A 500 Year Old Portfolio Perfect for the Modern Investor
What we can learn from the portfolio of one of Medieval Europe’s wealthiest entrepreneurs.
Jacob Fugger died in 1525 as one of the wealthiest men to have ever lived, having amassed a wealth equal to 2% of the entire GDP of Europe at the time, and left us with specific advice on how to construct and manage a portfolio which remains perfectly suited to the modern passive investor.
Whilst I am, myself, an active value investor, I’ve poured years of thought and study into modern portfolio theory and passive portfolio construction as well. Yet, I hadn’t found a passive portfolio that I deemed particularly well suited to the risks facing investors in our current macro economic environment — until I learned of Fugger’s portfolio.
What is the “Fugger Portfolio”?
Fugger describes a portfolio as follows:
“Divide your fortune into four equal parts: stocks, real estate, bonds and gold coins.”
“Be prepared to lose on one of them most of the time… Whenever performance differences cause a major imbalance, re-balance your fortunes back to the four equal parts.”
