By back-testing performance, studies show that the All Weather portfolio may be one of the best choices available to an average investor. And it comes recommended from Ray Dalio! The portfolio is a perfect balance of risk versus reward, but what exactly is the All Weather strategy?
At the heart of the All Weather strategy is Ray Dalio, which was created by the Bridgewater founder in 1996. The bright billionaire Dalio once asked, “Gee, I wonder what kind of investment portfolio you could hold that would perform well across all environments”; he was looking for a strategy that could take advantage of market booms, but that offers more protection against market downfalls. Something that takes advantage of the sunny days, but protects against the rain.
Thus was born the All Weather strategy as solution!
The key feature of the All Weather Strategy is a balanced portfolio that properly distributes risk across different asset classes. For example, although some may think a 60/40 split between equities/bonds is a fairly conservative option, a portfolio like this may be more volatile than it looks, since stocks are generally 3 times more risky than bonds.
To combat risk, Ray Dalio suggests investing in a portfolio like the Bridgewater All Weather strategy.
Don’t know where to start? We have the essentials right here!
In an interview with author Tony Robbins, Ray Dalio laid out steps that an unsophisticated investor can replicate to achieve a portfolio mix similar to Bridgewater’s All Weather strategy.
And here it is! For returns with comparatively less risk, Dalio suggests the following:
- 30% Equities,
- 40% Long-Term Treasuries,
- 15% Intermediate-Term Treasuries,
- 5% Gold
- 5% Diversified Commodities.
For the average investor, Dalio thinks that the above portfolio is a great way to invest your savings. And lucky for you, you can invest in this mix as part of the iBillionaire investing platform in one easy strategy.
Let’s look at the components of the iBillionaire All Weather strategy to see how it matches Ray Dalio’s advice:
Holdings of the iBillionaire All Weather Strategy as of April 20:
Equities, long-term and intermediate-term treasuries, gold and diversified commodities. It’s a match!
If you’re concerned about downside risk and looking for something more conservative, but without sacrificing all the returns, Dalio’s All Weather could be a great option for your portfolio.
See what all the buzz has been about in the news and invest in the iBillionaire All Weather strategy from as little as $25 today!