Pareto Permanent Portfolio — 2025
Easy, Smart, and Ready to Copy: Just 3 ETFs!
Dear Investors,
ETFs are the cornerstone of our investments, offering targeted exposure to different asset classes while maintaining simplicity and efficiency.
After years in the financial markets, I’ve come to realize that success lies in simplicity!
“That's been one of my mantras – focus and simplicity.
Simple can be harder than complex…”— Steve Jobs
Today, I am proud to present my all-ETF portfolio.
Designed for simplicity, this portfolio features only three ETFs to achieve superior long-term performance, making it an ideal choice for investors seeking both ease and excellence in their investment strategy.
My Pareto Permanent Portfolio is inspired by Harry Browne’s Permanent Portfolio, a timeless strategy that emphasizes resilience and balance across economic cycles.
There’s no need to reinvent the wheel.
Harry Browne, was an influential financial advisor and author, he introduced the Permanent Portfolio, in 1982, as a resilient strategy designed to thrive under any economic condition.
His belief was simple yet profound: the future is unpredictable, so a portfolio must be prepared to perform regardless of market trends.
This timeless approach offers a reliable path to sustainable wealth creation.
Over the 42-year period ending in December 2024, the Harry Browne Permanent Portfolio posted positive returns in 36 years (85%) and realized a compound annual growth rate of 6.88%. Its maximum drawdown was -15.92%.
To achieve this, Browne allocated equal portions of an investor’s funds to four distinct asset classes:
Stocks (25%): Representing growth-oriented assets, stocks capitalize on economic prosperity and provide significant returns during periods of market expansion.
Bonds (25%): Long-term government bonds add stability and perform well during deflation or declining interest rates.
Gold (25%): A hedge against inflation and currency debasement, gold protects wealth during economic turmoil.
Cash (25%): Treasury bills or cash equivalents provide liquidity and act as a buffer during market volatility or economic contraction.
The Permanent Portfolio’s genius lies in its diversification across uncorrelated assets.
Each component is designed to thrive in specific economic scenarios—stocks during growth, gold during inflation, bonds during deflation, and cash during uncertainty.
This balance reduces risk while ensuring consistent performance over the long term.
By incorporating the principles of the Permanent Portfolio, the Pareto Permanent Portfolio seeks to achieve stability and growth through a simplified, yet powerful, investment structure for maximum efficiency and growth potential.
The Pareto Permanent Portfolio
By concentrating my investments on only three ETFs, I can leverage the power of the Pareto Principle to maximize our returns.
Each ETF plays a specific role in my portfolio, offering exposure to different asset classes and market segments.
This focused approach allows me to streamline my investment strategy and capitalize on all markets.
Over 25 years, the Pareto Permanent Portfolio has shown exceptional growth.
From its inception in 1997, my Pareto Permanent Portfolio has yielded an average of 34% per year.
By blending three ETFs into the Pareto Permanent Portfolio, I’ve created a balanced, high-performing strategy that has surpassed the market in 19 of 28 years (69% of the time), with only six years of negative returns.
I encourage you to explore these three ETFs and consider how they might fit into your investment strategy for a prosperous 2025 and beyond.