Total US stocks
The broad engine for company growth and dividends.
Equal allocation across five asset classes for all-weather stability.
The broad engine for company growth and dividends.
A deliberate tilt toward smaller, cheaper US companies.
Interest-rate sensitivity and ballast during some slowdowns.
A steadier reserve with less rate sensitivity.
A separate source of risk that may respond differently to inflation and stress.
After market moves, the five sleeves may no longer be equal. With a €100,000 portfolio, each target is €20,000. The sells and buys below bring this example back to 20% per sleeve.
| Sleeve | Current | Target | Trade |
|---|---|---|---|
| Total US stocks | €28,000 | €20,000 | Sell €8,000 |
| Small-cap value | €22,000 | €20,000 | Sell €2,000 |
| Long-term bonds | €18,000 | €20,000 | Buy €2,000 |
| Short-term bonds | €17,000 | €20,000 | Buy €3,000 |
| Gold | €15,000 | €20,000 | Buy €5,000 |
| Total | €100,000 | €100,000 | €10,000 sold / bought |
Taxes and trading costs can change the best way to rebalance. New contributions can often fill underweight sleeves before anything is sold.
Risk Level
Low to Moderate
Rebalance Frequency
Annually
The Golden Butterfly divides equally across five uncorrelated asset classes, aiming for stability across all economic conditions. The small-cap value tilt provides a growth kicker, while gold and bonds protect against different types of economic stress.
The Golden Butterfly was developed by Tyler of PortfolioCharts.com as an improvement on Harry Browne's Permanent Portfolio. It adds small-cap value stocks for additional returns while maintaining the equal-weight simplicity.
Investors seeking stability with reasonable returns across all economic environments. Those who want a simple, equal-weight approach.
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