Science popularization: What is a permanent investment portfolio? Achieve an annualized return of 8%, making it a brainless investment portfolio suitable for ordinary people. A very simple investment strategy. From a practical perspective, Considered friendly to ordinary people. The name of the strategy is perpetual investment portfolio. It's an uncle named Harry Brown, It was invented in 1981. Let's first see how to operate it. Divide your money into four parts, Each serving is 25%. One is used to buy long-term treasury bond, A stock index to buy, A portion to buy gold, Maintain cash. And over time, Some assets will rise, Some assets may fall. Anyway, after a while, Definitely not four 25%. When the proportion of an asset exceeds 35%, Or when it is below 15%. It needs to be rebalanced. Sell the ones that have risen significantly, Make up for the significant drop. The ratio of four assets, Return to 25% each. For example, For example, I bought 25 yuan each at the beginning of the year. At the end of the year, Gold has become 40 yuan (+63%), The index has increased to 28 blocks (+13%), Treasury bond has become 23 yuan (-6%), The cash remains unchanged at 25 yuan. At this point, the total assets have increased to 116, Returning to the average value, each piece should be 29 yuan. Sell the gold for 11 yuan, Take the other three and make them up to 29. This operation is called rebalancing. Rebalance can be triggered based on a threshold. For example, any asset ratio exceeding 35%, Or less than 15%, Perform a rebalancing. It can also be triggered based on time. For example, conducting a rebalancing once a year. It's that simple. This strategy has good backtesting data. From 1972 to 2023, The average annualized rate is over 8%. And most of the years are profitable. Only 7 years were at a loss. The extent of the loss is not significant. For example, the 2008 financial crisis resulted in a 2% floating loss. The basic principle is not to predict. Most people invest, They are all trying to predict the market trend. But the permanent investment portfolio does not consider forecasting. Because the economy is cyclical. There will be periods of prosperity and decline, Inflation and deflation periods. So four types of assets were selected, To cope with different economic cycles. The stock index is the best during the prosperous period, The recession period is suitable for holding cash, During the inflation period, gold will take off, Deflation treasury bond bonds will expand. So, by investing in these four types of assets comprehensively, In any economic cycle, Everything will go relatively smoothly. Although the returns are not very high, But outperforming the majority, Even outperforming the index is enough. The most important operation is actually rebalancing. Simply put, rebalancing, It is an automatic profit taking system+ The mechanism of automatic replenishment. Forcefully helping you put it in a bag for safety, Forcefully helping you buy cheap assets. To use a phrase that everyone has heard before, When others are greedy, it forcefully helps you fear (stop the excess), When others are afraid, it forcefully helps you become greedy (to replenish your position). There are many similar strategies. For example, in a simpler way, It's just a balance between stocks and bonds. Only buy stocks and bonds. Then in these two assets, Regularly conduct rebalancing. If we move towards more complex development, It's the all-weather combination of Dario the Great God. The basic logic behind it is similar. Diversify allocation to smooth out risks and returns. Reduce the volatility of the combination. By configuring different combinations, And the operation of rebalancing, Try to increase the level of income as much as possible. I think a permanent investment portfolio is sufficient. Balancing stocks and bonds is a bit simpler. It will be very complicated all day long. The four permanent assets are just right. Choose a broad-based index for stocks, Choose ETF for gold, deposit gold, or futures. For treasury bond, long-term bond ETF can be used. Cash can be used as a commodity base, short-term bond base, or handheld cash. This strategy can be further expanded. Suitable for friends with some investment knowledge. Regarding the operation of rebalancing, It is possible to limit the threshold, On the basis of limited time, Add another trend factor. For example, the original strategy was, If a single asset exceeds 35%, it must be sold. If we consider trends, You can wait for the trend to reverse before selling. For example, this year's gold, It has risen all the way to over 60%. There is almost no callback in the middle. The biggest pullback was -10% in October. In this case, if it exceeds 35%, sell it, It's a bit regrettable. When the proportion exceeds 35%, Can continue to hold. Regardless of whether it reaches 45% or 55% in the future, Or higher. As long as the trend doesn't change, take it. After the trend changes, It can be sold at any time. Sell when it returns to 35% at the worst. The same applies to declining assets. After breaking through 15%, if the downward trend does not stop. Just patiently wait. The worst thing is to return to the 15% position, Just make up for it. Regarding time triggered rebalancing, Actually, it can be triggered in parallel with the threshold. Just lower priority. If the threshold triggering condition is met, Prioritize threshold rebalancing. If the threshold triggering condition is not met, For example, over the course of a year, Even if the proportion does not exceed 30%. It also needs to be balanced again. The time here triggers rebalancing, Actually, it borrowed the idea of grid trading. That is to say, the operation to deal with the volatile market. Of course, this investment strategy itself is quite simple. Don't expect high returns in the long run. And there is a possibility of missing many opportunities. This can be considered an inevitable disadvantage. However, for ordinary people, I think it's really enough.