Bought the "All weather" portfolio on August 7, 2019. 5 ETFS:, VTI, GSC, GLD, IEI and TLT. As of today I'm up 16.96%. Nothing to sneeze at especially when it held up incredibly well during the "pandemic" sell off.
The face you made when you said “stocks tend to be a SEXIER investment” 😂😂 love your content btw man! I’ve made about 10% since first opening an account in June, and I’ve used this allocation plan with help from many of your videos. 👏🏼 keep going sir, the value of your content is massive
@Learn to Invest | Jimmy, I just listened to a podcast (released today, Dec 19) on the show "We Study Billionaires." They interviewed a couple guys who had direct connections to Dalio, but broke off to start their own business. They created an ETF that aims to hold this "all weather portfolio" / risk parity portfolio. The ticker is RPAR. It's a way to use this strategy with just one ETF, without going through a hedge fund.
I've used the All Weather Portfolio as a primary part of my investment strategy since 2017. I'm very happy with it and recommend it to others. I think you'll improve your CAGR (compound annual growth rate) if you use the following ETFs. Equities, VTI or VOO I use VOO, Long term bonds, TLT, Short term bonds IEF, Gold (I'm agnostic) GLD or BAR and Commodities DBC. This mix of ETFs has returned greater than 9% since 2017. My expectations are to average 9% over the long term. I'm strictly buy-hold-rebalance. Side note in 2020 the max-drawdown this portfolio had was 3.86% which occurred on October 31, 2020.
All weather Portfolio But Better! TLT - 40% (Bond) MTUM -15% (Stocks) SOXX - 15% (Stocks) SPTL -15% (Bond) DBC -7.5% (Commodities) BAR -7.5% ( Commodities) I did A lot of research Hope this Portfolio helps you!
Great video Jimmy. Since you asked: The only thing I may construct differently is I would split the 40% of TLT into: 15% TLT, 15% BSV, 10% BLV in order to give less weight to far-end of the bond lifespan. The reason is that the short-end of the yield curve should perform better in a disinflationary environment, which is what I believe these 40% TLT are primarily designed to cover. I'll appreciate your reply and thought of this, makes sense? not? THANK YOU. Great video again (as always).
Me personally I would use a small cap value etf (vbr). This will slightly increase the standard deviation. However it increases the expected return of the stock section of the portfolio by about 3% Just a little tip👍
I really like this portfolio. I've used it for years for 6 months of emergency money. Thanks for the tip on BAR, I hadn't heard of that. Instead of GLD, I've been using IAU. Instead of GSG, I've been using DBC. Instead of IEI, I've been using TLH (which is a little more volatile but performs better in the long run). And personally, I prefer VOO over VTI, but sometimes VTI does do better so it's almost 6 one way, half a dozen another. I've also made a slightly modified version for myself that I call the Fryer Pie. 35% VOO, 40% TLT, 10% TLH, and 15% IAU.
I like AAAU for a gold etf! Lower expense ration (0.18 I believe) AND you can exchange your shares for physical bullion stored by the Perth mint. Additionally, you don’t need millions to get the bullion, you can claim as little as a few grams worth
I like this approach because if this portfolio is too conservative, you can always modify it to suit your risk tolerance and still limit some downside risk. Having treasuries on hand during the big dip this year was great. I sold some of them off and bought more equities. As equity prices increase, you can add more to the bonds. I admittedly don’t understand commodities. I keep some holdings in utilities and REITs for a dividend stream and to have a lower correlation to growth stocks.
I've used the All Weather Portfolio as a portion of my portfolio for about a year. For holdings I've used VGLT, VTI, BIV, GLD and DBC. The ideal time to have been invested in it would have been pre-March. I had a portion of my investments in it then. I think the return over the past year is about 13 percent. Over the long term, I think the return is about 7 percent per year. Its value is in keeping a person invested in the market through downturns as it tends to decline much less than a 100 percent equity portfolio.
The all weather portfolio underperform the SP500 in the last 10 years. And the bridgewater still losing 18% this year while the SP500 has already rebounded. Can't see how stable it is.
Notice that bridgewater serves clients like pension funds, who will stress a lot on low volatility since they have to cash out money every year for the retired. Not all investors purely aim long term profit maximisation. You have to match your clients’ financial needs.
Rebound because of Market irrationality or economy is doing well as good as what the stock market reflects. Those vaccine company keep announcing their 90-95% effectiveness vaccine causing the market to rally. The fact is those claims has no peer-reviewed. One of the CEO sold many of his own holdings of the vaccine stock. Wait until peer reviewed was done, reflect the actual effectiveness of the vaccines. Let see who will get the last laugh
Great video! Learned about standard deviation in stats but could you go in to how to find that for a particular asset? And if you could also explained how you would do this ( what ETF's you would use or individual stocks and bonds). Thanks for the great content
All depends on a Risk factor you are willing to take. Younger folks - go crazy: VOO, bitcoin, Xpeng, etc. Others and those who cant handle Risk - stick with All-Weather Portfolio or Butterfly portfolio. Low Risk low return. Very simple.
Lately Ray dalio has said bonds are not good. Like the yields are so low it doesn’t make sense to hold them anymore. So what is he buying instead of bonds? Or does he just mean corporate bonds??
Hey Jimmy, thanks for the video. Can you do (or maybe you have already done) a video how to invest in bonds? Or just understand them? I am completely lost about these yields, when they are expensive, when they are cheap etc. I can value a stock, make complex analysis and I do understand stocks, but simple things like questions if I can sell bonds 2 months after I bought them, if these are 10 year bonds - I am complete noob!! (how, when, buy them directly, where? or via etfs?) I do not expect bonds could offer any meaningful capital gains in current zirp environment, but I need to have more knowledge on this.
To start with, not many people buy individual bonds. Most people are buying bond ETFs and mutual funds, which trade like stocks. Bonds are typically a lot easier to value than companies. But I agree with you, I would definitely like to see a video about bonds from Jimmy.
I use the same percentages, but use VTI, VGLT, VTI, VPU and IAU for an AWP. However, like many, I replaced commodities with utilities. I prefer the lower expense and higher yield. However, I may change my Gold, since it is a lower expense.
Hi Jimmy - I would point out that as an international viewer your portfolio in stocks and bonds is entirely U.S. based and that represents 85% of the portfolio.
Ray Dalio's portfolio is aligned with his company's task i.e. regular profit every year . For us , Even if the stocks go down 50% next year we don't care , We will buy more . Long term approach with 75% stocks and 25% cash equivalents for upcoming opportunities is best .
Damien Bisserier, a former Bridgewater Senior Investment Associate under Dalio, has started his own "hedge fund in an ETF" that implements this portfolio strategy in one ETF. Check out RPAR for a risk parity implementation that is actively and professionally managed along the lines explained in this excellent video. The expense ratio is .50, which to me is very reasonable for this level of management. Disclosure: I don't own any but have been tracking both the multi-ETF approximation and RPAR for several months on paper portfolios, and RPAR is winning. I plan to buy on the next dip.
I apologize that my earlier post looks so much like spam. I'm just responding to the call in the video to put in the comments if we are aware of other ETFs that do this. I am aware because I've been researching the All Weather approach for a while now.
Thanks, great info, TLT is down just over 10% in the last six months. I use a total bond fund along with a short term bond and a TIP fund to reduce bond risk. I also keep bonds to closer to 40% rather than 55% of my portfolio. I can handle more risk, but if your are more risk averse 55% may be okay.
Hey Jimmy, would you be so kind and make an quick analyse about Ali Baba since it dropped about 20% and new earnings estimate a higher growth and free cashflow.. ´Best regards !
I have money now, investing with this guy mr Michael is the beat thing that has happened to me, I make huge money from his trading.. If you wanna make more money join me
Personally, I prefer the CEF ETF (Gold and Silver) for my commodities section of my portfolio. I like this section to be around to be 10-15% of my portfolio. I understand that Gold and Silver are considered commodities aka Metals. However, I use it for insurance (Inflation protection).
Dalio's all weather portfolio is for people who can't stand to see their holdings down on paper. It's for people with weak stomachs, but does about what the S&P does over the long term. You're going to do better with the S&P, than the all weather, after tax though, having less holdings VS many holdings, some with high fees such as commodities funds.
You're saying a man that has a net worth of over 20 billion has a weak stomach.. If you have the choice of an average inconsistent 10% return, or a 5 times more consistent 10% return, why not choose for the latter?
@@dinardinar2657 he didnt get to $20B or even close to that with the all weather portfolio. His business, Bridgewater took him there. You're getting about the same return, but AT THE END, WHEN YOU'RE SELLING, you'll pay significantly more in taxes, and you'll pay more in taxes along the way, with the different funds attempting to mimic his strategy. Your real return is not going to match the S&P after taxes. That's the price you pay for that "smooth ride up" And in fact, I didn't say Dalio had a weak stomach, I said the portfolio is for those with weak stomachs. You'd do better in life to not put words in people's mouths, and/or misinterpret them so badly.
The SP500 has an average annual return of 7% when adjusted for inflation with CPI. So believe it or not, you’re not really doing better, unless the fed keeps rates low for a while which I don’t think will be the case.
@@meanreversion6849 the CPI is bullshit, so already your numbers are wrong, which pokes a giant hole in your theory. When the government looks at the CPI data, if it's getting too high, they can swap out a product with another like kind product that hasn't risen as much. Think swapping steak for hamburger and labeling it "beef," under whichever has risen less. I trust real returns calculated after the fact, over theoretical inflation adjusted returns.
I hate to be the party pooper here, but this portfolio has run its course with the 0% interest policy. The secret of Ray approach lies in the inverse correlation between Bonds and interest rates. In times of economic crisis stocks go down. The Fed responds by lowering interest rates and the bonds go up compensating for the drops in stock. Great! But now that the Fed have taken the interest to zero for "the foreseeable futures" (their words), there is little room for Bonds to go up, effectively eliminating the hedge for stocks. Add to it that with interest at zero, Bonds do not pay anything in terms of dividends and it's clear than holding Bonds do not have any purpose. Better to invest in dividends paying stocks or just plain cash waiting for the next crash.
Look to dalios current portfólio, there is no bonds. But good vídeo in a theoretical perspective. Dalio sold bonds, is selling ETF of American stocks and investing in emerging stocks
With the gold allocation, personally I wouldn’t have more than a 4.5% portfolio exposure to gold. Especially right now, considering the run up gold has had and the more positive outlook the market currently is having.
I think the matrix that ray dalio uses is kinda weird because it isnt really a matrix, he just shows what performs well when growth is higher/lower than expected and next to it the same for inflation. I think the matrix should have 4 quadrants that are: Higher than expected Growth AND higher than expected inflation Higher than expected growth AND lower than expected inflation Lower than expected growth AND higher than expected inflation Lower than expected growth AND lower than expected inflation Anyway using this framework I created a portfolio which looks like this: 50% Stocks, 25% Bonds, 12,5% TIPS, 12,5% Gold It isn't risk weighted but rather equal weighted for the 4 quadrants, also I kicked broad commodities because it's an unproductive asset that generally falls in value over the long term, though it should perform pretty well in the high inflation/ high growth quadrant, so one could exchange some of the stock holdings for commodities.
I believe the reason why most people don’t beat the S&P 500 they over diversified which cancel Out their gain and end up with a loss or just break even.
I thought Ray dalio has said bot to buy bonds now. He says cash is trash and bonds are no longer good due to the low interest rates. Now he says more gold and more emerging markets
Hi Jimmy. Thx, very insightfull explanation. I am sure the guys at Bridgewater have a clearer idea about these topics than me. But to me it seems they might flatten the effects of market cycles (since Ray Dalio talks a lot about them). But considering the idea some value investors have, that volatility is not the driver for risk, i wonder how this aproach compares with e.g. Berkshire or Markel.
One of the biggest mistakes people make is lumping "gold" in with commodities. Commodities are currently through the roof, and gold is headed the other direction. Gold is a currency and should be traded as such, in my opinion.
Do an ev Stocks update, nio, Xpev, li auto, tesla etc. Which one would you invest in and which one you see making it in the long run. Thanks and at what prices would you jump in.
Hi, great explanation.. but I am confused why he puts so much in bonds, when he said lately that "one would be crazy to hold bonds rght now" and also his comment on "cash " being "trash" contraddict this portfolio too, as bonds is just a promise for cash in the future, unless they are inflation adjusted, they are basically a promise of future cash that will be eaten away from inflation in 10,20,30 years... am I missing something here?
Why not buy 20% VTI and 10% TSLA to realize Lynch-type returns with Dalio safety? Or, you could stay out of the rain and buy 10% VTI, be a contrarian and buy 10% ARKK, and live a little with a 10% TSLA stake? Throw some ARKG in there - just to be disruptive...
I dont like bonds at all. Who cares about crashes? You can rebuy so their good :P I'm 60/20/10 in MSCI World, MSCI EM IMI, other stuff and It worked great :)
