Desert Portfolio: backtest, returns and drawdowns
Sixty percent intermediate Treasuries, thirty percent stocks and ten percent gold.
Data updated October 2026
Created by: Gyroscopic Investing
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| Intermediate US Treasuries | IEF | 60% |
| US total stock market | ITOT | 30% |
| Gold | GLD | 10% |
- Stocks 30%
- Bonds 60%
- Gold 10%
From October 2011 to October 2026 the Desert Portfolio returned 6.0% a year on average, with annual volatility of 6.3%. Its deepest fall was 19.3%, from December 2021 to October 2022, recovered in about 31 months.
Its best year was 2025 (+16.3%) and its worst 2022 (−15.0%).
Over the same period 100% US stocks returned 14.3% a year with a maximum fall of 35.0%.
Key figures
- Annual return (CAGR)
- +6.0%
- Annual volatility
- 6.3%
- Maximum drawdown
- −19.3%
- Recovery time
- 31 months
- Sharpe
- 0.71
- Sortino
- 1.01
- Worst year
- 2022: −15.0%
- Positive years
- 11/14
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Desert Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +1.9% | +6.9% | +12.7% |
| 2025 | +16.3% | +13.0% | +17.0% |
| 2024 | +9.4% | +14.8% | +23.8% |
| 2023 | +11.4% | +17.9% | +26.1% |
| 2022 | −15.0% | −16.9% | −19.5% |
| 2021 | +5.3% | +14.6% | +25.7% |
| 2020 | +14.7% | +15.4% | +20.7% |
| 2019 | +15.8% | +21.9% | +30.7% |
| 2018 | −1.2% | −3.1% | −5.3% |
| 2017 | +9.2% | +14.2% | +21.4% |
| 2016 | +5.0% | +8.3% | +12.1% |
| 2015 | −0.2% | +0.2% | −0.1% |
| 2014 | +8.9% | +9.7% | +12.2% |
| 2013 | +3.0% | +18.2% | +31.8% |
| 2012 | +7.3% | +10.4% | +14.7% |
| 2011(partial) | +2.8% | +3.1% | +4.1% |
History
- Created by
- Gyroscopic Investing
- Who
- Personal finance blog on low-drawdown portfolios
- Year
- 2010s
- Source
- Gyroscopic Investing (gyroscopicinvesting.com)
- Funds in the backtest
- 3
The Desert Portfolio comes from the Gyroscopic Investing blog, which explores portfolios built to keep drawdowns small and steady. It is a deliberately conservative mix: 60% intermediate Treasuries, 30% stocks and 10% gold.
It aims for modest but steady growth with rare deep falls, for investors who value stability above maximum return – for example in the years just before and after retirement.
Strengths and weaknesses
Strengths
- Small drawdowns for a portfolio with stocks
- Three funds only
- Gold adds a hedge that bonds lack
Weaknesses
- Low long-term growth with 60% in bonds
- Hurt when interest rates rise quickly
- No international stocks
How it works
Steady, modest growth with rare deep falls, for investors who put stability first.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. Where a Vanguard fund has a short price history in our data, an iShares fund on the same market is used (for example ITOT for VTI, IVV for VOO). No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
Who created the Desert Portfolio?
Gyroscopic Investing (personal finance blog on low-drawdown portfolios), 2010s. Source: Gyroscopic Investing (gyroscopicinvesting.com).
What is the Desert Portfolio?
Sixty percent intermediate Treasuries, thirty percent stocks and ten percent gold. Allocation: 60% intermediate us treasuries, 30% us total stock market, 10% gold. Created by: Gyroscopic Investing.
What is the Desert Portfolio return?
In the backtest from October 2011 to October 2026 it returned 6.0% a year on average, with a maximum drawdown of 19.3%. US dollars, before fees and taxes.
How often should it be rebalanced?
The backtest rebalances once a year back to the target weights. Rebalancing more often changes little and adds costs; some investors rebalance only when a weight drifts beyond a threshold.
What was the worst drawdown of the Desert Portfolio?
19.3%, from December 2021 to October 2022; it took about 31 months to get back to the previous high.
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Source: MarketStack end-of-day prices. Historical and educational content: not a forecast and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.