The Test Bench › famous_system

Does The Permanent Portfolio (Browne) actually work?

REAL

A measurable edge that survived the checks we ran.

The claim

25% each stocks / long bonds / cash / gold = stability in any economic climate — Harry Browne

What we did

Tested against Buy & hold SPY / honest reconstruction.

The result

Result: +7.1%/yr, Sharpe 0.96, maxDD -17% (vs SPY -55%), 2008 +0%, 2022 -12%

+7.1%/yr, Sharpe 0.96, maxDD -17% (vs SPY -55%), 2008 +0%, 2022 -12%

Verdict

The most genuinely crisis-proof of the lot, now proven across BOTH a deflationary crash (FLAT in 2008, while stocks fell -37%) AND an inflationary one (-12% in 2022). Best Sharpe here (0.96), a third of the market's drawdown. The price is the same as ever: ~half the long-run return of stocks. Real preservation -- just know that's what it is.

What the test did and did not do

net of real costs
tested out of sample
point-in-time data
checked for look-ahead

Almost nobody publishing a backtest says which of these they did. We list the ones we failed as well as the ones we passed.

Tested 2026-06-23. The same treatment, applied to every other system, is on the test bench.

← The Flight to Long Bonds (TLT) All findings Advance/Decline Ratio →

Written with AI assistance from our own test database. The numbers are computed, not composed.
General market commentary for education, not personalised investment advice. Backtested results are hypothetical. Trading carries a real risk of loss.