Reddit reviews Deep Risk: How History Informs Portfolio Design (Investing for Adults Book 3)

The most complete overview I've read of the shortcomings of the Permanent Portfolio are outlined in Bernstein's Deep Risk. I'd recommend you read that. The whole "Investing for Adults" series is really instructive. Specially for people tinkering with non-conventional portfolios.

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the book distinguishes between deep (loosing your money even in long periods of time) and shallow risks (loosing your money in shorter time frames). the book shows that the PP is not a great Portfolio at preventing Deep risk.

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Some of the shortcomings of the PP are:

• It tries to mitigate risks of inflation, deflation, confiscation and devastation by deploying equal resources to each. the issue is that all the scenarios don't have the same likelihood, and don't have the same costs in terms of insurance.
  
• historically international diversification did better against inflation than gold (from a deep risk perspective).
  
• historically international diversification did better against deflation than gold
  
• you can only reasonably protect against confiscation through holding gold bullion or owning real estate. but that is super costly. confiscation is also super unlikely in most of the developed world.
  
• devastation requires the same approach as confiscation. which is costly and unlikely
  
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  Do note that the original idea of the PP as presented by Harry Browne was to use gold bullion coins. Not ETFs.
  
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  Also do note that I just took a quick glance at my Kindle for these shortcomings. The best way to get informed by this is to actually read the book and draw your own conclusions.
  
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  Like /u/Dissentient I don't believe in the magical Portfolio which survives every possible risk, so my views on this are biased.

If you want to be safe I would consider an inflation protected immediate annuity and/or TIPS (actual TIPS, not a mutual fund).

Some reading if interested:

http://www.amazon.com/The-Ages-Investor-Life-cycle-ebook/dp/B008CM2T2A/ref=sr_1_1?ie=UTF8&qid=1340164538&sr=8-1&keywords=%22the+ages+of+the+investor%22

http://www.amazon.com/Deep-Risk-Portfolio-Investing-ebook/dp/B00EV25GAM/ref=sr_1_3?ie=UTF8&qid=1377803466&sr=8-3&keywords=deep+risk+bernstein

Personally I prefer stocks/bonds but wanted to give another perspective. A mixture of immediate annuity (up to the state insured limit), tips, and stocks would be pretty ideal.