Permanent Portfolio

It’s with great pleasure we offer you the opportunity to learn and profit from a unique investment strategy called Permanent Portfolio.

While Permanent Portfolio has been around for many years, we did not “invent” it.  In fact, Permanent Portfolio has a track record dating back to 1972.  The late Harry Browne and Terry Coxon first introduced Permanent Portfolio in their 1981 book “Inflation Proofing your Investments”.  In his 1987 book “Why The Best Laid Investment Plans Usually Go Wrong” Harry Browne refined a more complicated version of Permanent Portfolio to its current simplistic form.

While Permanent Portfolio is simplistic, it is not simple.  The Permanent Portfolio is an asset allocation strategy based on economic cycle analysis separated into four basic categories:

1.        Prosperity                                          3.  Deflation

2.        Inflation                                             4.  Recession

At any point in time the economy will be in one of these phases or transitioning from one phase to another.  The strategy does not attempt to predict which phase we are in or guess how long it may last.  Instead, it holds four specifically chosen asset classes at least one of which will respond well to the current phase.  This is the “secret” of the strategy and why it works.  No forecasts, predictions or guessing.  Instead, it utilizes a simple, yet disciplined, pre-determined strategic asset allocation.

Our aim in launching Permanent Portfolio was twofold.  First, offer all investors a simple, cost and tax efficient investment solution devoid of decision-making with a history of delivering solid returns.  Secondly, offer investors an investment solution that is easy to understand, implement and follow that is based on common sense!

Most importantly from our perspective Permanent Portfolio honors the core values I have established as the absolute keys to long-term investment success namely discipline, consistency of strategy and the power of compounding.  If your investment portfolio were a house, Permanent Portfolio would be the foundation!

National Bank Financial - Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada. (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The present document may not be reproduced either wholly or in part. It must not be distributed or published or be mentioned in any way whatsoever. No mention of the information, opinions and conclusions it contains may be made without the express written pre-approval of NBF for each instance.

The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The information contained herein has been prepared by Alan Kemp, an investment advisor at NBF. The opinions expressed do not necessarily reflect those of NBF.