The drop in equity markets in Q4 of 2018 has hurt a lot of peoples portfolios. Strangely enough, the permanent portfolio loves these periods of high volatility. In itself it will not decrease in value dramatically because that’s what it is designed to do: when markets are nervous, money flows from equity to gold and/or bonds. When things return to normal money flows back but for some reason you end up with a higher value for your permanent portfolio. Even without rebalancing. I have seen this phenomena many times and my best explanation is that in the first round gold and bonds are bid up by the so called weak hands fleeing out of stocks, and in the second round additional money flows from smart money, that was parked on the sidelines, into stocks again.
Whatever the cause, I’ve now seen this happening so many times that I rejoice when markets drop. It doesn’t make me a popular guy at parties but I’ll accept that!