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The Perfect Portfolio for Any Environment (Even This One)

How should you invest when the markets are choppy, or there’s a war, or you’re hearing talk of a recession (or all three)?

How do you invest in a way that lets you go about your business unfazed by all the uncertainty?

I spent decades looking for the answer—searching for the perfect portfolio… a portfolio that grows a little bit every day, with almost no drawdowns and no volatility, while still providing a healthy return over risk-free US Treasuries.

That is the holy grail.

The goal is not to pick the portfolio that returns the most. Those are the fancy, gold, jewel-encrusted cups from Indiana Jones and the Last Crusade—the false grails. The true Holy Grail was a plain, sturdy cup.

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Your Portfolio Shouldn’t Scare You

Some people focus on returns to the exclusion of all else. They want a portfolio stuffed with aggressive growth mutual funds that return 12%. They don’t think for a moment about risk.

But you want to consider risk, in addition to return.

This gets into the behavioral aspects of investing. I like to say that with any trade you make, at some point, you will be tested. You will experience losses and question your motives for the trade. You will be frightened. You will despair.

The perfect portfolio is one that doesn’t frighten you at all. You can set it and forget it, checking in on it once a year or so.

If you only invest for returns without considering risk, there is a pretty good chance you will experience a drawdown severe enough that you will contemplate dumping some of your positions—perhaps at the worst possible time.

Volatility leads to stupid decisions. And your decisions will get worse the more volatile your portfolio is.

Remember, there is a fine line between investing and gambling, and I often see more gambling than I would like. Don’t get me wrong—there’s a place for rank speculation, but not with your retirement savings and not with your core portfolio. You can set aside 10% of your assets for “play” money, if you want. It may seem obvious, but you shouldn’t gamble with money you can’t afford to lose.

  • I’ve spent a lot of time thinking about the perfect long-term portfolio for everyone

It’s not 100% stocks. That’s too risky.

It’s not 80% stocks/20% bonds—still too high on stocks.

Even the old 60% stocks/40% bonds portfolio gives you too much risk.

So, you want to bring other asset classes into your portfolio. Because stocks and bonds only represent a small part of the investable universe.

You also want to build a portfolio with a high Sharpe ratio—this gives you a favorable relationship between risk and reward. A portfolio with a high Sharpe ratio will use risk more efficiently. Portfolios with high allocations to stocks use risk very inefficiently.

And most importantly, you want to build a portfolio with a very low max drawdown—this is the maximum loss that the portfolio might sustain over any given year. This is where people are tested—an 80/20 portfolio will incur breathtaking losses in periods of market stress.

This is why I created something called The Awesome Portfolio. It does all of these things for you, and more. It’s hard to overstate how revolutionary this is—it has the potential to change your life.

Longtime readers know the basics—the Awesome Portfolio includes 20% stocks, 20% bonds, 20% cash, 20% gold, and 20% real estate. But there’s a lot more to cover. So, I wrapped up all the details for you in a special report.

Inside you’ll find easy-to-follow steps you can take right now to minimize the volatility in your portfolio, minimize your risk, and boost your long-term profits... along with five investments to quick start your personal Awesome Portfolio today. Click here to access your copy.

Jared Dillian
Jared Dillian