PORTFOLIO COMPARISON / ONE VARIABLE

Gold Allocation Backtest: 0% vs 10% vs 20%

Change only the gold allocation and measure the effect on portfolio return, drawdown, volatility, and result consistency.

THE QUESTION

How much gold changes the portfolio meaningfully without allowing one favorable period to dominate the conclusion?

BASE PORTFOLIO60% equities / 40% bonds / 0% gold
CONTROLLED CHANGE10% and 20% gold funded from equities
ONLY CHANGED VARIABLEGold allocation

The base rules, data treatment, and calculation assumptions remain visible throughout the comparison. Review the portfolio return and drawdown metrics used to interpret this result.

WHAT TO COMPARE

Read the trade-off as a system.

  1. 01Return sacrificed
  2. 02Drawdown improved
  3. 03Volatility change
  4. 04Regime dependence

WHEN TO LOOK

Locate where the difference appeared.

1970s inflation2000–022008–09Post-2020 inflation

A useful comparison shows whether an advantage was broad or created by one unusually favorable period. For a direct test of this risk, compare the same rules across multiple portfolio start dates.

OBSERVED RESULT / REAL MARKET DATA

What the comparison actually produced.

In this particular window, higher gold weights improved both return and drawdown: 20% gold added $1,397 and reduced maximum drawdown by 2.65 points. The result should be stress-tested because the period includes an unusually strong recent gold cycle.

WINDOWAug 2016–Jul 2026
CAPITAL$10,000 initial investment
CALCULATIONBase is 60% VTI / 40% BND. Gold is added at 10% or 20% and funded proportionally from both sleeves; GLD proxy; annual rebalancing.
Gold weightEnding valueAnnualized returnMaximum drawdown
0% gold$24,6429.44%−21.76%
10% gold$25,3749.76%−20.30%
20% gold$26,03910.05%−19.11%

TEST ANOTHER ALLOCATION OR RULE

Change one variable in AI Backtest.

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