The Permanent Portfolio certainly has a great track record over the years. But the run-up in gold and bond prices have created concerns about a potential "bubble". Rising interest rates will be good for the money market portion of the portfolio, but not good for the long-term bond portion. And I am not sure what rising interest rates would do to gold prices.
Is anyone aware of any analysis of the sensitivity between the four Permanent Portfolio components? For example, if gold decreases 10%, what is the potential impact on the other three components?
Your feedback is appreciated.
Ed
PP Component Sensitivity
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Snowman9000
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Re: PP Component Sensitivity
I think the answer has to be "it depends" on what caused gold to drop. Deflation? Prosperity?
Right now, due to Fed actions, demand is being driven up for all "risk assets", such as gold, stocks, and bonds. If they reverse course or the action comes to be seen negatively, it's conceivable that all could drop hand in hand.
Right now, due to Fed actions, demand is being driven up for all "risk assets", such as gold, stocks, and bonds. If they reverse course or the action comes to be seen negatively, it's conceivable that all could drop hand in hand.