Ray Dalio All Weather Portfolio
The All-Weather portfolio is an investment strategy developed by Ray Dalio, the founder of Bridgewater Associates, a prominent hedge fund. It is designed to be a globally diversified portfolio that can perform well in various market conditions, hence the name "All Weather." The portfolio is intended to be relatively simple and easy to implement, with a mix of stocks, bonds, commodities, and currencies.
The core of the All Weather portfolio is a combination of 30% stocks, 40% long-term bonds, 15% intermediate-term bonds, and 15% commodities. The specific investments within each category can vary, but the overall allocation is meant to be relatively stable over time, which could be achieved through regular rebalancing.
One of the fundamental principles behind the All Weather portfolio is the idea of "risk parity," which seeks to balance risk across different asset classes rather than maximizing returns from any particular asset. The goal is to create a portfolio that can weather market volatility and produce consistent returns over the long term.
Asset Allocation
| Position | Category/Sector | Weight |
|---|---|---|
TLT iShares 20+ Year Treasury Bond ETF | Government Bonds | 40% |
IEF iShares 7-10 Year Treasury Bond ETF | Government Bonds | 15% |
DBC Invesco DB Commodity Index Tracking Fund | Commodities | 7.5% |
GLD SPDR Gold Trust | Precious Metals, Gold | 7.5% |
VTI Vanguard Total Stock Market ETF | Large Cap Growth Equities | 30% |
Performance
The chart shows the growth of $10,000 invested in Ray Dalio All Weather Portfolio in Oct 2022 and compares it to the S&P 500 index or another benchmark. It would be worth nearly $29,282 for a total return of roughly 192.82%. All prices are adjusted for splits and dividends. The portfolio is rebalanced Quarterly
Returns
As of Apr 1, 2023, the Ray Dalio All Weather Portfolio returned 6.02% Year-To-Date and 4.90% of annualized return in the last 10 years.
| 1 month | Year-To-Date | 6 months | 1 year | 5 years (annualized) | 10 years (annualized) | |
|---|---|---|---|---|---|---|
| Benchmark | 3.51% | 7.03% | 12.88% | -10.71% | 9.25% | 10.16% |
| Ray Dalio All Weather Portfolio | 3.90% | 6.02% | 7.42% | -11.28% | 5.09% | 4.90% |
| Portfolio components: | ||||||
VTI Vanguard Total Stock Market ETF | 2.71% | 7.18% | 13.17% | -10.19% | 10.36% | 11.75% |
DBC Invesco DB Commodity Index Tracking Fund | -0.08% | -3.69% | -1.35% | -10.05% | 7.68% | -1.05% |
GLD SPDR Gold Trust | 7.92% | 8.01% | 18.47% | 1.46% | 7.81% | 1.71% |
IEF iShares 7-10 Year Treasury Bond ETF | 3.72% | 3.92% | 4.05% | -5.84% | 0.81% | 0.92% |
TLT iShares 20+ Year Treasury Bond ETF | 4.84% | 7.38% | 4.00% | -17.18% | -0.64% | 1.29% |
| Returns over 1 year are annualized | ||||||
Dividends
Ray Dalio All Weather Portfolio granted a 2.14% dividend yield in the last twelve months.
| Period | TTM | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dividend yield | 2.14% | 1.88% | 1.11% | 1.23% | 1.97% | 2.25% | 1.94% | 2.13% | 2.22% | 2.25% | 2.54% | 2.45% |
Drawdowns Chart
The Drawdowns chart displays portfolio losses from any high point along the way.
Worst Drawdowns
The table below shows the maximum drawdowns of the Ray Dalio All Weather Portfolio. A maximum drawdown is an indicator of risk. It shows a reduction in portfolio value from its maximum due to a series of losing trades.
The maximum drawdown since January 2010 for the Ray Dalio All Weather Portfolio is 24.28%, recorded on Oct 20, 2022. The portfolio has not recovered from it yet.
Depth | Start | To Bottom | Bottom | To Recover | End | Total |
|---|---|---|---|---|---|---|
| -24.28% | Nov 10, 2021 | 238 | Oct 20, 2022 | — | — | — |
| -15.56% | May 21, 2008 | 123 | Nov 12, 2008 | 226 | Oct 7, 2009 | 349 |
| -13.99% | Mar 9, 2020 | 8 | Mar 18, 2020 | 29 | Apr 29, 2020 | 37 |
| -8.23% | Feb 3, 2015 | 237 | Jan 11, 2016 | 84 | May 11, 2016 | 321 |
| -7.37% | May 3, 2013 | 37 | Jun 25, 2013 | 170 | Feb 27, 2014 | 207 |
| -7.29% | Jul 11, 2016 | 102 | Dec 1, 2016 | 168 | Aug 3, 2017 | 270 |
| -5.71% | Aug 28, 2018 | 82 | Dec 24, 2018 | 33 | Feb 12, 2019 | 115 |
| -5.3% | Jan 29, 2018 | 9 | Feb 8, 2018 | 137 | Aug 24, 2018 | 146 |
| -5.16% | Sep 3, 2020 | 41 | Oct 30, 2020 | 31 | Dec 15, 2020 | 72 |
| -5.02% | Feb 11, 2021 | 25 | Mar 18, 2021 | 35 | May 7, 2021 | 60 |
Volatility Chart
Current Ray Dalio All Weather Portfolio volatility is 11.26%. The chart below shows the rolling 10-day volatility. Volatility is a statistical measure showing how big price swings are in either direction. The higher asset volatility, the riskier it is, because the price movements are less predictable.