Michael Cuggino, President, Portfolio Manager, Permanent Portfolio Family of Funds talks with Julie Cooling, Founder and CEO of RIA Channel about the importance of investment diversification. Cuggino manages the Permanent Portfolio®, a multi-billion dollar mutual fund used by investors as a core, all-weather portfolio component.
According to the Permanent Portfolio® target allocation, that fund maintains a 20% allocation to gold. Gold just hit its six week high, and with uncertainty regarding rates, the dollar weakening, and crude oil prices rising – diversification is more important than ever. Volatility is inevitable as we’re coasting into an eighth year with, currently, a bull market. Positioning portfolios with non-correlating asset classes helps to reduce overall risk. Cuggino’s fund follows this philosophy with basically four equally-weighted asset classes that tend to move in different directions: metals (gold/silver), stocks, bonds and cash.
The recent gold rush may boost short-term returns for this fund, but more importantly, its multi-asset class DNA will benefit investors over various market cycles.