Your Investment Portfolio

This blog is meant to keep you informed and to educate you regarding money and investment decisions.  For some, it may just be confirmation of what you already know or a supplement to what you already know.  This blog is not really meant to tell you what to do.

With that said, some people want advice on their investment portfolio.  This is a difficult thing to do, as each individual's situation is so different.  Do you rent?  Do you own a house?  If so, do you own it free and clear (deflation hedge) or do you have a big mortgage (inflation hedge or perhaps just not smart)?  Do you have any other debt?  Do you have any major upcoming expenses?

So let's assume that you don't have any debt with the possible exception of a reasonable mortgage.  Let's also assume that you have an emergency fund.  Let's also assume that you have an average income with average expenses and you are not retired (although being retired may not necessarily change this).  If you have absolutely no idea on what to do with your money, then you should probably just invest it in Harry Browne's permanent portfolio, as laid out in his short book "Fail Safe Investing".  You can also invest in the mutual fund that is similar (symbol: PRPFX).

If you are more experienced and you want a higher risk/reward portfolio, it would still be a good idea to have some in a permanent portfolio fund.  Here is an approximate suggestion for a portfolio in our current environment.  Please note that this could change at any time and it is also not a guarantee to make you money.  There are no guarantees.

Put approximately 15% in stocks (some index funds, some specialized funds like energy).
Put approximately 5% in gold related stocks.
Put approximately 20% in gold and gold related investments (not stocks) like GLD.
Put approximately 20% in long-term U.S. government bonds.
Put approximately 5% in silver and silver related investments like SLV.
Put approximately 35% in cash or other short-term liquid investments like a cd or money market fund.

Although bonds may seem risky, you need some protection in case of another crash.  If you had your entire portfolio in bonds in late 2008, you would have done very well.  Most other investments, other than shorting the market, did not do well.

If the Fed starts to inflate again and the banks start to loan out more money, then you will want to decrease your cash position and increase your gold and silver positions.

Again, this is a very rough estimate and each individual has a different situation.  Use common sense and what you feel comfortable with.  And again, if you have no clue, just stick with the permanent portfolio.