Ray Dalio All Weather Portfolio

Summary

The Ray Dalio All Weather Portfolio is an investment strategy designed to perform well in all market conditions, including both inflationary and deflationary environments. It consists of a mix of assets that includes stocks, bonds, gold, and commodities, with a focus on diversification and risk mitigation. This portfolio seeks to provide steady, consistent returns over the long term, regardless of market fluctuations.

Bridgewater Associates' All Weather Portfolio was born out of Ray Dalio's realization that economic events, while seemingly unique, often follow recurring patterns. Inspired by Nixon's 1971 decision to abandon the gold standard and the unexpected market reaction, Dalio developed a framework to analyze economic cause-and-effect relationships beyond personal experience. This led to the concept of the "economic machine", where asset classes respond predictably to different economic conditions. In collaboration with Bob Prince and others, Dalio created the All Weather strategy in 1996, designed to perform well across all market environments without requiring predictions. By balancing assets based on structural economic responses, the strategy minimizes surprises and delivers stable returns, laying the foundation for the risk parity movement and transforming institutional investing.

More Information:

• Bridgewater's All Weather Portfolio Story (Affiliate Link)

Asset Allocation

Total Return by Period