The World’s Best Investment Strategy That Nobody Seems To Like

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Let me show you an investment strategy that has had only four losing years since 1971. 

Its ugliest drop was in 1981 when it fell just 4.1 percent. 

In 2008, when stocks dropped about 37 percent, it lost less than 1 percent.

This portfolio makes sense. Why? 

Because, as recorded by Richard H. Thaler, in the Journal of Behavioral Decision Making, we hate investment losses more than we enjoy investment gains. 

Image courtesy of pixabay.com

Read the rest of the article at AssetBuilder





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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4 Responses

  1. Jeff Kowalsky says:

    OK Andrew,
    Very interesting article to say the least. You spelled it out very clearly. Can you give me a reason not to switch from the couch potato portfolio you sold me on just a few years ago?

    You keep me coming back for! Well done

    Jeff

    • Hi Jeff,

      The Couch Potato (which I use, personally) is more volatile. But historical performance between the Permanent Portfolio and the Couch Potato are similar. So…can you handle a bit of volatility? If not, the Permanent Portfolio would be for you. If you don’t freak out when your portfolio drops 20% in a given year, then it matters little. But if you do freak out when you money drops in value during a given year, The Permanent Portfolio might be the best platform for you. Personally, I don’t care when my account value drops. It’s always a temporary circumstance. But not everybody is like that. For them, The Permanent Portfolio might be a perfect platform.

      Cheers,
      Andrew

  2. Barry says:

    Hi Andrew

    How has the portfolio compared to the S&P 500 since 1971 to present day

    Is there an American accumulation index (growth and dividends reinvested)?

    • They performed similarly Barry. The S&P 500 outperformed The Permanent Portfolio by roughly 0.3% per year, on average. When markets soared, the S&P 500 did a lot better. When markets sank, of course, the Permanent Portfolio was able to catch up.

      Cheers,
      Andrew

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