Harry Browne Permanent Portfolio: does it still work? Replicated through 2026
We re-ran it on S&P 500, Gold from 2010-01-04 to 2026-11-10 (16.8 years, before costs): +5.8% a year, Sharpe 0.93, worst drawdown -10.3%. The benchmark, S&P 500 buy-and-hold, did +13.8% a year (Sharpe 0.85, worst drawdown -33.7%).
Verdict: About the same risk-adjusted return as its benchmark. Historical, hypothetical results before costs, taxes and fees. Not investment advice.
This is our adapted version, not the real portfolio or fund. Read what is lost before comparing it with anything published about the original.
What is lost
- The 25% long-term bond sleeve is cash earning 0%, so the deflation/recession leg of the design is missing.
- Gold is the GLD ETF, stocks are SPY.
25% of the original allocation is government bonds. We have no bond data, so that 25% is held as cash earning 0%.
What this means: no coupon income, no price gains when yields fall or stocks crash, and none of the losses bonds had when yields rose (2022). Read the results as the non-bond part plus idle cash. The real portfolio would have done differently, better in some years and worse in others.
Where it comes from
A classic four-season portfolio designed to survive prosperity, inflation, deflation and recession.
Rules, weights and thresholds are given as commonly cited. We have not re-checked them against the primary text.
The original rules
Equal 25% in stocks, long-term government bonds, gold and cash, rebalanced when allocations drift materially (commonly annually).
How we replicate it
What we changed
Long bonds are replaced by cash, giving 25% SPY, 25% GLD, 50% cash; the bond-driven protection against deflation/recession is lost.
The exact rule we run
Buy 25% SPY and 25% GLD and keep 50% in cash (0%): the original's 25% cash plus the 25% bond sleeve that we cannot trade. Rebalance to those weights at the last close of each year.
Target weights: 25.0% S&P 500, 25.0% Gold, 50.0% Cash (0%).
Conventions: Position decided at a close earns the next day's return; no look-ahead; before costs; cash earns 0%; starts 2010-01-04, when all its assets have data; weights drift between rebalances (annually); rebalanced at the last close of the period.
Growth of 1 vs the benchmark
Benchmark: S&P 500 buy-and-hold, same period. Bought on the first day and held.
Drawdown from the previous peak
Key numbers
Sample: 2010-01-04 to 2026-11-10, 16.8 years, 4240 daily observations. Annualised from the number of observations per year of the strategy's own calendar. Before costs.
Recent and full-period returns
| Period | Replica | Benchmark |
|---|---|---|
| Last month | -2.0% | -3.7% |
| Last year | +2.7% | +11.2% |
| Last 5 years | +44.2% | +72.9% |
| Whole period (cumulative) | +157.2% | +788.9% |
Calendar-year returns
| Year | Replica | Benchmark | Replica minus benchmark |
|---|---|---|---|
| 2026* | +1.0% | +10.8% | -9.8% |
| 2025 | +20.3% | +17.7% | +2.6% |
| 2024 | +12.9% | +24.9% | -12.0% |
| 2023 | +9.7% | +26.2% | -16.5% |
| 2022 | -4.7% | -18.2% | +13.4% |
| 2021 | +6.1% | +28.7% | -22.6% |
| 2020 | +10.8% | +18.3% | -7.5% |
| 2019 | +12.3% | +31.2% | -19.0% |
| 2018 | -1.6% | -4.6% | +2.9% |
| 2017 | +8.6% | +21.7% | -13.1% |
| 2016 | +5.0% | +12.0% | -7.0% |
| 2015 | -2.4% | +1.2% | -3.6% |
| 2014 | +2.8% | +13.5% | -10.6% |
| 2013 | +1.0% | +32.3% | -31.3% |
| 2012 | +5.6% | +16.0% | -10.3% |
| 2011 | +2.9% | +1.9% | +1.0% |
| 2010 | +9.9% | +13.1% | -3.3% |
* Partial year. The first year starts on the first day of the replica; the current year is year to date.
Position as of 2026-11-10
| Holding | Weight |
|---|---|
| S&P 500 SPY | 27.4% |
| Gold GLD | 23.1% |
| Cash (0%) | 49.5% |
Weights today, after drifting since the last rebalance on 2025-12-31. Target weights are in the rule above. Drawdown from its peak today: -5.4%.
What it did in 2020 and 2022
| Episode | Dates | Replica | Benchmark |
|---|---|---|---|
| COVID crash | 2020-02-19 → 2020-03-23 | -9.6% | -33.7% |
| 2022 bear market | 2022-01-03 → 2022-10-12 | -8.0% | -24.5% |
Close to close between the two dates. Two episodes only: not enough to judge a strategy.
How much to trust it
- A fixed allocation has no signals, so it is one path of history (16.8 years), not a test.
- This is one backtest on one path of history, before costs and with hindsight on the choice of strategy. It does not show the strategy will work in future.
Honest caveat
Half of the original (the bond leg) is replaced by zero-yield cash, so this is a partial replica.
Related
Other famous strategies
Historical, hypothetical results before costs, taxes and fees. Not investment advice.