Simplified Permanent Portfolio: Rebalancing Strategy

Data Source: from January 1871 to February 2024
Consolidated Returns as of 29 February 2024

Managing the Simplified Permanent Portfolio with a yearly rebalancing, you would have obtained a 6.85% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 6.81%.

How do returns and drawdowns change, implementing different rebalancing strategies?

Rebalancing Strategies

In order to keep risk under control, you should rebalance assets quotes from time to time, so to keep them at the original percentage of the asset allocation.

Rebalancing can be performed in several ways.

At fixed time intervals:
  • Yearly: Jan 1st
  • Half Yearly: Jan 1st, Jul 1st
  • Quarterly: Jan 1st, Apr 1st, Jul 1st, Oct 1st
When a component (at least one) diverges from its original weight beyond a certain threshold (e.g. 5% or 10%).

Portfolio Returns as of Feb 29, 2024

Implementing different rebalancing strategies, the Simplified Permanent Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1871.

Portfolio returns are calculated in USD, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
SIMPLIFIED PERMANENT PORTFOLIO RETURNS
Period: January 1871 - February 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Feb 29, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~153Y)
Yearly Rebalancing 10.59 (1) 5.74 (5) 4.68 (10) 6.85 (30) 5.81 (154)
Half Yearly Rebalancing 10.43 (2) 5.76 (10) 4.75 (20) 6.73 (60) 5.77 (307)
Quarterly Rebalancing 10.39 (4) 5.90 (20) 4.83 (40) 6.81 (120) 5.78 (613)
5% Tolerance per asset 10.70 (1) 5.70 (2) 4.74 (4) 6.76 (17) 5.78 (84)
10% Tolerance per asset 11.89 (0) 6.12 (1) 5.17 (2) 7.29 (8) 6.00 (32)

In order to have complete information about the portfolio, please refer to the Simplified Permanent Portfolio: ETF allocation and returns page.

Performances as of Feb 29, 2024

Historical returns and stats of Simplified Permanent Portfolio, after implementing different rebalancing strategies.

SIMPLIFIED PERMANENT PORTFOLIO PERFORMANCES
Period: January 1871 - February 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
Yearly Rebalancing 5.81 (154) 6.24 0.93 -30.22 0.19
Half Yearly Rebalancing 5.77 (307) 6.27 0.92 -29.85 0.19
Quarterly Rebalancing 5.78 (613) 6.27 0.92 -30.27 0.19
5% Tolerance per asset 5.78 (84) 6.26 0.92 -30.59 0.19
10% Tolerance per asset 6.00 (32) 6.38 0.94 -28.91 0.21
(*) Since Jan 1871 (~153 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Feb 29, 2024

Historical Drawdowns of Simplified Permanent Portfolio, after implementing different rebalancing strategies.

SIMPLIFIED PERMANENT PORTFOLIO DRAWDOWNS
Period: January 1871 - February 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
Yearly Half Yearly Quarterly 5% 10%
-30.22
Sep 1929 - Jun 1933
-29.85
Sep 1929 - May 1933
-30.27
Sep 1929 - Apr 1933
-30.59
Sep 1929 - May 1933
-28.91
Sep 1929 - May 1933
-16.43
Jan 2022 - In progress
-16.33
Jan 2022 - In progress
-16.35
Jan 2022 - In progress
-16.61
Jan 2022 - In progress
-17.03
Jan 2022 - In progress
-14.34
Dec 1980 - Aug 1982
-14.10
Mar 1937 - Oct 1939
-14.36
Mar 1937 - Jul 1939
-14.33
Mar 1937 - Mar 1940
-14.27
Mar 2008 - Aug 2009
-13.70
Mar 1937 - Oct 1939
-13.72
Dec 1980 - Aug 1982
-13.96
Jul 1980 - Aug 1982
-13.92
Mar 2008 - Sep 2009
-13.95
Mar 1937 - Mar 1941
-13.28
Mar 2008 - Aug 2009
-13.51
Mar 2008 - Sep 2009
-13.92
Mar 2008 - Sep 2009
-13.72
May 1969 - Jan 1971
-13.57
Jul 1980 - Aug 1982
5 Worst Drawdowns - Average
-17.60 -17.50 -17.77 -17.83 -17.54
10 Worst Drawdowns - Average
-14.73 -14.83 -14.86 -14.72 -14.83

For a deeper insight, please refer to the Simplified Permanent Portfolio: ETF allocation and returns page.