Étape 3

Gold-Bond Switch Portfolio

When it helps: Garder stocks et cash, then choose the right defensive sleeve

The portfolio keeps a stocks, une cash sleeve, then a third sleeve that chooses between gold and bonds. L'idée est simple : l'or and bonds do not protect against the same danger. Gold protects better when inflation or the currency becomes worrying. bonds protect better in deflationary phases, when the world slows and rates fall.

When it helps: garder stocks et cash, then choose the right defensive sleeve

Cette étape apprend la première vraie règle de bascule. On ne garde pas or et bonds au hasard. On garde celui qui joue vraiment son rôle défensif dans le climat observé.

Reference point

A defensive sleeve chosen by the signal

Logic

The portfolio keeps a stocks, une cash sleeve, then a third sleeve that chooses between gold and bonds.

Visual allocation

Click a slice of the circle or a block to open the explanation.

Switching rule

When to stay in gold, and when to move into bonds government bonds

The idea is not to guess inflation before everyone else. It is simpler: look at whether gold is doing better than bonds, or whether bonds regain the advantage. The market already gives an indication lente et lisible.

Ratio gold / bonds 7-year moving average

Dans cet exemple long, on lit 5 régimes successifs depuis 1972 : or, bonds, or, bonds, puis or. Cela fait donc 4 bascules effectives. La longue baisse du ratio entre les années 1980 et 2000 n'est pas un mauvais signe : c'est la période du grand bull run stocks et bonds, when gold becomes less necessary because the market is regaining confidence. This rule is meant to be held calmly, not watched all day on screens.

The decision rule, in plain English

  • The gold line compares gold with bonds.
  • The blue line is the 7-year moving average of that ratio. It filters out noise.
  • If gold stays above that average, the defensive sleeve moves toward gold.
  • If gold moves durably below that average, the defensive sleeve moves toward bonds.
  • The goal is not to react every week. The goal is to follow a slow, clear and supportable.
Understanding the 7-year moving average Beginner explanation

Imagine a slow trend line. One market month can move sharply and tell a misleading story. The 7-year moving average takes the last 84 months, averages them, then draws a calmer line.

What is it for?

It reduces noise. Instead of focusing only on the latest violent move, it helps read the broader direction.

Why moving?

Each month, the oldest month leaves the calculation and the newest month enters. The line therefore moves slowly with the market.

Why 7 years?

Because this is not meant to produce a fast buy/sell signal. The goal is to avoid changing your mind after every few-week shake.

On the gold / bonds chart, the blue line is not a prediction: it is a filter. If the ratio only moves briefly around that line, it does not say much. If it stays above for a long time, gold dominates bonds: the market may be looking more at inflation risk and weakening money. If it stays below for a long time, bonds regain control: the signal becomes more deflationary, or points to a colder world.

5 regimes, 4 switches in this example

January 1972 - March 1982

Gold

The market prefers gold. Currency and inflation are the central subjects.

March 1982 - August 2005

government bonds

The world shifts toward a more deflationary environment. bonds regain their defensive role.

August 2005 - May 2013

Gold

Le signal repasse du côté de l'or. La protection monétaire redevient prioritaire.

May 2013 - May 2020

government bonds

Le signal redonne l'avantage aux bonds. Le climat est plus froid et plus favorable aux contrats.

Depuis May 2020 dans cet exemple

Gold

Le marché remet l'or devant les bonds. The defensive sleeve moves back toward monetary protection.

What to understand below the chart

La bascule n'est pas là pour avoir raison chaque mois. Elle sert à ne pas garder trop longtemps l'actif défensif qui ne correspond plus au climat.

When or baisse face aux bonds

When the environment turns deflationary, gold can stay weak for a long time. In those periods, bonds peuvent mieux jouer le rôle défensif.

When or reprend la main

When money, inflation or public debt become the main subject again, gold can become the better protection again.

Why move from 25% to 33%

Because the least useful defensive sleeve is removed, the three remaining sleeves carry more weight. The portfolio becomes more concentrated, but stays simple.

Why a 7-year moving average

The moving average is not there to predict. It filters noise. The market can panic quickly, but a real regime change often takes time to settle in. The 7-year filter forces the portfolio to stay calm.

What this filter tries to avoid

  • Avoid changing sleeves at every market move.
  • Avoid confusing a short alert with a real regime.
  • Avoid keeping the defensive asset too long when it no longer protects.
  • Accept that the rule is slow and imperfect, but usable by a normal investor..

The Gold-Bond Switch Portfolio in practice

The charts compare the Base Portfolio directly with the Gold-Bond Switch Portfolio. Individual assets are no longer shown: the goal is simply to see whether the switching rule improves the overall portfolio in the United States, Japan and Turkey examples.

Cas United States

Gold-Bond Switch Portfolio

Historical example built from the same series already used for the United States case. The defensive sleeve moves toward gold when the gold/bonds ratio stays above its 7-year average, and toward bonds when it moves durably below it. The switches shown here apply to this local case, not to the long timeline since 1972.

Period 2005 to 2026
Final purchasing power 326.7
Average annual pace 5.8%
Worst drawdown -21.4%
Current sleeve Gold

What this case shows

  • Compared with the Base Portfolio, the switch ends to 326.7 versus 271.6, or +20.3% in this case.
  • The current defensive sleeve is Gold. This is the local reading of the slow signal, not a macro prediction.
  • The point of the test is to see whether the switch adds something compared with the Base Portfolio, not to repeat the general rule.

Before comparing the three cases

  • The Switch curve shows the portfolio with stocks, cash, then gold or bonds depending on the slow signal.
  • The Base Portfolio curve is the reference, with its four blocks kept stable.
  • The reading is intentionally simple: two complete portfolios, not assets one by one.

Method used

  • The case starts at 100 on the first observed date.
  • The defensive sleeve compares the gold / bonds ratio with its 7-year moving average.
  • If the ratio stays above the average, the sleeve goes to gold, if it moves durably below it, the sleeve goes to bonds.
  • In this theoretical model, the three sleeves are simply brought back regularly toward one third each. This is not an investment instruction.

Back to the previous portfolio

Start here. If you understand the Base Portfolio, the next portfolios become much easier: they do not replace the base, they add simple rules for more difficult cases.

< Base Portfolio

Next step

Ensuite, le Portfolio Energy keeps the same base, but isolates another important sleeve:energy, souvent cachée dans les stocks larges.

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