The Permanent Portfolio

Harry Browne, the former Libertarian candidate for President and Investment Advisor is well known for his "Permanent Portfolio" theory.

According to Browne, one's assets should be invested:

25% in long term Treasury Bonds;
25% in short term Treasury Notes or Money Market accounts;
25% in a stock market Index Fund, such as the Vanguard S&P500 Fund. Said index fund should have the lowest possible cost to the investor;
25% in physical Gold - preferrably under your control and/or partially located in the safety deposit box of a foreign country.

In the 1970's Browne predicted the end of the U.S. Dollar and the rise of gold. Although he was partially correct in his prediction, he changed his investment philosophy in later years. Browne became convinced that it was impossible for anyone to predict the market or future events. As such, the Permanent Portfolio was designed to be simple and accomodate almost any possible future economy.

The returns over the years have been quite good: Perm Portfolio Returns