Permanent Portfolio Funds Offer Solid Performance in Any Market

The permanent portfolio fund is a unique type of investment that is designed to offer a solid performance regardless of what is going on in the market. Here are the basics of permanent portfolio funds and what they have to offer you as an investor.

Permanent Portfolio Fund

The idea for permanent portfolio funds was originated by adviser named Harry Browne. He had the idea of coming up with a mutual fund that could withstand any market conditions. This was accomplished by investing in many different types of securities. He put an emphasis on investing in things that you could find outside of the stock market.

Investment Mix

The original idea for the permanent portfolio was to invest in an equal proportion of stocks, bonds, cash, and gold. Therefore, the original investment mix was 25% of each type of investment. However, in today's market, the permanent portfolio fund has a slightly different composition. The current composition of the fund is 25% precious metals, 10% Swiss franc bonds, 15% real estate and natural resource stocks, 15% aggressive growth stocks, and 35% in government securities such as T-bills. Browne argued that this type of investment mix would properly diversify and investors funds regardless of what happened in the economy.

Performance

With this type of fund, you can provide yourself with a slow and steady growth curve. This type of fund has been proven to gain value steadily over time. During good times, it will not perform as well as the S&P 500. When the stock market is up, stocks are going to perform better as a rule. However, when the stock market is down, you will be able to get a superior performance from the permanent portfolio fund. The permanent portfolio fund tends to provide a very consistent rate of return annually.

Hedge Fund Similarities

This is basically a mutual fund that aims to be like a hedge fund. Hedge funds utilize very similar investment strategies in order to diversify their clients portfolios. However, with hedge funds, you have to be an accredited investor with large sums of money to invest. With the permanent portfolio fund, you can take advantage of hedge fund strategies without having the same amount of money to put into your investments.

Peace of Mind

Proponents of the permanent portfolio fund say that it can provide you with peace of mind as an investor. You do not have to be concerned with economic news announcements or any other disaster that you might see on the news. News announcements that send stock traders to their online trading platform will not really affect you when you invest in this type of fund. This makes it a good choice for those that want to invest their retirement dollars. You can feel relatively safe about providing yourself with a steady return in your retirement portfolio without taking on a lot of risk. The inherent value of the precious metals and the diversity of investing in bonds, stocks, and cash will help you effectively eliminate the risk of losing your investment.

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