Permanent Portfolio (Browne)
Harry Browne's Permanent Portfolio allocates 25% each to stocks, long-term bonds, gold, and cash. Its simplicity is its strength: four uncorrelated assets, rebalanced annually.
Forward-looking estimates over a long horizon, not a measurement of any past period. Built from J.P. Morgan’s 2026 Long-Term Capital Market Assumptions, annualized and compounded, with a 3.10% risk-free rate. The figures are in US dollars. J.P. Morgan publishes the same assumptions in 5 base currencies and the numbers differ between them, since the expected move in the currency is part of the forecast. This page is built once, on the dollar edition; the full app runs on whichever one you choose.
Allocation
What if you add Bitcoin?
These are forward-looking estimates rather than a backtest. Nothing below is what Bitcoin did; it is what the portfolio would return if every asset delivered its expected return from here. Each row funds Bitcoin by reducing the other positions proportionally.
The assumption doing the work is Bitcoin at 15.00% a year with 42.5% volatility. That is far below its history and deliberately so: a forward estimate for an asset this young is a judgment, not an extrapolation. It also explains why the returns below move less than people expect. A 10% position in a 15% asset can only add about a point a year to a portfolio, because it is 10% of the portfolio. What changes more than the return is the Sharpe ratio, which is the column worth reading.
| Portfolio | Return | Volatility | Sharpe |
|---|---|---|---|
| Base (Permanent Portfolio (Browne)) | 5.36% | 6.40% | 0.38 |
| With 5% Bitcoin | 6.15% | 7.00% | 0.47 |
| With 10% Bitcoin | 6.88% | 8.06% | 0.51 |
Returns are geometric (compound), forward-looking and in US dollars, built from J.P. Morgan’s 2026 Long-Term Capital Market Assumptions with Bitcoin at 15.00% (our own estimate). Sharpe ratio uses a 3.10% risk-free rate. No time period is involved: these are expectations for a long horizon rather than a measurement of any past window. For what this portfolio actually did, month by month, see the historical record back to 1970.
Harry Browne's four-way bet
Harry Browne designed the Permanent Portfolio in the 1980s around a simple insight: at any moment the economy is in one of four states: prosperity, recession, inflation, or deflation. You cannot reliably predict which is next. So instead of forecasting, you hold one asset that thrives in each: stocks for prosperity, long-term bonds for deflation, gold for inflation, and cash for recession. Twenty-five percent each, rebalanced once a year.
The elegance is the absence of decisions. There's no view to get right, no tactical timing, no schedule to obsess over. Whatever the world does, a quarter of the portfolio is positioned for it, and the annual rebalance quietly sells what's expensive to buy what's cheap.
What the Permanent Portfolio returns now
Forward-looking returns are moderate by design. Half the portfolio sits in gold and cash, and neither compounds the way equities do, so the expected return shown above sits below a balanced 60/40. Volatility is notably lower and the drawdowns are shallower.
That 50% in gold and cash is both the strength and the cost. It's what gives the portfolio its calm in a crisis, and it's what drags the long-run return in normal times. You're explicitly paying for insurance you may not need in any given decade.
Where it shines and where it disappoints
The Permanent Portfolio's best moments come in turmoil: inflation shocks, when gold carries the load; deflationary scares, when long bonds rally; equity crashes, when cash and gold hold firm. Its gold allocation is also the cleanest answer to the 2022 problem that hurt the 60/40, since gold doesn't move with the stock-bond correlation.
Its disappointing stretches are long, calm bull markets, where 75% of the portfolio isn't in the asset that's working. Investors who hold it need conviction precisely when it's lagging. As with All-Weather, that is exactly when most give up on it.
Who the Permanent Portfolio is for
It fits an investor who values simplicity and resilience over maximum growth: someone who wants a hands-off allocation, distrusts forecasting, and would rather never experience a 40% drawdown than capture every percentage point of a bull market. The once-a-year rebalance makes it genuinely low-maintenance.
It's a weaker choice for long-horizon accumulators who can ride out volatility, since they are likely better served by more equity. It suits no better anyone uncomfortable holding 25% in gold, which can go through long stretches of doing nothing. As with any of these models, a small Bitcoin sleeve is one way to add a fifth, modern source of non-correlation; the table above shows the effect on the numbers.
How these numbers are calculated
Expected returns and volatilities come from J.P. Morgan's 2026 Long-Term Capital Market Assumptions (30th edition), in US dollars. Portfolio risk is computed using the full 57×57 correlation matrix, measured from the assets' own monthly returns, not simple weighted averages. The Sharpe ratio uses 3.10% (US Cash) as the risk-free rate.
For full methodology details, see the methodology page.
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Frequently asked questions
What is the Permanent Portfolio?
The Permanent Portfolio, created by Harry Browne in the 1980s, allocates 25% each to stocks, long-term government bonds, gold, and cash. It is designed to perform acceptably in any economic environment with minimal maintenance: just rebalance once a year.
Does the Permanent Portfolio still work in 2026?
The Permanent Portfolio's strength is simplicity and true diversification across uncorrelated assets. Using J.P. Morgan 2026 forward-looking assumptions, it offers moderate returns with low volatility. The 25% gold allocation provides inflation protection that many traditional portfolios lack.