This multi-asset fund has, over the last decade, handily outperformed the broad US stock market, despite carrying less risk. This is probably what most investors realistically want. In passing, we also note that the fund's shorter term performance has been negative, with year-to-date returns of -7.6%. Is the model broken ? Does it no longer make sense to diversify across multiple asset classes ? Or is it simply that over the shorter term, markets are inherently volatile, and those in instruments like gold doubly so ? We think the latter.

Last week we also had the opportunity to attend Didasko's Practical History of Financial Markets course in London, taught by Andrew Smithers, Stephen Wright, Gordon Pepper, Michael Oliver, Peter Warburton, Herman Brodie and Russell Napier. We can only echo the testimonial of Sebastian Lyon of Troy Asset Management, who described the course as:

"The best and most valuable two days I have spent outside the office in twenty years (holidays excepted). In a field which remains mired in short-termism and brevity of memory, all aspiring and experienced fund managers should attend this course. They will gain the invaluable advantage of historical perspective."

David Fuller's view Veteran subscribers may recall that Tim Price has often mentioned diversified, multi-asset funds. These have generated considerable interest, not least because of their respectable performance which has often outperformed Wall Street or any number of stock markets over the last 10 to 15 years, and without the volatility of equities.

The secret of a good stew is in the quality and weighting of its ingredients. Chefs will have their favourites, as will investment managers when determining the menu for their multi-asset funds. However, ensuring a long-term supply of successfully balance ingredients for a fund is more difficult for the investment manager than the chef's task of recreating a satisfying stew every year.

Here is the current weighting for the Permanent Portfolio (PRPFX US), supplied by Tim Price:

For those seeking more than just conceptual comfort from the diversified approach, a US mutual fund, the Permanent Portfolio, ticker PRPFX, is managed along very similar lines to those advocated by Harry Browne. This is a $12 billion fund invested in bullion (25%), US Treasury securities and similar assets (35%), Swiss franc assets (10%), real estate and natural resource stocks (15%) and growth stocks (15%). Its 10 year historic returns are shown below:

My guess is that unless that 35% weighting in US Treasury securities and similar assets is lowered and / or shifted to short-dated maturities, it will be a headwind for the next couple of generations. Meanwhile, the PRPFX chart remains rangebound and requires a sustained break above 50 to reaffirm the prior uptrend. Conversely, this pattern will look like a top area on a decisive break beneath 45.