Permanent Portfolio: backtest, returns and drawdowns
Four equal quarters in stocks, long bonds, gold and cash, one for each economic season.
Data updated October 2026
Created by: Harry Browne
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US stocks | VTI | 25% |
| Long-term US Treasuries | TLT | 25% |
| Gold | GLD | 25% |
| Treasury bills (cash) | BIL | 25% |
From June 2020 to October 2026 the Permanent Portfolio returned 7.0% a year on average, with annual volatility of 8.3%. Its deepest fall was 17.5%, from November 2021 to October 2022, recovered in about 29 months.
Its best year was 2025 (+22.3%) and its worst 2022 (−12.5%).
Over the same period 100% US stocks returned 16.8% a year with a maximum fall of 25.4%.
Key figures
- Annual return (CAGR)
- +7.0%
- Annual volatility
- 8.3%
- Maximum drawdown
- −17.5%
- Recovery time
- 29 months
- Sharpe
- 0.52
- Sortino
- 0.73
- Worst year
- 2022: −12.5%
- Positive years
- 4/5
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Permanent Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +1.8% | +8.0% | +14.7% |
| 2025 | +22.3% | +13.1% | +17.1% |
| 2024 | +11.9% | +14.8% | +23.8% |
| 2023 | +11.6% | +17.9% | +26.1% |
| 2022 | −12.5% | −17.0% | −19.5% |
| 2021 | +4.2% | +14.6% | +25.7% |
| 2020(partial) | +8.6% | +16.5% | +26.4% |
How it works
Prosperity favours stocks, deflation long bonds, inflation gold and recession cash; holding all four avoids betting on which comes next.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
What is the Permanent Portfolio?
Four equal quarters in stocks, long bonds, gold and cash, one for each economic season. Allocation: 25% us stocks, 25% long-term us treasuries, 25% gold, 25% treasury bills (cash). Created by: Harry Browne.
What is the Permanent Portfolio return?
In the backtest from June 2020 to October 2026 it returned 7.0% a year on average, with a maximum drawdown of 17.5%. 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 Permanent Portfolio?
17.5%, from November 2021 to October 2022; it took about 29 months to get back to the previous high.
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- Versione italiana
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.