Ray Dalio All Weather Portfolio Review and ETFs To Use

The All Weather Portfolio is a well-diversified, low-risk portfolio from Ray Dalio designed to “weather” any environment. Here we’ll look at the All Weather Portfolio’s components, historical performance, ETFs to use.

// TIMESTAMPS:

00:00 - Intro
00:16 - What Is the All Weather Portfolio?
03:59 - Performance and Commentary
05:35 - How To Build with ETFs
05:53 - Outro

// SUMMARY:

The All Weather Portfolio is an available-to-the-masses portfolio modeled somewhat after the risk-parity-based All Weather Fund from the famous hedge fund Bridgewater Associates. The portfolio idea was created by the legendary Ray Dalio, founder of Bridgewater, and was then popularized by Tony Robbins. Dalio has become almost like a god in the world of finance and investing, and rightfully so. I would highly recommend his bestselling book Principles, as well as his more recent book Big Debt Crises. His newest book from November, 2021 is Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.

Bridgewater is perhaps most famous for their focus on and analysis of different economic cycles in “the economic machine.” Their All Weather Fund – and subsequently the All Weather Portfolio – is designed to survive all economic environments, using different types of assets that perform differently during those different “seasons.” Appropriately, it is also sometimes referred to as the “All Seasons Portfolio.”

While Bridgewater is constantly watching the market and the economy, Dalio himself admits that he can’t predict the future, thus the need for a portfolio that mitigates the financial impact of unexpected economic events, known as black swan events. The All Weather Portfolio becomes especially attractive during periods of market turmoil.

As the name suggests, the All Weather Portfolio is designed to be able to “weather” any storm. The holdings and the allocations thereof correspond to Dalio’s view on economic “seasons.” Dalio’s strategy and expertise are so pervasive that the phrase “all weather” is now used to describe other portfolios that behave like his in surviving any economic climate, such as with the phrase “investing in an all weather portfolio.”

The All Weather Portfolio asset allocation looks like this:
30% U.S. Stocks
40% Long-Term Treasury Bonds
15% Intermediate-Term Treasury Bonds
7.5% Commodities
7.5% Gold

Now let's talk about how to build the All Weather Portfolio with low-cost ETFs. That looks like this:
30% VTI
40% VGLT
15% SCHR
7.5% GLDM
7.5% BCI

#raydalio #bridgewater #lazyportfolio

// INVEST

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[RicardoHernandez-zrpw]

Great concept. Less risk, less rewards.

[keanuleachay]

Great video, solid breakdown and concise. Nice work

[gloriawitek]

Great video. So organized and easy to understand.

[aryehpaulwalter]

May I ask how you calculated the sharpe ratio? I performed a similar analysis where I have a 60/40, AWP (15% gold, 30% SP500, 15% intermediate bonds, 40% long term bonds) and each of their monthly returns. I calculate the sharpe ratio for each with a 1.5% risk free ((average monthly return of portfolio) - (1.5%/12))*12 / standard deviation(monthly return of portfolio) * square root(12).

I’m getting far different sharpe ratios than you

[clarkegm]

Congrats on the new designation, John!

[Diego-castrillon]

Its a great place to start while you learn to value companies and take on more risk. Awesome vid

[jasonhobbs]

Yes, congrats on APMA! So are you changing your tune on gold and/or commodities?

[DunaMarcela]

What do you think about the etf VDC? I’ve seen it hasn’t dropped as much during recessions but idk if the fact that is only one sector (consumer staples) is risky😞 I am looking for a non volatile etf, is VDC better than SCHD??

[christophecaron]

Thanks a lot! After reading Tony Robbins' book, I tried to replicate Dalio's portfolio and thought I had failed when looking at the overall return. Now I realize I was pretty close looking at the one you're presenting here. Thanks for your video and the refresher on Dalio's All Weather approach!

[oliverh.]

Thanks for the video but as the All Weather portfolio is outdated I would like to know which or which 3 portfolios would be the best (performance) at the moment over 30-40 years seen.

[zDanyTV]

Nice video! I'd like to implement an all weather portfolio with ECR3 / IUSN / VUAA / EUNA and LYTR. Do you think it can be a nice implementation with a bit of European bonds and avoiding just gold as the single commodity? Or do you think that I might have too many modifications with respect to the standard all weather portfolio? Do you have any suggestion? 😊

[marktkimball]

I've liked the idea of levering up the All Weather Portfolio for someone still in accumulation. It seems like a risk parity style portfolio (like the AWP) is primed for leverage for accumulation phase investors.

Is it worthwhile for an accumulator to invest in a leveraged AWP or should they just stick to 100% equities?

[smalltalk.productions]

thanks for the effort and sharing. i am an appreciative subscriber. i am also someone six weeks away from semi-retirement. i have spent the past few months moving my asset allocation from a growth mindset to a capital preservation outlook. be it the AWP or the Golden Butterfly or the Rick Ferri Permanent portfolio, I can truly understand the need for capital preservation with just a percentage of equity for longterm growth. thumbs up.

[Artbullmeister]

Is it really a fixed distribution? I rather think the distribution should vary according to the changing volatility

[tomsettles]

High taxation is the downside to the All Weather. I would increase stocks to 50% and drop the bonds to 35% (25% long term, 10% intermediate). this cuts taxes down 40%.

[JosephDickson]

5:11 you could make up all these portfolio type names and I wouldn’t even catch it. 😆

[NativeNewYawka]

Hello I thought the book “All Weather Retirement Portfolio” was written and created by Randy Thurman CFP/CPA?

[alexarce]

I just opened up a Roth IRA and deposited $6, 500. I’m confused where to invest my money. What’s your opinion on using Fidelity Go?

[danielwbader]

It got hammered in 2022, and still hasn't recovered. Overall, I like the idea, but dislike the weighting.

[jimdery]

Could have covered the content in five minutes. Verbose gargage vid.