Asset Allocation Strategies

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Ray Dalio - 'All Weather Portfolio' -


Dalio was obsessed with managing risk. He's the opposite of a gunslinger, and with his hedge fund he used arbitrage to get the overall risk as close to zero as possible. Each positions has risk, but the risks are uncorrelated with the other positions.

Dalio said that for most investors, the key is getting the asset allocation right. Here is what he came up with years ago for Tony Robbins (below), although today I assume it would be different, and avoid the longer term bonds. Steve Forbes was shocked by the low stock allocation (30%), but this is what historically had produced the best returns over time. Of course a looming dollar crisis would change the strategy, but it at least gives some insight into Dalio's thinking -


Ray Dalio - 'All Weather Portfolio'
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Stocks ----------- 30%
Treasuries ------ 55% (Long term 40%, Intermediate Term 15%)
Gold -------------- 7.5%
Commodities -- 7.5%

(Note - Dalio uses some leverage)

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