The cockroach portfolio: Still dumb, still robust, still superior

the marketNZZ/Dylan Grice/11-28-2022

graphicimage of 'are you secure' sign“We think there’s a far better yardstick [than the 60/40 portfolio]. Those of you who know us know that we’re fans of what we call a ‘cockroach portfoli’ which equally weights bonds, equities, gold and cash. By averaging exposure to all broad investment risks (inflation, deflation, long-duration and zero duration), the cockroach portfolio doesn’t depend on any particular macro regime for its returns.”

USAGOLD note: It has also been hypothesized that the cockroach is the earth creature most likely to survive a nuclear armageddon. This is an entertaining and informative article likely to inspire more than a few to consider cockroaching their own portfolios. Dylan Grice is the editor of the investment letter, Popular Delusions. “Maybe it’s not just what you know that’s important in capital preservation,” he concludes, “it’s how well you calibrate what you don’t.”

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