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The Marc Faber Portfolio, Returns You Can Touch and Feel

Marc Faber Portfolio

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

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 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 actually 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 portfolio. The 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 things 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

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
S&P 500 (Benchmark)131.46%3.69%13.52%10.54%-37.63%5 - very high risk0.04%1.79%
The Marc Faber Portfolio620.71%2.06%7.41%8.04%-16.81%2 - low risk0.12%1.96%

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)

Check the best mutual funds and ETFs here.

Resources for the portfolio

The Gloom Boom & Doom Report website.

Marc Faber’s book Tomorrow’s Gold, Asia’s age of discovery. I don’t recommend it as it won’t help you to invest better. There are much better books that will do that.

Conclusion

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?

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