The Permanent Portfolio: Harry Browne's Long-Term Investment Strategy. Craig is also author of the Crawling Road blog and host of the permanent portfolio forum. In the episode we discuss the Permanent Portfolio strategy and many of the insights from Craig's new book. We talk about the way in which the Permanent Portfolio approach differs from other investment strategies including:
- The choice of being an independent investor as opposed to entrusting your money to someone else
- Achieving diversification in investing, as opposed to the Warren Buffet quote of "putting all your eggs in one basket and watching the basket very closely".
- Using an asset allocation strategy based on identifying how assets react to each of the possible economic conditions, as opposed to asset allocation based on correlation studies.
- The problems with trying to time the market in investing
- The benefits of a passive investing approach that rebalances according to a strategy of maintaining diversification.
We also talk about some particular practical issues relating to the portfolio including
- Creating your own portfolio versus using the Permanent Portfolio fund (and differences in the fund's approach to the classic PP strategy)
- The growth of passive indexing strategies in stocks and how this aspect of the Permanent Portfolio approach is now more mainstream
- Craig's thoughts on how best to own gold bullion and the tradeoff between convenience and safety.
- How the permanent portfolio can help independent investors in the current context of artificially low interest rates and Quantitative Easing.