The All Weather Portfolio coined by the hedge fund master is supposed to be resilient in all market conditions.
I wanted to take a look at how the All Weather Portfolio is doing in this weird economic climate we fell into in the end of 2021, and has started 2022 of rocky.
TLDR;
too long didn't read (or watch)....
- The All Weather Portfolio is comprised of 5 asset classes; long term treasuries (40%), US equities (30%), intermediate treasuries (15), gold (7.5%), commodities (7.55).
- Ray Dalio sees this allocation has best suited to perform in 4 economic seasons.
- You could use the ETFs, TLT, VTI, VGIT, DBC & GLD to easily build the portfolio at a low cost.
- Backtested to 2007 the All Weather Portfolio returns 7.09% annually with a max drawdown through the great financial of 14.75%
- Since 2007 it slightly outperforms a global 60/40 portfolio with less than half the drawdown.
- Jan 2021 - Jan 2022 (13 full months), the 60/40 global portfolio has outperformed the all weather portfolio.
- I personally like the concept of the All Weather Portfolio.