facebookI have heard about the All-Weather investment strategy and how it helps diversify a portfolio. I want to know more about it. Can somebody help? - Seedly

Anonymous

13 Apr 2020

General Investing

I have heard about the All-Weather investment strategy and how it helps diversify a portfolio. I want to know more about it. Can somebody help?

What would be the pros and cons for this strategy? is there anything that i should watch out for when it comes to this?

Discussion (4)

Kelvin Seetoh

03 Dec 2019

Founder at Kelvestor.com

For ultra high net worth clients, they prefer something that is less volatile and steady growth. That's the pro of the strategy.

As for the con, you may scarifice a bit on the gains because you're equally hedged across certain assets classes. The gains may be lower. ​​​

Arpita Mukherjee

03 Dec 2019

Community Evangelist at Kristal.AI

Hi Anon,

The benefits of investing in the All-Weather strategy are many. Not only does it provide you returns in favourable and unfavourable market conditions due to the balanced and asset allocation, but also provides exposure to diversified asset classes. The portfolio coined by the legendary investor, Ray Dalio, is a blueprint that many have used since to allocate assets in a manner crafted to help you make money in any kind of economic environment. In the last 10 years, Dalio’s portfolio showed a 7.65% compound annual return (last update: October 2019). From the period of 1984 to 2013, Dalio’s strategies earned him a positive return 26 out of 30 years, with an average annual return of 9.7%.

The portfolio has an asset allocation of:

  • 55% Fixed income (10% inflation-linked treasuries, 30% long-duration bonds, 15% 3-7yr duration bonds)

  • 30% Equity (Broad US market ETF, e.g. S&P 500, total stock market ETF, etc)

  • 15% Commodities (Gold, and/or broad commodity tracking ETF)

I work at kristal.AI, and my mojo is to help people make the right financial decisions. If you think I helped you, do give me "Thumbs up". If you think my response was biased let me know, I will work on it.

I hope this helps you make the right decision.​​​

Hariz Arthur Maloy

02 Dec 2019

Independent Financial Advisor at Promiseland Independent

The famous Ray Dalio's All-Weather Portfolio is a conservative portfolio of 30% Equity, 55% Bonds, 7...

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