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The Portfolio That Was Built Not to Be Surprised
20 years of Ray Dalio’s All Weather idea, tested with real costs. It was a smooth ride for most of the trip, until the one year it wasn’t.
This is not Ray Dalio’s actual All Weather portfolio. It is a simplified version I built myself, using 5 ETFs and rough weights inspired by the idea. Please don’t read the results as a verdict on his real strategy.
The question behind the portfolio
Most portfolios are built around a forecast: stocks will go up, or rates will fall, or gold will shine. The All Weather idea starts from the opposite admission, that you don’t know what comes next.
So instead of betting on one future, you hold something for each of them. Growth surprises, growth disappointments, inflation spikes, and inflation collapses each get an asset class that should do well in that world. The portfolio isn’t trying to win in any single environment. It’s trying to avoid being destroyed in any of them.
I took a rough version of that idea and ran it through a backtest:
- SPY 30%, US stocks, for growth
- TLT 40%, long-term Treasuries, for deflation scares and recessions
