A Breakdown of Ray Dalio's 'Holy Grail' Strategy

In this video we take a deep look into Ray Dalio's Holy Grail Strategy. This strategy helps maintain maximum returns at as minimal risk as possible.

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DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.

[NathanHQ]

Interesting how 2 billionaires RAY DALIO & WARREN BUFFETT say two different things. Warren claims *_"Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing"_* . Buffett says you only need 3 good companies!....and then we have Dalio who loves diversification....how can 2 billionaires be right? Which camp do you fall in to? Food for thought :)

[liangzhao]

There are so many dimensions to diversify: asset classes (e.g. stock, real estate, commodities), positions within an asset class (e.g. tech stock, 2 houses, copper and soy), location (e.g. EU, Korea) and time (cost average effect, ETF savings plan).

The real difficulty is to balance these right (All Weather / risk parity portfolio) and to use leverage to increase risk back to acceptable levels and improve returns (difficult for private investors).

Question: How do you measure risk, with what metric?

[nesamismartinvesting]

I think the degree of diversification needs to be correlated with the quantity and quality of research you've done as well. If you've done extremely deep research for, say, 6 companies, I believe it's fine to have just 6 stocks/cryptos in your portfolio. If not, you might need some more. Personally I had like 30 stocks and am now trying to cut it down to <15 or so. Anyways, thanks for the video Tristan!

[juangomez]

If somebody is interested to learn more about how this graph in created is was firstly studied in this paper. “Risk Reduction and Portfolio Size: An Analytical Solution”.1977 by Elton and Gruber. Here you could find the equations and logic used.

[TomasWatchReviews]

should be more linear, because the more diverse your portfolio is - not only risk gets lover but possible return as well.

[lamontdavis]

i think he meant uncorrelated asset classes, most stocks are highly correlated, uncorrelated would be bonds, commodities, precious metals, sometimes crude oil, natural gas ect... not 15-20 stocks

[LazyWay-mw]

I've thought about it for years. I've come to the conclusion that if your investment comes in the form of a ticker symbol it's not safe from sudden massive loss of value. PERIOD. People get scared and it's simply click> SOLD. click>SOLD. Doesn't matter what stock, reit or commodity it is. If you can buy and sell it via a TICKER SYMBOL it's going DOWN.

[rawcircoking]

Now to sum this up. Its actually better to also use options. Options alone will help you reduce risk if structure correctly. Also you have to make sure your quality of trades is of high standards and you also need to be in the right market cap. Theirs more opportunities in lower cap stocks compared to mega.

[rawcircoking]

So some understand this video is demonstrating how you would measure the volatility in your portfolio. SIDE NOTE where risk is it would actually be "volatility" . Covariance, correlation and weightings. This is actually taught in ITPM. If your curious on who they are just look up their YouTube channel.

[SageFinance]

I just keep constantly investing any extra money I have 🙂

[juangomez]

Thanks! Does anyone know where to find a video or tutorial about how to recreate this “holy grail graph” in a spreadsheet?

[odhiteshgaming]

Please next video on, how to find what type of market we are in increasing inflation, decreasing inflation, increasing growth and decreasing growth.

[kyle]

This portfolio is better for people who already have tons of money. If you are younger with way less money then go for high growth and more risk like tech and innovation

[hamdanaziz]

Gold content. Thanks mate for putting this out

[TheIcelandicInvestor]

Ray Dalio is a genius, my third favorite investor😎

[alessioquaglino]

if only standard deviation made any sense as a measure of risk (it makes more and more sense as the investment horizon becomes shorter)

[brianrodriguez]

Buy stocks and buy more cryptos too, have invested into both and I found out that crypto investment is far better than stocks

[bobjohnson]

@cooper Academy - who created the inflation/growth quadrant chart?

[jimmyminor]

I have zero experience... Gonna bet it all on red... Wish me luck!!!

[williealbert]

There is a risk in everything, so be prepared for the ups and downs. That's why I invest in Bitcoin that way I don't care about all these set back.