The first half of the year is over, time to check the Swiss permanent portfolio performance. As per the definition set by Harry Brown, the permanent portfolio should consist of 4 pillars:
Swiss Permanent Portfolio Version
Using the above template as basis and as explained in here, I split my investment within 3 funds:
- AUCHAH – The fund aims to primarily reflect gold’s performance, after deduction of the running costs. The fund’s assets are exclusively invested in physical Gold.
- CSBGC0 – The fund invests exclusively in bonds and other fixed or variable-rate debt instruments and rights, denominated in Swiss francs, of the Swiss Confederation, which are included in the Swiss Bond Index Domestic Government 7+.
- SPICHA – The fund’s investment objective is to replicate the price performance and returns of the Swiss Performance Index SPI(R). The SPI(R) comprises the about 230 largest stocks in the Swiss equity market.
- Cash – Using my own proprietary algorithm to trade with Darwinex.
January – June Performance
Just looking at the first three asset classes during the first six months. We can see that both equities and gold performed well, summing up to 16.46%:
This is somehow weird behavior as normally Gold and Equities are correlated reversely to each other, i.e. Gold tends to rise when Equities fall and vice versa. For me it shows that the market is not really certain what is going on, from one side rise of the equities is a good sign of stability and growth, but on the side gold appreciation shows a mood of uncertainty and worries.
The beauty of the permanent portfolio is it’s ability to generate positive revenue independently of the market behavior. There will always be a part which benefits of the current financial atmosphere. Growth environment will push the equities part upwards, inflation affects the gold and deflation affects positively the bonds. I created the Swiss version mentioned above since I want to remove the currency risk out of the equation.
I love this setup as it is so easy to build and maintain. Basically, you need to make sure there is always equal parts of your capital split between the assets. Once in every three months invest your saved capital and re-balance the portfolio, that`s about it.
Disclaimer: I am an amateur investor. I don
t have financial adviser license or any other financial license. The contents of this post are not professional guidance or recommendation to do any action with any financial instrument and you cant use them instead of consulting a professional who knows your specific needs. If you choose to use this information, you are doing it on your account and responsibility.