Harry Browne Permanent Portfolio Review, Performance, & ETFs (2026)

Financially reviewed by Patrick Flood, CFA.

The Harry Browne Permanent Portfolio is a simple, straightforward portfolio consisting of 4 equally-weighted assets. Here we'll look at its allocations, historical performance, and the best ETFs to use in its construction in 2026.

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What Is the Permanent Portfolio?

The Permanent Portfolio is a simple 4-slice portfolio created by investment advisor Harry Browne in the 1980's and presented in his book Fail-Safe Investing in 2001. Its allocations look like this:

• 25% Total US Stock Market
• 25% Long-Term Bonds
• 25% Cash
• 25% Gold

Not unlike the All Weather Portfolio, the Permanent Portfolio was designed to be a simple, diversified portfolio that could perform well in all economic conditions. Browne called it the Permanent Portfolio because, in his words, “once you set it up, you never need to rearrange the investment mix— even if your outlook for the future changes.”

Having only 4 assets at equal weights, it is easily accessible and understandable. The Permanent Portfolio's equal weighting isn't random.Those 4 assets' expected behaviors correspond to 4 economic climates as follows:

• Stocks – economic expansion
• Bonds – deflation
• Cash – economic recession
• Gold – inflation

Specifically, Browne argued the economy is always in one of four states, and since nobody knows which state comes next, you hold the asset that thrives in each:

The correlation data bears Browne's logic out. Looking at roughly the past half-century, the pairwise correlations between these four assets were extraordinarily low, in some cases slightly negative. When your four buckets don't move together, the aggregate is smoother than any individual piece.

Of course, note that this doesn't mean the Permanent Portfolio always has low volatility. Look at 2022, which was the worst year ever for the Permanent Portfolio, when stocks and bonds both gradually fell in tandem.

Interestingly, Browne did not advocate for calendar rebalancing, but rather rebalancing only when any single asset class drops below 15% or rises above 35% of the total portfolio, and otherwise leaving it alone.

Harry Browne – A Brief History

Most portfolios are invented by finance academics or Wall Street types who've never missed a paycheck. Harry Browne was neither.

Browne was born in New York in 1933, dropped out of college after two weeks, and spent a few years in the Army stationed at Bikini Atoll, where they were testing hydrogen bombs in the 1950s. He then worked in advertising and sales before teaching himself to invest. No MBA. No CFA. No Bloomberg terminal. Just a guy who read obsessively and who was deeply suspicious of anyone who claimed to know what the economy was going to do next.

His first book, How You Can Profit from the Coming Devaluation (1970), hit the NYT bestseller list. Less than a year after he argued the US dollar would be devalued, Nixon ended dollar-gold convertibility. Then his 1974 follow-up – You Can Profit from a Monetary Crisis – spent 39 weeks on the bestseller list and hit #1. He was 2 for 2 on macro calls that the entire economics establishment had missed.

But rather than doubling down on market timing and building a career as a financial forecaster, Browne eventually concluded that no one can predict macroeconomic outcomes reliably, including himself. His final major investment book, Fail-Safe Investing (1999/2001), was a complete repudiation of the market timing framework he'd built his early reputation on. The Permanent Portfolio was his conclusion after three decades of thinking about how ordinary people could actually protect their wealth without gambling on predictions.

He also ran for president twice as the Libertarian Party nominee (1996 and 2000), arguing for abolishing the income tax and ending the War on Drugs, which explains the “distrust the government” flavor of his portfolio design. He died of ALS in March 2006 at age 72, having written 12 books that sold over two million copies combined.

The practical upshot of all this is that the Permanent Portfolio isn't some quant's backtest optimization. It's the life's work of a self-taught investor who went from gold bug to passive advocate and tried to build a portfolio that could survive whatever any government might do to an economy, because he'd seen governments do a lot.

Permanent Portfolio Review

I concede that Harry Browne's Permanent Portfolio is indeed simple and diversified, and the concept sounds nice on paper. But I have a few problems with it.

First, there's the relatively low allocation to stocks. We know that equities are usually the primary driver of a portfolio's returns. At just 25%, the Permanent Portfolio doesn't give enough room for stocks to shine, especially for the young investor with a long time horizon and a high tolerance for risk.

Secondly, 25% of the portfolio is in cash, which just means treasury bills. I'll be the first to admit that cash is an oft-overlooked investment, but giving it 1/4 of the portfolio creates a significant opportunity cost in my opinion, especially when considering economic depressions are the least likely environment of the 4 aforementioned economic climates and young investors with a long horizon probably shouldn't be holding any cash.

Cash is recession insurance, no doubt. But the economy is in expansion roughly 80% of the time since World War II. You're paying a perpetual insurance premium for a tail event that, while it does occur, is, again, the least common of the four environments the PP is designed for. As such, I would think it's intuitive to lower the allocation to cash, creating room for more stocks and/or more bonds. In fairness, cash is a decent inflation hedge.

Thirdly, there are no international (ex-US) holdings. International stocks and bonds have just fairly recently become “accepted” diversification-boosting holdings in the last 25 years or so. Prior to that, they weren't popular among institutional investors, so it makes sense that Browne didn't include any when he designed the Permanent Portfolio in the 1980's. Ideally I'd probably like to see at least an 80/20 split for both stocks and bonds between the US and ex-US assets. I delved into the benefits of geographical diversification here. We can fix this one easily by just using a global stocks fund.

Similarly, 25% to gold is much too high for my tastes. If you've read any of my other posts on portfolios that utilize gold, you know I'm not a big fan of the metal. It has a nonnegative correlation to stocks, albeit low/small, is much more volatile than bonds, is not a value-producing asset (it has a real expected return of zero), and has not been a reliable inflation hedge historically. While it has offered protection in some inflationary periods in the past, we can't reliably predict how gold will behave in the future.

That doesn't mean gold is useless. I'm the first to admit 10% or so in gold may be reasonable to lower volatility and risk due to its reliably uncorrelation to other assets, but 25% is a hefty bet.

Again, I suspect the large emphasis on gold is due at least partially to Harry Browne's being the Libertarian Party presidential nominee in both 1996 and 2000. The Libertarian Party platform has a historical distrust of US monetary policy by the Federal Reserve and a suggestion of returning to the gold standard, wherein money is based on a fixed amount of physical gold.

Speaking of US monetary policy, your excitement – or lack thereof – over gold likely also depends on your view of it. I'm personally of the mind that monetary policy in the United States is a fundamentally different beast post-Volcker (1982), allowing us to [hopefully] avoid a runaway inflationary environment like we saw in the late 1970's, when bonds suffered and gold did well.

In my opinion, similar to my point about the cash position above, in a long-term investment portfolio with an investment horizon of 20+ years, holding gold only creates an opportunity cost where you could have held something else in its place. That said, I'll concede that it may offer a short-term diversification benefit due to its usual uncorrelation to both stocks and bonds, making for a lower risk profile and safer withdrawal rates in retirement, so adopting the Permanent Portfolio may very well be a prudent move at or near retirement, or for a risk-averse investor who wants to cover all bases for all environments to minimize volatility and risk, but even then I'd probably suggest the All Weather Portfolio or the Golden Butterfly Portfolio for that prescription. We can explore some comparisons of these below.

All that being said, the Permanent Portfolio has attracted a little more attention in 2025 with gold doing shockingly well.

Because of all this, generally speaking, Browne's naive equal weighting of these assets doesn't make much sense intuitively and is almost certainly suboptimal. This becomes even more obvious when we consider the fact that the four aforementioned environments do not have the same probability of occurrence. Severe, protracted deflation, for example, is extremely unlikely. Browne makes the mistake I see far too often of viewing each asset in isolation instead of looking at the portfolio holistically.

As we would expect, compared to something simpler and more “traditional” like a 60/40 stocks/bonds portfolio, the Permanent Portfolio tends to look attractive during bear markets and unattractive during bull markets, evidenced by the mutual fund's capital inflows and outflows during those respective periods.

None of the above means the Permanent Portfolio is a bad idea. It means it's a specific idea with a specific use case, and that use case has real costs. If you're a young accumulator with a 30+ year investment horizon and a high risk tolerance, the Permanent Portfolio's insurance premium is probably too expensive. If you're 65 and you can't afford to watch your portfolio drop 40%, the Permanent Portfolio's insurance premium might be the best money you spend.

Here's a simple honest framework for figuring out if the Permanent Portfolio makes sense for you.

The Permanent Portfolio probably makes sense if:

• You're within 10 years of retirement or already there. The Permanent Portfolio's max drawdown of ~19% (in its worst year ever) vs. the S&P 500's 51% drawdown in 2008-09 isn't a small difference when you're drawing down assets.
• You've demonstrated you sell investments when they drop, i.e. you have a low risk tolerance. Be honest with yourself. If you panic-sold anything in March 2020, a low-volatility strategy that keeps you invested has more value than a theoretically superior strategy you'll abandon.
• You're income-oriented and/or genuinely can't afford large losses. Capital preservation is a legitimate goal. Not everyone is optimizing for maximum terminal wealth.

The Permanent Portfolio probably doesn't make sense if:

• You have a stable income and a 20+ year horizon. The 1.5-2% annual return gap versus equities compounds brutally over decades. Over 30 years, that difference translates to roughly 40-60% less terminal wealth.
• You're in a tax-heavy taxable account and not maximizing tax-advantaged space first. Gold's 28% collectibles rate and the income from bonds and T-bills are all tax-inefficient.
• Your sole benchmark is maximum long-term wealth. The Permanent Portfolio will underperform a broad equity index over most long periods. Again, it's designed to, in exchange for something else.

Permanent Portfolio Performance – 8.51% CAGR

Going back to 1968 and looking through March 2026, the Permanent Portfolio has delivered a solid 8.51% CAGR with annualized volatility of only 7.32%.

Here's a performance backtest of the Permanent Portfolio versus the S&P 500 index and a classic 60/40 portfolio through March 2026:

As we'd expect, the Permanent Portfolio does a pretty great job of mitigating volatility and drawdowns, providing a much smoother ride than the S&P 500. Its volatility has been less than half that of the S&P 500, and its max drawdown during the Global Financial Crisis of 2008 was roughly 1/3 that of the S&P 500. It also does a better job on those things than the 60/40 portfolio.

As a result, you'll notice the Permanent Portfolio wins out on Sharpe, Sortino, and Calmar, which are measures of risk-adjusted performance.

Still, there's no denying the S&P 500 and 60/40 delivered a higher absolute return over the period. And we'd definitely expect that from 100% stocks, given the conservative allocations of the Permanent Portfolio. That's why I said I'd be more likely to use the Golden Butterfly Portfolio or the All Weather Portfolio with the expectation of squeezing out a little more return. I'll show those comparisons in the next sections.

Let's briefly touch on the resilience of the Permanent Portfolio – which is its whole purpose – by looking at some eventful decades:

Particularly notable is the famous Lost Decade of 2000-2009, when U.S. stocks finished down 10% after 10 years, and gold and bonds kept things afloat.

Gold also surged during the rampant inflation of the 1970s. Many say gold won't return to that former glory, but then it returned 64% in 2025.

Permanent Portfolio vs. Golden Butterfly Portfolio

The Golden Butterfly Portfolio simply takes those same assets in the Permanent Portfolio and specifically adds Small Cap Value stocks, a move that I'm a fan of. This invariably makes it comparatively more “aggressive” than the Permanent Portfolio, but we're still talking about a relatively low-volatility, well-diversified portfolio.

In taking up a larger stocks position, we're also tilting toward an expansionary economic environment. I'm okay with this; the economy grows more than it declines. Your adoption thereof may depend on your economic outlook. We're also simultaneously decreasing the allocations to cash and gold, which should also bode well for higher returns.

Here’s a backtest from 1968 through March 2026 comparing the Permanent Portfolio and the Golden Butterfly Portfolio:

As we’d expect, going back to 1968, we see greater absolute and risk-adjusted returns for the Golden Butterfly Portfolio, with slightly more volatility and a larger drawdown. This is due again to its inclusion of small cap value stocks. Looking at the Sharpe and Sortino ratios, measures of risk-adjusted return, we can see that we were better compensated per unit of “risk” by going with the Golden Butterfly Portfolio.

I’d definitely take the Golden Butterfly Portfolio over the Permanent Portfolio. In fact, many view the Golden Butterfly Portfolio as a “better Permanent Portfolio.”

Again, I like small cap value stocks, and I don’t want the Permanent Portfolio’s extra 5% in gold. To be fair to Harry Browne, we didn't even know about the Size and Value factors and the glamour of small cap value stocks when he designed this thing in the 1980's, and even if we did, there weren't really any products available with which to invest in them.

Permanent Portfolio vs. All Weather Portfolio

Compared to Ray Dalio's All Weather Portfolio, we're talking about more gold, more cash, less stocks, and less treasuries with the Permanent Portfolio. Like the Permanent Portfolio, the All Weather Portfolio is designed to “weather” any storm by utilizing diversification.

Interestingly, like Browne, Dalio also chooses to be market-agnostic with the All Weather Portfolio, admitting that we don't know what the future will hold, yet the allocations therein are obviously very different.

With my data for Commodities funds only going back to 1979, here's what the comparison looks like through March 2026:

Similar to the last comparison, the All Weather Portfolio has won out over that period on both a general and risk-adjusted basis, due again primarily to a lower allocation to gold and slightly more in stocks.

In this sense, again, while the Permanent Portfolio is very simple and easy to understand with its equal weighting of 4 assets, that's also its downfall. I'm of the mind that we can much more effectively deliver on the Permanent Portfolio's goal of de-risking the portfolio using different allocations, especially given our most recent understanding of asset pricing and how we might weight those assets more efficiently in diversified portfolios.

Permanent Portfolio Construction with ETFs Pie

If you do want to invest in the Permanent Portfolio, M1 Finance is a great fit thanks to its zero transaction fees, dynamic rebalancing for new deposits, and one-click manual rebalancing. I wrote a comprehensive review of M1 Finance here.

Utilizing mostly low-cost Vanguard funds, we can construct the Permanent Portfolio pie for M1 Finance with the following ETF's:

• VTI – 25%
• VGLT – 25%
• SGOV – 25%
• GLDM – 25%

You can add this pie to your portfolio on M1 Finance by clicking this link and then clicking “Add to Portfolio.” Investors outside the U.S. can find these ETFs on eToro.

Taking the Permanent Portfolio International

As I noted earlier, the Permanent Portfolio doesn't have any international exposure. It's probably a good idea to diversify geographically in stocks. Taking the stocks global simply requires replacing VTI (Vanguard's total US stock market ETF) with VT (Vanguard's total world stock market ETF). The portfolio and subsequent pie then look like this:

• VT – 25%
• VGLT – 25%
• SGOV – 25%
• GLDM – 25%

You can add this pie to your portfolio on M1 Finance by clicking this link and then clicking “Add to Portfolio.” Investors outside the U.S. can find these ETFs on eToro.

PRPFX – The Permanent Portfolio Fund

This post wouldn't be complete without mentioning there is actually a Permanent Portfolio fund, albeit not really the same thing we've been discussing.

If you've searched for the Permanent Portfolio, you've probably encountered the ticker PRPFX and wondered if you could just buy that instead of building your own four-ETF version. The answer is technically yes, but you should know what you're actually buying (and how much it costs).

PRPFX is not the Permanent Portfolio.

It was inspired by Harry Browne's framework, but fund manager Michael Cuggino (who has run it since 2003) runs it quite differently. The fund's actual target allocations look something like:

• ~20% gold bullion
• ~5% silver
• ~10% Swiss franc assets
• ~15% real estate and natural resource stocks
• ~15% aggressive growth stocks
• ~35% dollar assets (Treasuries, etc.)

You'll recognize a lot of that stuff – silver, Swiss francs, REITs, and growth stocks – don't appear in Browne's original framework. And critically, the fund significantly underweights long-term Treasuries relative to the true Permanent Portfolio, which changes the deflation-protection profile substantially.

Moreover, the expense ratio is 0.81%, roughly 13x what a DIY 4-ETF implementation would cost you. Over 30 years, that expense ratio difference compounds to a meaningful drag.

PRPFX is a reasonable shortcut for investors who want something in the spirit of the Permanent Portfolio and don't want to manage four separate ETFs. But it's meaningfully different from the original design, and the higher cost is a real headwind. If you have a tax-advantaged account and the discipline to manage a four-ETF portfolio, the DIY version is almost certainly better.

Leveraged Permanent Portfolio

What about creating a leveraged Permanent Portfolio? As I noted above, the Permanent Portfolio itself isn't super impressive in my opinion. But, as with the All Weather Portfolio, levering up those same assets may enhance returns while maintaining a reasonable risk profile similar to that of a 100% stocks position.

Just remember that using leverage – especially in the form of leveraged ETFs – increases portfolio risk and the potential for greater returns, but also the potential for greater losses. Do your own due diligence before blindly buying leveraged funds, and read the fine print on these products. They can potentially be extremely dangerous. I talked a bit more about leveraged ETFs and how they work here.

Having 25% cash and 25% long bonds is roughly the same as 50% intermediate bonds. Ideally, a 3x leveraged Permanent Portfolio would look like this:

• 25% 3x U.S. Stocks
• 50% 3x Intermediate Bonds
• 25% 3x Gold

Unfortunately, there are now no 3x gold ETFs available after UGLD went away. The next best option is UGL, which is 2x gold. Using that, we can achieve the intended exposure at 2.67x leverage like this:

UPRO – 22%
TYD – 45%
UGL – 33%

You can add this pie to your portfolio on M1 Finance using this link.

Here's how this would have worked out historically going back to 1987 versus the Permanent Portfolio and the S&P 500:

Interestingly, the leveraged version achieved higher general and risk-adjusted returns than the “normal” unleveraged Permanent Portfolio and the S&P 500.

You can add this pie to your portfolio on M1 Finance using this link.

Conclusion on the Permanent Portfolio

The Permanent Portfolio is basically a good introductory lesson on asset class diversification in my opinion. And props to Harry Browne for making the concept more mainstream.

The Permanent Portfolio does a great job of mitigating volatility and drawdowns, but in practice I'd be more likely to use the All Weather Portfolio or the Golden Butterfly Portfolio to achieve that goal. They seem demonstrably superior, as the Permanent Portfolio's simplicity is ironically also its weakness in my opinion. I created an arguably simpler, more aggressive portfolio with 3 assets called the Neapolitan Portfolio – and a much more complex one called the Factor Tank Portfolio – if this idea of extreme diversification intrigues you.

If all this multi-fund stuff still seems daunting, there's a Permanent Portfolio mutual fund for which the ticker is PRPFX. But it's pretty pricey at 0.83%. You'd come out far cheaper just using the funds I listed above and doing it yourself.

What do you think of the Permanent Portfolio? Let me know in the comments.

Are you nearing or in retirement? Use my link here to get a free holistic financial plan and to take advantage of 25% exclusive savings on financial planning and wealth management services from fiduciary advisors at Retirable to manage your savings, spend smarter, and navigate key decisions.

Disclosures: I am long UPRO and VTI in my own portfolio.

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Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.