The All Seasons Portfolio by Ray Dalio is a simplified version of his famous All Weather fund that can be easily implemented by everyday investors.
Home Country
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Asset Allocation
How to build an All Seasons Portfolio
| % | Asset Class |
|---|---|
| 30% | United States Large Cap Blend Stocks |
| 40% | United States Long Term Treasury Bonds |
| 15% | United States Intermediate Term Treasury Bonds |
| 8% | Global Gold |
| 7% | Global Commodities |
Asset Notes
The Portfolio Charts tools use round numbers, so I reallocated the portfolio slightly while preserving the original design intent as closely as possible.
Author
Ray Dalio
Ray Dalio is the founder and chief investment officer of the world’s largest hedge fund, Bridgewater Associates. You can read about his thoughts on the All Seasons Portfolio in the Tony Robbins book MONEY Master the Game.
Overview
The All Seasons Portfolio is built on the philosophical foundation of Dalio’s All Weather Fund, a popular hedge fund among institutional investors. According the All Weather Story, the original goal of the fund was to answer a deceptively simple question:
What kind of investment portfolio would you hold that would perform well across all environments, be it a devaluation or something completely different?
Dalio and his Bridgewater team concluded that while individual assets are unpredictable, they react in understandable ways based on cash flows in the prevailing economic environment. They arranged those environments into four quadrants:
By filling each quadrant with assets that respond to each economic condition and balancing the asset weights to achieve risk parity for each situation, Dalio designed a portfolio capable of succeeding no matter what happens in the markets.
While the institutional All Weather fund includes a lot of active management and a number of investments not available to everyday investors, the All Seasons portfolio is a simplified version that he recommends to individuals looking to build an autopilot portfolio using the same All Weather philosophy.
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Performance
Since 1970, an investor in the United States holding the All Seasons Portfolio earned an average 5.3% real return, with a baseline CAGR of 3.9% over 15 years. It supported a 4.9% safe withdrawal rate for 30 years and 4.0% indefinitely. Its worst peak-to-trough loss was 22%, and the longest a new investment spent below water was under 11 years.
All Seasons Portfolio Performance
| # | Metric | What it measures |
|---|---|---|
| 5.3% | Average return | Mean annual return after inflation |
| 3.9% | Baseline real return (15 years) | What 15-year stretches returned in the weaker outcomes |
| 4.9% | Safe withdrawal rate (30 years) | Highest spending rate that lasted 30 years in the worst case |
| 4.0% | Long-term withdrawal rate | The SWR floor over very long retirements |
| 22% | Deepest drawdown | Worst peak-to-trough loss after inflation |
| 11 years | Longest drawdown | Longest a new investment stayed below what you put in |
| 8.7% | Volatility (standard deviation) | Year-to-year variation in returns |
All home countries
| Home country | Average | Baseline | SWR | LTWR | Deepest | Longest | Volatility |
|---|---|---|---|---|---|---|---|
| Australia | 4.3% | 2.9% | 3.8% | 3.0% | 29% | 15 years | 8.8% |
| Canada | 4.9% | 3.2% | 4.9% | 3.7% | 16% | 10 years | 7.0% |
| France | 5.2% | 3.4% | 4.8% | 3.5% | 17% | 13 years | 9.9% |
| Germany | 4.9% | 4.1% | 4.8% | 3.4% | 20% | 10 years | 8.6% |
| Italy | 4.5% | 2.3% | 3.3% | 2.6% | 48% | 16 years | 12.9% |
| Japan | 4.4% | 2.5% | 4.2% | 2.9% | 26% | 9 years | 9.4% |
| Netherlands | 5.2% | 3.6% | 4.7% | 3.4% | 24% | 8 years | 9.0% |
| Spain | 3.9% | 0.2% | 2.5% | 2.0% | 61% | 24 years | 12.4% |
| Sweden | 6.2% | 4.4% | 5.1% | 4.3% | 19% | 10 years | 10.5% |
| Switzerland | 4.1% | 3.2% | 4.4% | 3.3% | 21% | 7 years | 8.3% |
| United Kingdom | 4.5% | 3.0% | 4.4% | 3.0% | 32% | 12 years | 9.7% |
| United States | 5.3% | 3.9% | 4.9% | 4.0% | 22% | 11 years | 8.7% |
Charts
Different ways to visualize the All Seasons Portfolio
Comparisons
How the All Seasons Portfolio compares to other options
Alternatives
Portfolios with a similar structure or design intent
Permanent Portfolio — A similar investing philosophy built around economic risk parity
Larry Portfolio — Similar portfolio structure to balance volatility risk between assets
Swensen Portfolio — Another portfolio that uses institutional investing concepts
Articles
Insights that mention the All Seasons Portfolio
Discussion
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