CapitalTime

Articles on investing and capital management, with a quantitative focus.

#prp - Permanent Risk Parity (how I invest)

Rebalanced the PRP

2025-10-22

Normally, I rebalance the PRP once a year. However, the weight in gold became too high, so I’m partially rebalancing now.

Gold became significantly overweight due to an extreme difference in performance versus bonds. Since the last rebalancing, gold is up 53% and bonds are up just 4%. Meanwhile, stocks performed on par with the overall portfolio, which kept them at roughly the target weight. As of October 21, only gold was dramatically overweight.

I sold some gold, and bought bonds.

Due to the overweight, gold’s volatility was having an outsized impact on the total portfolio. Rebalancing restores the intended risk exposures.

The weights of my “model portfolio” match the weights of my actual investments.

— Jem Berkes