Permanent / All WeatherCapital preservationMulti-assetDefensiveLow complexity

Desert Portfolio

A defensive Permanent Portfolio-inspired allocation that reduces cash and increases exposure to stocks, long bonds and gold.

Asset allocation

Stocks

30%

Long Bonds

30%

Gold

30%

Cash

10%

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History

The Desert Portfolio is a modern community-style variation of Harry Browne’s Permanent Portfolio rather than a canonical model from a single published source. The original Permanent Portfolio divided wealth equally between stocks, long-term bonds, gold and cash. The Desert Portfolio keeps the same regime-based logic but changes the balance: cash is reduced from a large defensive sleeve to a smaller liquidity reserve, while stocks, long bonds and gold each receive larger weights. The result is a simpler 30/30/30/10 structure aimed at investors who like the Permanent Portfolio idea but view a 25% cash allocation as too conservative in modern markets.

Philosophy

The Desert Portfolio is built on the same humility as the Permanent Portfolio: the future can bring prosperity, deflation, inflation, recession or monetary stress, and investors should not rely on forecasting which regime comes next. Stocks represent prosperity. Long bonds represent deflation and falling-rate shocks. Gold represents inflation, currency stress and monetary disorder. Cash provides liquidity and psychological stability. Compared with the original Permanent Portfolio, this version accepts more volatility and less dry powder in exchange for greater exposure to return-generating or crisis-responsive assets. Its strength is simple regime diversification. Its weakness is that reducing cash removes part of the original portfolio’s shock absorber.

Implementation

Local products and proxies

🇪🇸 Spain implementation

Spain-based defensive investor who wants a Permanent Portfolio-inspired allocation with less cash drag and stronger exposure to stocks, long bonds and gold.

Stocks: use a broad global equity UCITS ETF or index fund such as VWCE, IWDA, EUNL or a low-cost MSCI World/ACWI fund.

Long Bonds: use long-duration high-quality government bond exposure. For a euro investor, long-duration EUR government bonds are usually more coherent than unhedged US Treasuries because this sleeve is meant to stabilize purchasing power in the investor’s base currency.

Gold: use physically backed gold ETCs such as SGLD, PHAU or similar products, or physical bullion if storage, insurance and custody risks are understood.

Cash: use Letras del Tesoro, insured deposits, remunerated cash, EUR money-market funds or very short-term EUR cash ETFs such as XEON.

Account notes: Spanish investors should treat each sleeve as serving a different macro role. Equity exposure can be implemented through UCITS ETFs or eligible fondos de inversion. Fondos may allow tax-deferred transfers, which can help with rebalancing. Gold ETCs generally do not receive the same tax treatment as eligible fondos. Cash may sit outside the broker in deposits or Letras del Tesoro. The long-bond sleeve should not be replaced with generic short-duration bonds, because duration is the intended deflation hedge.

Costs: This portfolio is simple, but each sleeve must be implemented precisely. Long bonds should carry meaningful duration. Gold products should have transparent backing, liquidity and reasonable spreads. Cash should remain liquid and safe rather than being stretched for yield. Avoid replacing cash with risky credit or replacing gold with broad commodities unless intentionally building a different portfolio.

Rebalancing: Rebalance annually or when any sleeve drifts more than roughly 5 percentage points from target. Because stocks, long bonds and gold can each dominate in different regimes, rebalancing is central to the strategy. Use new contributions first to refill underweight sleeves and reduce taxable sales.

Tax: Spanish taxation differs across fondos, ETFs, ETCs, Letras, deposits and money-market funds. Eligible fondos may allow tax-deferred transfers, while ETFs and ETCs generally do not. Gold products may have different reporting and tax implications. Interest from deposits, Letras and money-market funds is taxed differently from capital gains. The best implementation may depend more on tax wrapper and rebalancing needs than on tiny TER differences.

VWCEIWDAEUNLIBGLSGLDPHAUXEONLetras

Product names are implementation examples for research. Availability, taxation, share classes and suitability should be checked with the investor's broker and tax situation.

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European Permanent Portfolio

A European implementation of the Permanent Portfolio using European or global stocks, government bonds, gold and cash.

7Twelve Portfolio

A highly diversified multi-asset portfolio with 12 equally weighted sleeves across seven asset groups, designed to smooth returns across economic regimes.

US Stocks8.3%

International Developed Stocks8.3%

Emerging Markets Stocks8.3%

US Bonds8.3%

Others66.6%

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