Originally Posted by midnighter777
I currently have the following asset allocation:
Large Cap 48%
Mid/Small Cap 16%
Investment Grade 15%
High Yield 0%
International Bond 5%
Short Term 0%
I am considering switching to a Permanent Portfolio Asset Allocation. The allocation would be the following:
25% – Stocks (in a broad based stock index fund like the S&P 500)
25% – Long Term Treasury Bonds
25% – Gold Bullion
25% – Cash (in a Treasury Money Market Fund)
I would like to be able to retire in 4 to 9 years. I am currently 41 years old. About 59% of my asset allocation is in 401k or ROTH investments. About 41% is in after tax investments.
My overall net worth has increased since I started preparing for early retirement, I became more aggressive with this early retirement plan in the beginning of 2005. However, I think my savings rate has increased my net worth more so than my actual return on investments.
What do you think about the Permanent Portfolio asset allocation? What do you think I should consider before I make the switch to this type of asset allocation? Thank you for your advice!
Hello - I'm new to the forum (as of today) and am finding a range of topics here of interest.
I have a lot in common with the OP ~ same age (+1 yr) and similar AA (90/10). Portfolio growth was due to aggressive savings more than investment returns for the period of the past 2 decades. Even my retirement/after tax investment ratios are similar (50/50). Retired 3 years ago with hubby who is 100% equities.
We have strong stomachs after the market (& our investments) fell almost 50% only 1 month after quitting our jobs. Things have recovered well and we're on-track with our budget. We have a low annual spend and live simply on a boat - that is until maintenance time (or get struck by lightning as just happened in Sept...).
It's interesting to hear the various input to these AAs and different risk tolerance, etc. Best wishes to the OP in meeting your goals.