60/40 Portfolio vs All Weather Portfolio (Ray Dalio)
30-year historical backtest comparison, $10,000 initial investment each.
Bottom line: The 60/40 leans on stocks for growth; All Weather spreads risk across more asset classes for steadier drawdowns. 60/40 usually grows faster, All Weather falls less.
Cumulative Growth
Key Metrics
| Strategy | CAGR | Max Drawdown | Volatility | Sharpe | Sortino |
|---|---|---|---|---|---|
| 60/40 Portfolio | +8.77% | -30.4% | 9.6% | 0.72 | 1.14 |
| All Weather Portfolio (Ray Dalio) | +6.85% | -21.0% | 8.2% | 0.61 | 0.96 |
Annual Returns
| Strategy | '96 | '97 | '98 | '99 | '00 | '01 | '02 | '03 | '04 | '05 | '06 | '07 | '08 | '09 | '10 | '11 | '12 | '13 | '14 | '15 | '16 | '17 | '18 | '19 | '20 | '21 | '22 | '23 | '24 | '25 | '26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 60/40 Portfolio | -2 | +14 | +16 | +13 | -1 | -1 | -7 | +2 | +5 | +1 | +6 | -1 | -22 | +22 | +15 | +6 | +10 | +13 | +11 | -1 | +12 | +17 | 0 | +17 | +12 | +13 | -8 | +13 | +17 | +12 | +7 |
| All Weather Portfolio (Ray Dalio) | — | — | — | — | — | — | — | — | — | — | +7 | +13 | -6 | +7 | +13 | +21 | +4 | +1 | +17 | -6 | +6 | +11 | 0 | +18 | +13 | +9 | -11 | +3 | +9 | +14 | +4 |
60/40 Portfolio
The classic balanced benchmark that stocks-and-bonds investing is measured against.
All Weather Portfolio (Ray Dalio)
Balances risk, not just dollars, across growth, inflation, and rate environments.
Two philosophies of balance
The 60/40 Portfolio puts 60% in stocks and 40% in bonds — a simple growth-plus-ballast design. Ray Dalio's All Weather instead spreads exposure across stocks, long- and intermediate-term bonds, gold, and commodities, aiming to perform reasonably in any economic environment.
The core difference is diversification breadth. 60/40 makes a concentrated bet on stocks doing the heavy lifting; All Weather deliberately avoids depending on any single asset class.
How they behave in stress
In equity bull markets, the 60/40 typically outgrows All Weather because it holds more stocks. In inflation shocks like 2022, both struggled — but All Weather's gold and commodity sleeves cushioned it somewhat, while the 60/40's bonds and stocks fell together.
All Weather's hallmark is a shallower maximum drawdown and smoother ride, which can make it easier to hold through a crisis. The trade-off is lower long-run growth in stock-friendly decades.
Which fits you
Choose the 60/40 if you prioritize long-term growth and can tolerate deeper drawdowns. Choose All Weather if a smooth, resilient ride matters more than maximizing returns. Compare their historical CAGR, max drawdown, and Sharpe ratio in the charts below to see the trade-off in numbers.
Frequently Asked Questions
Is the All Weather Portfolio better than 60/40?
It depends on your goal. All Weather historically has shallower drawdowns and more consistent returns thanks to broader diversification, while the 60/40 usually grows faster in stock bull markets. Neither is universally better.
Does All Weather protect against inflation better than 60/40?
Generally yes. All Weather holds gold and commodities specifically to hedge inflation, which the standard 60/40 lacks. In the 2022 inflation shock those sleeves helped cushion All Weather relative to a plain stock-bond mix.
Hypothetical historical performance based on backtested data. Past performance does not guarantee future results. This site is for educational purposes only and does not constitute investment advice. Full disclaimer