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 This is Mike's portfolio right here. This dot. 75% silver, 25% gold, 42% per year. Hello, Golds family. Alan Hibbert here with another video. And today, I am very excited to present to you an Excel demo of something that Mike and I alluded to in a video a couple weeks ago. Gold destroys the 6040 portfolio. How much do you need? In that video, Mike and I presented research from Goldman Sachs that basically concluded that if you add gold to basically any portfolio, your portfolio will do better. So, it will

either increase the returns over time or it will have the same returns with a lower volatility. So, it's fantastic to hear Goldman Sachs say that. And in the video, I offered to present an Excel tutorial of how I reached the same conclusion years ago. And you guys overwhelmingly said that you want to see that tutorial. So you had dozens and dozens and dozens of comments below that video saying yes, please do an Excel video with the various scenarios. Uh so yeah, you all really wanted to see it.

So this is that video. I'm very happy to present it to you all. And so here's what we're going to cover. Let me give you an agenda of what we're going to cover in the video today. Jose asks, "Yes, an Excel video. the option to be able to download it will be much appreciated. Thanks for your work. Well, you are welcome, Jose. Uh Harry Brown's permanent portfolio, which in my opinion is the best portfolio model for any long-term investor, allocates 25% to gold. I think that's the ideal amount.

Okay, we're going to see if 25% is the ideal amount or perhaps something else. Um, and the portfolio, permanent portfolio looks like this. I'll talk about it in a second. It would be nice to know at what percentage of your portfolio is gold counterproductive 50%, 60 70 80%, at what point does more gold actually hurt you? We will talk about that. Are dividends factored into your stocks returns calculations? Very important question. Please do the Excel spreadsheet. Okay, I'm doing it.

I'm doing it. Okay. Also interested in Mike's insider program. How do I join? Thank you. We will talk about that. Yes. Do an Excel of Mike's holdings. 300 ounces of silver to one ounce of gold. So a 300 to1 ratio or approximately 75% silver to 25% gold. No stocks, no bonds. Please, we will do that. Okay. So these are the things we're going to look at and a little bit extra as as we go. So we're going to go back and forth from the agenda to the dashboard itself. Let me show you the dashboard. It looks like

this. It's beautiful. I love a good Excel dashboard. I will explain what all this is. We're going to go through it nice and slowly and I think you guys are going to absolutely love it. Uh I do have some disclaimers. One is please don't overly rely on anything that you see or anything that I say. Okay? This is designed to teach concepts to help you think through your own portfolio. It's not designed to give you a specific number or specific advice of any kind. Okay? So, please don't take this as

financial advice. It's just financial education, and that's what I'm passionate about. That's what this is intended to be. So, please don't overly rely on anything. Um, and of course, all of this is historical data, okay? It's not a future projection of anything, okay? It's all historical data. And another disclaimer, past performance is not a guarantee of a future outcome. Okay? So, keep that stuff in mind. All right? So I will explain all this in a second but first let's go back to our

agenda. The very first comment the option to be able to download it will be much appreciated. Thanks for your work. You are welcome Jose. And unfortunately I don't think I will be able to provide this for download. I would love to share it with you guys and I would love to hear you know what you uh what you get out of it and what you what you learn. But unfortunately, there are so many compliance issues when we offer something like this that we're probably not going to be able to offer it. If

that ever changes in the future, keep an eye on the description of the video or a pinned comment below the video and there might be a download link somewhere there in the future, but for now probably can't offer it, unfortunately. All right, let's get into the content itself. the permanent portfolio, which in my opinion, according to this commenter, is the best portfolio model for any long-term investor, and that allocates 25% to gold. I think that's the ideal amount. Okay, so if you don't know,

Harry Brown came up with a permanent portfolio. Sometimes it's called a Brown portfolio, sometimes a permanent portfolio, and it looks like this. 25% each of stocks, bonds, and cash. Okay, 25% each. And the idea is that portfolio can withstand bull markets, bare markets, recessions, expansions, you name it. Um, it's got something there that's going to compensate for everything else. And so, if you're agnostic, you don't know, are we in a recession or not? Or, you know, is the stock market in in a bull market

or is it a bare market or how about gold? If you don't want to figure any of that out and you just want a portfolio that's kind of robust through anything, this one makes a lot of sense. Okay, so let's actually look at the numbers behind it. Here is our dashboard. So we'll start over here on the left at this chart. Over here we have data going back to 1915 and this is monthly data. And on the chart we have stocks, bonds, gold and silver. So everything is indexed to one at the beginning and you can see that by the

end of it you know you can look and see which asset is the highest that's the best performer and the lowest is the worst performer and all of that is summarized by this uh column chart here. This is the holding period multiple. So throughout that time stocks did 839x. Okay we're talking about 110 years. So 839x, bonds 174x, gold 161x, silver 72x, and this is interactive. So if we want to look at a different time period, for example, 1971 to present, I can just click on it and it will reindex to one

at that point and give us a new updated holding period multiple. Okay, so since 1971, gold has been the strongest performer. Okay. So, very nice to be able to choose different time periods. Maybe we want to go from World War II until present. We can see what happened there and so on, right? There's other implications that we'll get to. At the same time, we can see the return perom. So, the yearly return, for example, stocks 7.9% on average and so on for the other assets. And this all updates in

real time. And if we want to, we can pick specific points like uh let's say you were born uh January 1st or let's do uh yeah January 1st, 1980 just for kicks. You know, everything will reindex from there and give you some updated numbers. Okay, so that's our starting point. Now, where it gets really exciting is looking at the portfolio options available to us. So this chart over here on the right looks like the one we showed in the previous video. This is this is what portfolio theory is

all about. Graphs that looks like this. And you can see that we are plotting the mean portfolio appreciation or like the annual return annual return on the vertical axis and the risk measured as volatility on the horizontal axis. And what these dots are right forming this curve is a different combination in this case of stocks and bonds only stocks and bonds for right now. So this point up here at the top is if you if your entire portfolio was 100% stocks, what would happen? Well, in this case, what do we have? Since 1980, I'm

just picking a random time. Since 1980, you would do about 10% per year since 1980. And your volatility would be about 12 a.5%. Okay? So that's if you had 100% stocks. This next point down here is 90% stocks, 10% bonds. Okay, so you start adding bonds into the mix and as you go further down the curve, it increases by another 10%. So this is 8020, 7030. This is the 60/40 portfolio. This dot right here. So if you had 60% stocks, 40% bonds, this is what you would have done from 1980 until today, that's a

return of about 9% per year on average and a volatility of about 8%. And if we keep going,v it's, you know, fewer and fewer stocks, more and more bonds until this final point down here is 100% bonds and 0% stocks. Okay? And one of the ways that we interpret a curve like this is obviously we want to have the highest return we possibly can and in general we want to have lower volatility. There's no reason to have extra volatility. So the ideal place we want to be on the chart right is a high

return with low volatility. So up here is the ideal spot to be. So up and to the left that's the best best portfolio is up here. That's basically risk-free return, you might say. But in practice, we can't get there. So, the closer we are to the top left, the better. Ordinarily, we have a tradeoff where we can move up and to the right or down and to the left. Like all of these portfolios here are different mixes that could all make sense for different types of investors. So, maybe you do want 100%

stocks and 0% bonds. That could make sense for some people. if you really just want to maximize your return, you want to be as high up on the chart as possible and you're willing to be far to the right having a lot of volatility. So, if you're okay with that, that's fine. That might make sense for young investors, for example. However, if you're in retirement age, you might prefer to have low volatility even if it comes at the cost of lower returns. So, you might try to be to the

left, as far to the left as possible, or portfolio here. Maybe one of these two. Okay. So, that's like uh 190 80 or 70% bonds. Yeah. 80 or 70% bonds and only 20 or 30% stocks. Okay. You might prefer that. So, if you're going to draw down your portfolio every month and you know you're going to sell, you don't want to have big swings, that might make sense for you. So, any of these portfolios would be considered rational. They'll make sense for different types of investors. However, what wouldn't make

any sense is some of the points down here. like these three points down here don't really make sense because there's options available to you that are directly above. Okay, so if you pick one of these dots down here, it's kind of silly because you could pick a portfolio directly above it which has a higher return with no additional volatility. It's the exact same volatility, but you just get a higher return. So, you might as well take that free return and it wouldn't make sense to pick one of the dots

below. Okay, hopefully that makes sense. So, anytime we can move up from one portfolio to another, we should do that. And anytime we can move directly left, we should do that too because moving directly left means that we're reducing our volatility for free. It doesn't come at the cost of a reduced return. Okay. What's not so obvious is is something like this. Any of these could make sense. All right. So, hopefully that curve makes sense to you guys. Now, let's explore that question of is 25%

allocation to gold is that um logical long-term or not? Well, let's reset everything here. We're going to look starting from January 1st, 1915, and we're going to take our stock and bond portfolio and we're going to add gold. So, let's add an increment of 3% gold. We'll start small and we're actually going to create a series of curves that are overlaid on top of each other. Unfortunately, it's a little tough to read. Let me explain what we're looking at. And in some of our other scenarios,

it will become much clearer, much easier to read. So, um, taking that away, you see that we have a bunch of dots here. Okay. Now, adding that back in, what's going on? Well, there's a curve of all white dots. All these white dots are no gold. So, it's what we were looking at just a second ago, trade-offs between stocks and bonds. the different colors as we get like a light yellow, a solid yellow, a light brown, a dark brown. Okay, the more brown it gets, the more gold we're adding to the portfolio. In this case,

the increment between those curves, between those colors is 3%. Okay? So, we go from 0% gold to 3% 6 9 12% gold. Okay? And the remaining percentage is split between stocks and bonds. So you can see that the more gold we add, the darker the color gets, the more we're moving to the left, which means by adding gold up to 12% in this case, we're basically just reducing volatility, going completely sideways without sacrificing returns. And that's from 1915. 1915. That's kind of surprising because

for a lot of those years, I mean almost half the time, uh, gold was pegged to the dollar or actually vice versa, the dollar was pegged to gold. So it almost wouldn't make sense to even think of gold as an asset class during that period. Okay. So what if we cut that out? What if we start our analysis over started over in 1971, August of 1971? Now the curves look like this. So you can see them a little more clearly that we have the the white circles, no gold, and these are sort of down to the right compared to adding

gold. When you add gold, you go up to the left. That's where we want to be. So just by adding gold, you get a freebie. you get higher returns and lower volatility. So that's better and that's at like every possible combination of stocks and bonds. So that's basically what we showed in the last video. That was the research from Goldman Sachs where they concluded that for pretty much any time period for pretty much any portfolio of stocks and bonds, you can add gold and your portfolio is better.

So that's what they concluded. That's what we showed and that's what this shows as well. However, we still haven't answered the question of is 25% the best long-term number. And there's a related question. Is there ever a point at which gold becomes counterproductive? Like you've added too much and now it's hurting you. Okay. So, let's let's play around. Let's see. Um, instead of an increment between 3% between curves, let's go to 5%. Okay. And you can see it shifted a little.

Now, let's go to 10%. Okay. So, here's what's happening. So now our increment is 10% between curves, which means we're going from zero gold to 10%, 20%, 30%, 40%. Okay? 10 20 30 40. So for the first one, 10% gold, that whole curve is up and to the left of the curve without any gold. So 10% is like a no-brainer. You're definitely better. No question. 20% looks to be almost directly above. So you can just get higher returns. That almost seems like a no-brainer as well. 20%. And this is since 1971.

30% it's not exactly a no-brainer. If you're going that high to 30 or 40, you're definitely increasing your return, but you're also increasing volatility. So that might not be for everyone. Might be for some people, not everyone. So this is pretty interesting here. Let's go in multiples of 25%. Okay, so now we're going from no gold to 25% and that's almost directly above. So that's like higher returns pretty much with no additional volatility. So 25% makes sense. And now this is 50% 75% and

this is 100% gold. And when you have 100% gold, there's no there's no curve here. It's just a single point because you're not going to have any stocks or bonds. So, if you're not going to have any gold and you're going to start with stocks and bonds, this shows that it just makes sense. You might as well add 25% gold. You're just going to go higher on the chart. You're just going to get higher returns and you don't have to add any extra volatility for for most of these

points here. It's only when you go beyond 25ish% that there's a decision you have to make. It depends on the type of investor you are. It depends on your emotional makeup. It depends on your uh your goals. you know, do you want that volatility or not? So, that's a pretty interesting outcome. 25% from 1971. Of course, we could pick different time periods and our answer would be different. So, if we go back to the questions here, uh really the answer to all of them is it depends, right? It depends on a lot

of things. So, is is 25% gold ideal? It really depends. And just for fun, we'll look at different time periods and it would be nice to know at what percentage your port of your portfolio is gold counterproductive. Um, we'll take that question in tandem. So, just for fun, let's go from the year 2000 to present. And you can see what adding different different amounts of gold will do. Uh, yeah, we're basically straight up on the first one. And this is a 25% chunk. So, if you add 25% again, better returns.

and then 50% gold, 75% 100% then you have a decision to make. It's like if you're not comfortable with all that volatility, you don't want to go that high. And that of course is in a bull market. And so if we want to be fair, we should also look at a bare market. So we know that in the 1980s to the year 2000, gold was in a bare market. Uh and silver as well. And so what happens? Is it just like totally dumb to have any gold during that era? Like you would think that if it was a losing asset, you

wouldn't want any of it. However, look at this. Look at this. There is an argument to be made. Let's let's reduce the percentage here. Yeah, look at these curves. Now, we're going in a 5% increment. So, these curves are zero gold and then 5 10 15 20% gold. Okay? 5 10 15 20%. That's what we're looking at. There's an argument to be made that if you were retired during this period, okay, and you had to take monthly draw downs and you were scared of volatility, you did not want your

portfolio having big swings, there's an argument to be made that it makes sense to have five or 10 or even 15% gold simply to reduce the volatility of your portfolio. So, by adding 15% gold, you can shrink your volatility more than if you had no gold at all. So even though it was kind of a losing asset and it was in a bare market, 15% is not ridiculous, right? Of course, you pay a little bit of a price in returns, but you're reducing that volatility. So if that's important to you, that could

make sense. So that's very interesting that even in a bare market, you might want to hold that asset. Okay. So again, is there a point at which gold becomes counterproductive? Let's go to let's go to a bull market. Let's go to the 1970s. Uh you can see here, this is so funny. This is the stock bond chart with no no gold. Okay, it's almost inverted because of how bad stocks were. Uh so yeah, stocks did worse than bonds in this in this era according to the data that I have. So

I guess I'll point out now is a good time to mention that the the bond data I have is 10-year Treasury yield data. This is all monthly data and it's 10-year Treasury yield data. And then I found a formula online that converts yield data into return data. So it might not be a perfect formula. I mean there is no perfect formula. So it's definitely not a perfect formula, but I I don't love the bond data that I have here. Let me just put it that way. That's it's okay. Anyways, when you add

gold, what happens? Well, we're just going straight up on this chart. Straight up. So if you go 5% 10% 15 20, you're basically just getting free return. We're not really moving to the right. We're not introducing extra volatility. However, that changes when we start talking about bigger increments. Okay, so this is 10 20 30 40. Let's take it all the way. 25 50 75 100% gold. Okay, so I would not say that this is counterproductive. Definitely not not for this scenario because it's a

bull market. But you do have a decision to make after you go to about 25% gold. You might not want to introduce volatility into your portfolio. However, you might like, you know, a 38% return. So, it's up to you. Very, very interesting in my opinion. Okay. So, let's look at an example of where gold actually is counterproductive. For example, if we start after World War II, we go 1945 to present. We see our normal stock and bond curve. Let's go in 5% increments of gold. And you can see

that the curves move generally left and generally higher. However, that's only for 5 10 15 20% gold. Let's extend it to 30 or 40% gold. 10 20 30 40. And look at what happens. We when we go from zero gold to 10%, we're moving to the left. Okay? And even when we go to 20%, we're moving to the left and up a little bit. So that's helpful. So adding 20% gold is helpful. But then when we get to 30% gold or 40% gold, we start moving to the right. And we're not really going much

higher. we're just basically going straight right and that's the wrong direction. So by adding 30 or 40% gold, we're just adding volatility without getting extra returns. And so that's based on one particular time period in 1945 to present. And so to answer your question, yes, there are times when adding more gold is counterproductive. However, you've got to be real particular in the time frame that you're choosing. And it also depends on where uh in your portfolio you're adding it.

Is it is it about 20% that it becomes counterproductive or 80% that it becomes counterproductive? And that depends on a whole host of factors. So long story short, yes, there are times and it depends heavily what those times are. All right, let's take a look at our questions again. Uh are dividends factored into your stock returns calculations? Uh in my analysis, no. But in the Goldman Sachs analysis, yes, for this particular analysis, right? So Goldman does include total return. So it includes dividends

with a 0% tax rate. And of course, their conclusion was you can take any portfolio of stocks and bonds, add gold to it, and it does better for any time period. And so conceptually, we get the same results conceptually. Part of the reason that I'm okay omitting dividends here is because we're not using this to pick an exact number. We're not using this to predict the future and we're not using this to, you know, um, overly commit to a certain idea, right? This is just to understand

the concepts, to play around, and to understand some things that are counterintuitive, like you might actually want to hold an asset that's in a bare market if it helps you with your portfolio goals, right? So, it's all about conceptual stuff. So, this does not include um dividends. The Goldman Sachs analysis does. And pretty soon, I'm going to do an analysis, not this one, but a different one that shows the difference between dividends when you include them or not, and the effect it

has on certain things. So, stay tuned for that. Please do the Excel spreadsheet. Here it is. Also interested in Mike's insider program. How do I join? Okay, so our insider program is basically for anyone who buys 500 ounces of silver or 10 ounces of gold lifetime. Lifetime doesn't have to be a single purchase. It's just lifetime. So you can do it in multiple purchases. And once you do that, you're automatically enrolled in the insider program and you get updates anytime Mike makes a change to his

portfolio. if he buys something, if he sells something, and his logic behind it. He makes a dedicated video explaining his thought process, the moves that he made, and anything else that's on his mind. So, that's super valuable. And we are in the process of overhauling the insiders program to make it even better. So, this is taking months, maybe possibly even years. Like, I I can't even remember how long we've been doing it, but we have meetings upon meetings trying to figure out how we can

make that program more valuable for you guys. So, if there's something you want in an insiders program, let us know in the comments section. If there's something that you think would be valuable to you guys, just put it down there and we will consider it. And eventually, several months from now, uh, we'll make an announcement with what that new program is going to look like. So, it will take time. It's one of our many exciting initiatives, but yeah, so that's how you join. You just make a

purchase or multiple purchases of 500 ounces of silver or 10 ounces of gold and you're automatically enrolled. And finally, yes, do an Excel of Mike's holdings. 300 ounces of silver to 1 ounce of gold and no stocks, no bonds, please. All right, you got it. We're going to take a look. Let us take a look here. Let's start everything. Uh, reset it. Reset it. So, what do we have? Okay, we're going to start introducing silver. I did not put silver into any of our portfolios yet. And part of the reason for that is that

it's a little tricky showing a fourdimensional analysis in two-dimensional space, two dimensional screens, a two dimensional plane. So we've got stocks and bonds, and then when we add gold, we we add curves. And then when we add silver, it's kind of hard to represent the change that we're making. So what I have our our spreadsheet doing here is when we add silver, it just moves the curve. You just see it move goes from zero to 10. Like if you just add 10% silver, it just moves all those data

points. Okay. So in this case, it's moving up and a little bit to the left. So that's good. That would show us that for this time period, you can increase your returns a little bit and reduce your volatility a little bit just by having 10% silver. Okay. So let's do Mike's portfolio. Mike has 75% silver. Okay. This is bananas. and 25% gold. Okay, I got to explain this. All right, so what do we have here? This white line. So, we're starting in 1915, which is kind of bananas, but let's just

let's just do it. This is no gold whatsoever, 75% silver, and the remaining 25% is a trade-off between stocks and bonds. As we've been discussing, this single dot right here would be Mike's portfolio. This would be 75% silver, 25% gold, and therefore zero stocks and bonds. This next one would be 75% silver, 50% gold. So, we're already at 125%. Which means that stocks and bonds combined would be negative 25%. You'd have to sell them short. And that's a no no of portfolio theory. We're not

allowed to do any short sells. So we have to ignore this curve and this curve and this curve there. We say they're like not possible. Okay, that's just one of the drawbacks of portfolio theory. Um and by the way, Marowitz who invented this in 1950 in the 1950s, he won a Nobel Prize. Okay, so even though the model has drawbacks, it's still very useful. And uh there's a saying in the modeling community, all models are wrong, but some models are useful. Okay, so his model is wrong, my model is

wrong, Goldman Sachs's model is wrong. All of our models are wrong, but hopefully some of them are useful. Okay, excellent. So this is Mike's portfolio since 1915. If he were to have done this the whole time, that would be about a 7% return on average and a 22% volatility. Not great. You wouldn't really want to do that. It should be fairly obvious to everyone, I think, that the era before 1971 was a completely different era of investing. And the world we live in now, uh, you know, it actually makes sense to hold

gold or silver in your portfolio. Um, back then it kind of didn't. So, let's just look 1971 to present and all of the sudden that single dot that represents the Mike Maloney special, that's all the way up to 11 point something% return. and you know 20 28% volatility. Okay, fine. But I don't think Mike would do this since 1971. He has said before many times he's not a gold guy. He's a cycles guy. He's a cycles guy. And I feel the exact same way. So as much as I love gold, I like

cycles better and understanding those cycles and then playing them. So I think Mike would only do this in a confirmed bull market. So let's look at 2000 to present. Okay. What's his portfolio look like? That single dot here. Well, it's up over 12 point something percent. About 26% volatility. So, that's per year. 12% per year. Um, not too shabby. However, this bull market that we're in isn't over. And we get the biggest move at the very end, right? So, what about in the 1970s?

This is Mike's portfolio right here. this dot. 75% silver, 25% gold, 42% per year. Yeah. 41 a.5% per year, 35% volatility, man. 41% per year. Yeah, that's pretty good for 10 years. So, who knows? Maybe by the end of the current bull market, something like this will happen. So, you know, if you're in a confirmed bull market, precious metals bull market, it makes a lot of sense to have precious metals. Um, I think that's really the only way to say it. So, yeah. So, thank you guys. I think that's all I have.

I'll end it right there. That's that's a pretty good one. 40%. Love it. So, thank you guys for watching. I hope you found this very helpful. Um, if you have any follow-up questions or comments or things you want to see in the insiders program, let us know in the comments section. Thanks a lot. Bye-bye. Invest and earn up to $2,000 in bonus silver at goldsilver.com. It's easy. Step one, open any golds storage account excluding IRA. Step two, purchase your precious metals. Step three, get up to $2,000 in bonus

silver dropped straight into your vault. Visit golds.com/frees to claim your silver.