Build an investment portfolio that can survive in any situation

"True security does not rely on predicting the future, but on designing a structure that can survive regardless of what the future holds." This is the core idea from the book "Safe Haven: Investing for Financial Storms."

Both excessive risk-taking and excessive conservatism can lead to wealth loss. The key is how to build a portfolio that can protect the principal even in extreme events.

We are in a特殊的时期: the stock market continues to hit new highs, but long-term bond yields are高企; the dollar is强, while consumption is疲软; AI has triggered a capital frenzy, yet the world faces fragmentation and war risks. The geopolitical situation is becoming increasingly tense, and conflicts between countries are constantly escalating.

The Ultimate Truth of Wealth in Turbulent Times: Being Able to Lose More Than You Earn is More Important

The author presents a cruel yet real viewpoint in the book: what truly determines the fate of wealth is not the average rate of return, but whether one can avoid the "zeroing out" moment. Even if a portfolio earns 15% profit every year, just one 80% drop could make it impossible to recover forever.

The key is not to hold a specific safe-haven asset, but to build an overall structure that can survive the storm. The break of compounding often occurs during catastrophic events, rather than in normal growth processes.

The Five Rules of Risk Aversion Proposed by Safe Haven

1. Safe assets are not the same as low-volatility assets. True safe-haven assets can achieve explosive growth during systemic crashes.

2. Black swan events can undermine the magic of compound interest. A 50% drop requires a 100% increase to break even, while a black swan event may cause an instant drop to zero.

3. Do not try to predict the future, but prepare for the worst-case scenario. While it's impossible to foresee specific crises, you can allocate assets to cope with various possible outcomes.

4. The convex yield structure is a true hedging artifact. It may incur slight losses or break even during normal times, but it can achieve returns of several times or even dozens of times during extreme events.

5. Geographic diversification and custody diversification are crucial. The geographical location of assets and the method of custody may determine whether assets can still be controlled during a crisis.

Structure of a Safe-Haven Investment Portfolio

The recommended portfolio structure by the author is:

• 90-95%: Low-risk, stable compound interest assets (such as short-term U.S. Treasury bonds, cash, high-dividend stocks)
• 5-10%: High leverage "tail hedge" positions (such as long VIX, SPX put options, gold/bitcoin)

This structure yields modest returns during normal times, but can achieve explosive growth during black swan events.

"Black Swan Survival Portfolio" Prepared for the Future

Considering the current risk environment, a layered asset structure can be constructed:

Level 0: A healthy body

• Maintain good physical condition
• Cultivate diverse survival skills

Layer 1: Anti-Systemic Risk Assets (Self-Custody)

• Physical Gold (5-10%)
• Bitcoin (Cold Wallet Storage, 5-10%)
• Overseas land/passport (5-10%)

Layer 2: Tail Risk Hedge Position

• SPX Deep Put Options (1-2%)
• VIX Bullish (1-3%)
• Gold Call Options (1-2%)

Layer 3: Liquidity and Growth Assets

• Short-term US Treasury ETF/Treasury Money Market Fund (20-30%)
• Global high dividend stocks (20-30%)
• Emerging market real estate and USD-denominated REITs (5-10%)

Conclusion

Although we cannot prevent various catastrophic events from occurring, we can design an asset structure that will not go to zero under any circumstances in advance. This is the true way to protect wealth.