a measly 3% of the portfolio, only to overtake everything like a roided out athlete on the football field. The next best performer has been NVR which recently Warren Buffett has discovered and has started buying. Though I would have gone with a similar builder which has performed better, a friend recommended NVR, so I put it in there. Another good performer has been PayPal which has been like a wild roller coaster ride on acid; one would have had a very strong stomach to continue to hold PYPL during this time.

The losers have been Vanguard’s global real estate fund (VGRLX) and investment grade corporate bonds (LQD). Although I used to be a fan of Vanguard, not so much these days, sadly. I still appreciate their low fees, but their performance of late has been lacking.