All Weather Portfolio (Ray Dalio)
Created by Ray Dalio (Bridgewater Associates)
Balances risk, not just dollars, across growth, inflation, and rate environments.
What is it?
The All Weather Portfolio is a public, simplified version of the asset allocation philosophy behind Bridgewater Associates' institutional risk-parity funds, popularized by founder Ray Dalio. It holds 30% stocks, 40% long-term bonds, 15% intermediate bonds, 7.5% gold, and 7.5% commodities — a much larger bond allocation than a typical retail portfolio.
The philosophy
Dalio's insight was that asset returns are driven by surprises in two variables: economic growth and inflation, each of which can come in above or below expectations. A well-diversified portfolio should hold assets that perform well in each of the four resulting combinations, and — critically — it should be built by balancing the amount of risk each asset class contributes, not simply the dollar amount invested. Because bonds are historically much less volatile than stocks, a genuinely risk-balanced portfolio ends up holding far more dollars in bonds than in equities, which is why the public All Weather version is bond-heavy relative to a standard 60/40.
How it works
The 30% stock sleeve targets growth during periods of rising economic activity. The large 40%+15% bond allocation, split across long and intermediate Treasuries, is sized to contribute a similar amount of risk to the portfolio as the smaller equity sleeve, and it benefits when growth or inflation disappoints. Gold (7.5%) protects against high or rising inflation and currency devaluation, while commodities (7.5%) tend to do best during unexpected inflationary growth. Together, the five pieces are meant to smooth returns across the full growth/inflation matrix rather than concentrating risk in equities.
Who is it for?
This strategy suits investors who want genuine diversification beyond a stock/bond split and are comfortable holding a large allocation to bonds even when equities are rallying. It is well suited to more risk-averse, long-horizon investors who prioritize consistency and smaller drawdowns over squeezing out the highest possible average return, and who are willing to hold gold and commodities as permanent, not tactical, positions.
Key strengths & trade-offs
Its strength is smoother, more consistent returns and historically shallower drawdowns than equity-heavy portfolios, because no single macro surprise can hurt the whole portfolio equally. Its trade-off is a heavy dependency on long-term bonds, whose multi-decade bull market from the early 1980s to 2020 flattered risk-parity-style portfolios; in a sustained rising-rate environment, as seen in 2022, the large bond sleeve can drag on returns at the same time equities fall, since bond convexity works less favorably from a low-yield starting point.
Risk Level
Rebalancing
annual
Number of Assets
5
Best For
Capital preservation, low tolerance for drawdowns
Current Allocation
| US Large Cap | 30% |
| US Long-Term Bonds | 40% |
| US Intermediate Bonds | 15% |
| Gold | 7.5% |
| Commodities | 7.5% |
Performance: 20.3-Year Backtest
Data for Commodities starts 2006. Simulation covers 20.3 years.
$10,000 initial investment → $38,237
Annual Returns
| Strategy | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| All Weather Portfolio (Ray Dalio) | +6.8% | +12.8% | -6.4% | +7.1% | +12.9% | +21.4% | +4.2% | +1.1% | +16.6% | -5.6% | +6.2% | +11.2% | -0.1% | +18.3% | +12.8% | +9.0% | -11.5% | +3.4% | +8.8% | +13.9% | +2.4% |
Key Metrics
ETFs in This Strategy
Based on historical data. Past performance does not guarantee future results. This site is for educational purposes only and does not constitute investment advice.