July 2015 Update: This portfolio was liquidated on 20th Jul 2015 in favour of The Acquirer's Multiple strategy.
3-year absolute returns in USD terms: 7.4% (slightly more in SGD terms due to USD appreciation during this period)
On 18 Jun 2012, I started my own modified Permanent Portfolio (PP) strategy through US ETFs. My initial investment outlay is small, and every month, I would buy into the asset classes that has under-performed to rebalance them to the original planned allocation, which is as follows:
- US Stocks (VTI), 25%
- World ex-US Stocks (VEU), 25%
- Long-term Treasury Bonds (TLT), 30%
- Gold (IAU), 20%
Almost a year later during April 2013, I decided to rebalance every 6 months instead.
Below is the chart showing the performance of this portfolio, with some explanation following it.
- The percentage change of the 4 ETFs representing the different asset classes represents the percentage change of their respective daily closing price
- The red line representing the PP performance is obtained by dividing the total profit/loss by the total capital invested, with dividends payout, after deducting the withhholding tax taken into account. It represents the absolute percentage gain of the PP portfolio.
- Rebalancing is done by additional investment into the respective ETFs.
- There has been no selling done till now, i.e. the total invested amount increases each time during re-balancing, causing slight dip in PP portfolio's performance. This effect will diminish over time as the portfolio gets larger.