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The purpose of this page is to suggest several different investment strategies. You may choose the one, or ones, which you believe are best for you, depending on your resources, age, family situation, objectives and other factors, especially your tolerance for risk.
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Plan 1 – Invest 100%
in the Permanent Portfolio Fund (PRPFX)
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| This plan is ideal for those with a very low tolerance for risk. For details about this plan see
Letter 2. Most of the widows and low net worth people in my investor group are using this plan. But it also works well for those who don’t want to spend any time researching and studying investments. According to the studies I have seen, it has out performed the stock market since it was first invented by Harry Browne about forty years ago, without the severe downswings during the bear markets of this period. In other words, it has provided stability as well as a safe haven during turbulent times. 2008 is an outstanding example of this.
PRPFX
fell 8.4% in 2008, compared to 40% to 60% declines for major stock and commodity indexes. It went up approximately 13.5% per year for the five years preceding 2008.
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Plan 2 – Use PRPFX
in combination with
Harry Browne's Variable Portfolio Strategy
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| This plan is ideal for those who are willing to expose some portion of their portfolio to higher risk with the objective of earning a higher return. This portion is called the Variable Portfolio and invests in speculations. To follow this plan, decide what portion of your savings you wish to keep in low-risk investments, and invest that portion in
PRPFX. Hold the variable remainder in cash and wait for recommendations for specific investments from Richard Maybury, myself, or other sources of your choosing. Grit your teeth and hold these investments through thick and thin until you get a sell recommendation from the source which recommended it, or another source you have confidence in. In my opinion, Maybury’s
Early
Warning Report (currently $149 per year, 800-509-5400, or
www.chaostan.com) is second to none. I would not attempt Plan 2 without it. If you select Plan 2, you may ignore the allocations in my portfolio. (See the last section of
Letter 22 for further information).
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Plan 3 – Follow
my portfolio
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| Simply follow what I am doing to the extent you are comfortable with it, using
my letters and my
portfolio.
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Plan 3A – Use PRPFX
in Combination with my portfolio
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| This plan is designed for those who want to keep a portion of their savings in
the Permanent Portfolio Fund (PRPFX)
and use my portfolio for the remainder. It is important to explain, because there are quite a few people presently using it. This plan will require a little extra work on your part. If you use it you will need to allocate the total market value of your investment in
PRPFX
and add it to my allocations as follows: 20% to physical
gold, 5% to physical silver, 42% to cash and 33% to growth stocks.
Note: Since there is no sub-category called “growth stocks” under my major stock allocation, you will need to create one. In other words, instead of SSRI, XLE, SA or any other specific stock investment, you will simply show 33% of your Permanent Portfolio investment as “growth stocks.”
(For example, US$10,000 in PRPFX would be split into $2,000
gold to go under physicals, $500 silver to go under physicals,
$4,200 USD cash to go under cash and $3,300 growth stocks to
go under stocks.)
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