For those who may not know the Permanent Portfolio consists of:
25% S&P 500 index
25% Long term treasuries
25% Cash
25% Gold
This mix has returned a little over 9% the last 37 years and actually made 1.97% in 2008. It has only lost money a few times and the returns are steady. Your not going to be flying high with 40% returns when the market is on a tear but you shouldn't have any 10%+ losses either.
The premise behind it is that no one knows the future (16 months ago everyone was saying inflation was coming and to short long term treasuries -we actually got deflation and long term treasuries soared).
Each asset in the Permanent Portfolio will perform at different times. The stocks will do well in prosperity, the Long Term Treasuries will do well in deflation, and the Gold will do well in inflation. Each asset by itself except for the cash is highly volatile, but when you add them all together they balance each other out and you get consistent returns.
My portfolio actually resembles a "high octane" Permanent Portfolio. I don't have the cash, my stock allocation is higher and riskier and I don't have as much in gold. I like fooling around with different combinations to backtest using
Simba's spreadsheet. If you don't want to DL anything you can do much the same thing
here.