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This article displays the portfolio by Marc Faber. Here you will find a description, performance, and resources for the portfolio as well as detailed information on how to implement it yourself.
- The Marc Faber portfolio returns you can touch and feel
- Description of the Marc Faber portfolio
- Performance of the Marc Faber portfolio
- Building the portfolio(s)
- Asset Allocation for the Marc Faber portfolio
- How we select the right ETFs
- Resources for the portfolio
- Suggestions for your next steps
The Marc Faber portfolio returns you can touch and feel
Marc Faber is the legendary permabear and author of the Gloom Boom & Doom Report.
He is credited for advising his clients to exit their positions before the 1987 stock crash.
His specialty is emerging markets and frontier markets.
Marc Faber is also a gold bug, despite his protestations. He has, on many occasions, hailed gold as a sound investment and has multiple times said that gold is his largest holding.
“When people talk about people who are optimistic about gold, they call them ‘gold bugs.’ A bug is an insect. I don’t call equity bugs ‘cockroaches.’ Do you understand? There is already a negative connotation with the expression of ‘gold bug.'”
– Marc Faber
Now, I get it that he doesn’t want to be called a bug. No one does. But holding gold is not a smart investing strategy, so the negative connotation he complains about is fitting. Bad investment behavior should be called out.
Marc Faber is a permabear, which means he always remains skeptical of the market. He always fears the next downtown. The permabear mentality can hurt your investment returns because you can get so scared that you will refrain from taking any significant risk. But you need to take risks if you want returns. Risk and return are joined at the hip.
Marc Faber is known as Dr. Doom because of his always negative market sentiment.
His sentiment is excellently presented in his book Tomorrow’s Gold, Asia’s age of discovery. In that book, he tackles market cycles and focuses to a large degree on the downswings instead of concentrating on the upswings.
Description of the Marc Faber portfolio
Marc Faber’s trepidation of the market shows in his investment portfolio. The model portfolio comes from Meb Faber (no relation) and his book Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies.
Marc Faber’s portfolio is tilted heavily towards real assets. Real assets cover real estate, commodities, precious metals, timber, and farmland. It is a rather strange term but denotes that there are tangible physical things behind your investment. I would argue that an investment in Apple is very much an investment in real stuff as well.
50% of Marc Faber’s portfolio is in real assets, gold, and REITs. 25% is in bonds.
It is very much like the Permanent Portfolio by Harry Browne.
Marc Faber’s portfolio is conservative.
Performance of the Marc Faber portfolio
|Name||Asset class count||Year to date||Return in 2019||10 year return||CAGR since 1989 (%)||Risk level||Expense ratio|
|The Marc Faber Portfolio||6||-4.08%||20.71||7.41%||8.04||1||0.12%|
Building the portfolio(s)
Below you can see the asset allocations for the portfolio(s). You can also see if the portfolio(s) has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio(s) yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.
Asset Allocation for the Marc Faber portfolio
- 13.00% US Large Cap (VV)
- 25.00% REITs (VNQ)
- 8.00% International Developed Blend (VEA)
- 4.00% Emerging Markets (VWO)
- 25.00% Total US Bond Market (BND)
- 25.00% Gold (IAU)
How we select the right ETFs
There are a lot of ETFs out there. Most of them can be discarded because:
- They are too expensive
- They hold too few assets and are therefore too illiquid
- They do not meet the criteria for representing the asset class they are supposed to mirror.
We have carefully selected an ETF for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?
If you are a European investor you need to buy European ETFs. We list 47 best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).
As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.
You can find the socially responsible investing ESG ETFs in the same article.
Resources for the portfolio
Suggestions for your next steps
Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone
If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful. Rebalancing your portfolio lowers your risk and may even provide higher returns in the long run.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool
Marc Faber’s portfolio is conservative and will shield you from the worst downturns. It is heavily tilted towards real assets.
What is your opinion on gold? Should it be included in your portfolio?