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.
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.