Always investing in both growth and protection
If we are to be good all-weather investors, we cannot be dependent on the direction of markets.
To avoid that dependency, we create a balance of offsetting investments in every portfolio. In practice, this means Ruffer portfolios always hold investments in what we call growth and protection. We hold these alongside each other, changing the allocation to each over time.
The growth assets are typically equities. The protective assets are usually a combination of conventional and index–linked bonds, currencies, derivatives and exposure to commodities.
When the market sun shines, we expect our growth assets to prosper. When a market storm hits, our protective assets should provide shelter, defending the portfolio from a downturn.