Here's my take on modern portfolio construction. This is very non-traditional, despite my background as a PM at an endowment, CFA, MBA etc. In this world of ongoing fiat depreciation and negative real yields, fiat and sovereign debt can't be the "safe" portion of a portfolio.

2/ that requires some blend of the traditional "cash" assets along with a small % of assets that are more likely to retain value (but that include higher volatility) including gold, and possibly diversified real estate and cash flow generating businesses.

3/ Personally a year ago I thought of a 50/50 split of T-bills/gold as my "cash." In currency depreciation picks up, the gold wins, if it falls, the cash wins, roughly scenario balanced. I'll likely added diversified real estate with cash flows to this soon.

4/ then you've got your risk assets. Historically, "barbell" strategies beat balanced strategies. A barbell strategy is one that combines very low risk with very high risk assets rather than having a lot of middle risk assets. There are a lot of reasons for this, one is that

5/ investors have a psychological bias to overvalue predictable cash flows, but they also underestimate the risks. For example, a basket of investment grade corporate bonds looks totally safe most of the time, but when it really matters, it looks closer to equity.

6/ so basically you're giving up higher return for stability when stability is unimportant. Those "middle ground" assets don't give you stability when it counts, during crises. So you want some "safe" assets and some very high expected value assets.

7/ Ultimately identifying good investments is bottom up, and no general heuristics always hold true. For example, there have been times when investment grade corporate bonds were relatively cheap and attractive compared to equity (but this has been rare.)

8/ what we're seeing right now in cryptocurrency, is BTC transitioning from being obviously part of the "risk" bucket" to at least a little bit in the "safe" bucket. Many institutional investors are now allocating to BTC not just hoping for a great return in real terms, but

9/ also to retain purchasing power (as part of a broader "safe" basket including fiat and gold.) And my own treatment of BTC has evolved the same. Now my "cash" is 45% fiat, 40% gold, 15% BTC. And the rest of my BTC is still in the "risk" bucket.